The Statutory Brief

IT Act 1961 → 2025 / Section 57

Other sources

Section 57 → Section 93

Deductions from income from other sources (family pension, interest, dividends)

Section 57 of the old Income-tax Act, 1961 · new section 93 under the Income-tax Act, 2025

New reference Section 93 (58 → 94)

Income-tax Act, 1961Section 57

  • Family pension: one-third or ₹25,000 (new regime) / ₹15,000 (old regime)
  • Commission for realising dividend or interest allowed
  • Interest expense against dividend/MF income limited to 20% of that income

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 93 (58 → 94)

  • Family pension standard deduction retained: one-third, up to ₹25,000 / ₹15,000
  • From 1 April 2026: commission allowed only for interest on securities, not dividends
  • From 1 April 2026: no deduction at all against dividend or equity MF income (93(2), Finance Act 2026)

Applies from tax year 2026-27 (from 1 April 2026).

What changed

A real change: the Finance Act 2026 removed the 20% interest deduction and the collection-commission deduction against dividend and mutual fund income.

Practice notes

  • Borrowing to invest in shares no longer gives any deduction against dividends from tax year 2026-27.
  • Amounts not deductible (old 58) are in section 94.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

Is interest on borrowings deductible against dividend under the new Income Tax Act 2025?

No. From 1 April 2026, section 93(2) allows no deduction against dividend or mutual fund income (the earlier 20% limit was removed).

What is section 57 called in the new Income-tax Act, 2025?

Section 57 of the Income-tax Act, 1961 corresponds to Section 93 (58 → 94) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 57 under the new Income Tax Act?

A real change: the Finance Act 2026 removed the 20% interest deduction and the collection-commission deduction against dividend and mutual fund income.

Is section 57 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 57 of the 1961 Act. Section 93 (58 → 94) of the 2025 Act applies from tax year 2026-27.

Related sections

56→92Income from other sources, including taxable gifts (old 56(2)(x))194→393TDS on dividends paid by domestic companies112A→198Tax on long-term capital gains from listed equity shares, equity mutual funds and business trust units (STT paid)