Section 36 → Section 38
Other deductions
Quick Answer
Section 36 of the Income Tax Act, 1961 (Other deductions) corresponds to Section 38 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 36
Under the Income Tax Act, 1961, Section 36 governs other deductions. Specific deductions like insurance premium for stock, bonus/commission to employees, interest on borrowed capital, employer's PF contribution, and bad debts.
From 1st April 2026, the same subject sits at Section 38 of the Income-tax Act, 2025 — retained and renumbered as Section 38 of the Income-tax Act, 2025. Retained. Bad debt claim rules simplified—mere write-off in the books of accounts is sufficient proof.
For Section 36, the practical impact is rated Very High. Core checklist for every tax audit.
Sec 36
Provision Summary
Specific deductions like insurance premium for stock, bonus/commission to employees, interest on borrowed capital, employer's PF contribution, and bad debts.
Sec 38
Provision Summary
Retained. Bad debt claim rules simplified—mere write-off in the books of accounts is sufficient proof.
Key Changes & Highlights
- Employee contribution to PF must strictly be deposited before the PF due date; otherwise, permanent disallowance triggers.
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Frequently Asked Questions
What is Section 36 of the Income Tax Act, 1961 about?
Section 36 of the Income Tax Act, 1961 covers other deductions. Specific deductions like insurance premium for stock, bonus/commission to employees, interest on borrowed capital, employer's PF contribution, and bad debts.
Which section replaces Section 36 in the Income-tax Act, 2025?
Section 36 of the Income Tax Act, 1961 maps to Section 38 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Bad debt claim rules simplified—mere write-off in the books of accounts is sufficient proof.
What is the impact of the change to Section 36 under the new tax code?
The transition impact for Section 36 is rated Very High. Core checklist for every tax audit.
What should I watch out for when Section 36 moves to the 2025 code?
Employee contribution to PF must strictly be deposited before the PF due date; otherwise, permanent disallowance triggers. These points are specific to Section 36 (Other deductions).
Disclaimer: This mapping of Section 36 (Other deductions) to Section 38 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 36 is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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