§ 278
Chapter XVI — Procedure For Assessment
Taxability of certain income
Income-tax Act, 2025
Certain types of income are taxable in the year they are received. This includes interest on compensation and claims for escalation of price in contracts.
- Such income is taxable regardless of when it was earned.
📜 Official text of the section +
278. (1) Any interest received by an assessee on any compensation or on enhanced
compensation, shall be deemed to be the income of the tax year in which it is
received, irrespective of anything to the contrary contained in section 276.
(2) Any claim for escalation of price in a contract or export incentives shall be
deemed to be the income of the tax year in which reasonable certainty of its real -
isation is achieved.
(3) The income referred to in section 2(49)(w) shall be treated as the income of the
tax year in which it is received, if not charged to income-tax in any earlier tax year.
Income escaping assessment.
Plain-language summary — not the official text. Refer to the bare Act and confirm with a professional for your specific case.