Section 145B of Income Tax Act 1961: Taxability of Certain Income
Section 145B of the Income Tax Act, 1961 provides special rules for determining the year in which certain categories of income shall be taxable. It overrides the general provisions of section 145 for the specific incomes covered under this section.
Provision under Section 145B of Income Tax Act 1961
Section 145B - Taxability of certain income
(1) Notwithstanding anything contrary contained in section 145, the interest received by an assessee on any compensation or enhanced compensation shall be deemed to be the income of the previous year in which it is received.
(2) Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved.
(3) The income referred to in sub-clause (xviii) of clause (24) of section 2 shall be deemed to be the income of the previous year in which it is received, if it has not been charged to income tax in any earlier previous year.
Meaning and Importance of Section 145B
Section 145B determines the point of taxation for specified receipts where normal accounting principles under section 145 may not clearly determine the year of chargeability. The section ensures that specified receipts are taxed in the appropriate previous year as provided by law.