The Statutory Brief

IT Act 1961 → 2025 / Section 68

Unexplained income

Section 68 → Section 102

Unexplained cash credits in the books of account

Section 68 of the old Income-tax Act, 1961 · new section 102 under the Income-tax Act, 2025

New reference Section 102 (69 → 103, 69A → 104)

Income-tax Act, 1961Section 68

  • Unexplained credits in the books taxed as income of the year
  • Loans: the lender must also explain the source
  • Closely held companies: share capital/premium sources to be explained

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

Income-tax Act, 2025Section 102 (69 → 103, 69A → 104)

  • Same rule, now section 102
  • Lender-source explanation required for loans (102(2))
  • Share application money/premium in closely held companies (102(3))
  • Unexplained investments and money: sections 103 and 104

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

What changed

Renumbered. Taxed at the special rate in section 195, which the Finance Act 2026 reduced to 30%.

Practice notes

  • Venture capital funds/companies remain outside the share-capital rule.
  • See section 195 (old 115BBE) for the rate.

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

What is section 68 called in the new Income Tax Act 2025?

Section 102 of the Income-tax Act, 2025 (unexplained credits); unexplained investments and money (old 69, 69A) are sections 103 and 104.

What is section 68 called in the new Income-tax Act, 2025?

Section 68 of the Income-tax Act, 1961 corresponds to Section 102 (69 → 103, 69A → 104) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 68 under the new Income Tax Act?

Renumbered. Taxed at the special rate in section 195, which the Finance Act 2026 reduced to 30%.

Is section 68 still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 68 of the 1961 Act. Section 102 (69 → 103, 69A → 104) of the 2025 Act applies from tax year 2026-27.

Related sections

115BBE→195Tax rate on unexplained income (cash credits, investments, money, expenditure)270A→439Penalty for under-reporting and misreporting of income269SS→185No cash loans, deposits or specified sums of ₹20,000 or more