Section 36(1)(xii) of the Income Tax Act
Income-tax Act, 2025: ss.29, 30, 31, 32
Section 36(1)(xii) falls under section 36 of the Income-tax Act, 1961, which corresponds to section 29 (Deductions related to employee welfare), section 30 (Deduction on certain premium), section 31 (Deduction for bad debt and provision for bad and doubtful debt) and section 32 (Other deductions) of the Income-tax Act, 2025.
Read section 29 of the 2025 ActRead section 30 of the 2025 ActRead section 31 of the 2025 ActRead section 32 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 36(1)(xii) is 448 ITR 674 (Delhi and Pr.CIT v. Oil Industry Development Board (103 Taxmann.com 325), cited in 25 of the 42 judgments on BharatTax that turn on this section.
Leading authorities on Section 36(1)(xii)
Disallowance under section 14A of the Income-tax Act is not permissible if the assessee has not earned any exempt income in the relevant assessment year. This position is affirmed by the dismissal of a Special Leave Petition by the Supreme Court.
Amounts collected by an assessee under a statutory obligation and directed to be kept in a separate account for a specific purpose, such as a molasses storage fund, do not belong to the assessee and should be excluded from its total income.
