Income-tax Act, 1961Section 69C
- Expenditure whose source is unexplained is deemed income
- Not allowed as a deduction under any head
- Taxed at 60% under 115BBE
Applies to FY 2025-26 (AY 2026-27) and earlier years.
IT Act 1961 → 2025 / Section 69C
Unexplained incomeSection 69C → Section 105
Unexplained expenditure
Section 69C of the old Income-tax Act, 1961 · new section 105 under the Income-tax Act, 2025
New reference Section 105
Income-tax Act, 2025Section 105
- Section 105(1): same deeming
- 105(2): not deductible under any provision
- 30% tax under section 195 (cut from 60% by Finance Act 2026)
Applies from tax year 2026-27 (from 1 April 2026).
What changed
Renumbered, with a real rate change: section 195 rate cut from 60% to 30% by Finance Act 2026; the extra 10% penalty (443) is gone.
Practice notes
- Bogus purchases are often taxed under this section — keep payment trail and stock records.
Frequently asked
What is section 69C in the new Income Tax Act?
Section 105 of the Income-tax Act, 2025.
What changed in section 69C under the new Income Tax Act?
Renumbered, with a real rate change: section 195 rate cut from 60% to 30% by Finance Act 2026; the extra 10% penalty (443) is gone.
Is section 69C still applicable for FY 2025-26?
Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 69C of the 1961 Act. Section 105 of the 2025 Act applies from tax year 2026-27.