§ 106
Chapter VI — Aggregation Of Income
Amount borrowed or repaid through negotiable instrument, hundi, etc
Income-tax Act, 2025
Business owners should note that borrowing or repaying amounts through certain modes, such as negotiable instruments or hundis, may be considered as income for tax purposes. This applies to the tax year in which the amount was borrowed or repaid. Key points to consider include:
- the mode of transaction (e.g. negotiable instrument, hundi)
- the tax year of borrowing or repayment
📜 Official text of the section +
106. (1) Where any amount (including interest thereof) is borrowed or repaid
through a negotiable instrument or on a hundi, otherwise than an account
payee cheque, or through any mode as specified by the Board in this behalf, the
amount so borrowed or repaid (including interest paid on the borrowed amount)
shall be deemed to be the income of the person borrowing or repaying, as the case
may be, for the tax year in which the amount was borrowed or repaid.
(2) Where the amount borrowed under sub-section (1) has been deemed to be the
income of any person, such person shall not be liable to be assessed again in respect
of such amount under that sub-section on repayment of such amount.
Charge of tax.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.