Section 69B of The Income Tax Act 1961
Where in any
financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the 1[Assessing Officer] finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the 1[Assessing Officer], satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.]
Summary
Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the 1[Assessing Officer] finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article.
Practical examples
FAQ
1. What does Section 69B of the Income Tax Act 1961 say about undervalued investments?
Section 69B of the Income Tax Act 1961 says that if you record an investment in your books but the actual amount you spent is higher, and you can't explain the source of the extra money, that excess amount is treated as your income.
2. How is Section 69B of the Income Tax Act 1961 different from Section 69?
Section 69 of the Income Tax Act 1961 is for investments not recorded at all, while Section 69B is for investments that are recorded but the full amount spent is not fully disclosed.
3. If the Assessing Officer finds I spent more on gold than I wrote in my books, what rule applies?
Section 69B of the Income Tax Act 1961 applies. It allows the tax official to deem the excess amount as your income if your explanation for the source is not satisfactory.
Test yourself
Q1.Under Section 69B of The Income Tax Act 1961, what is deemed as income if an investment is not fully disclosed?
Q2.To which type of assets does Section 69B of The Income Tax Act 1961 apply?
Q3.Under Section 69B of The Income Tax Act 1961, if a person records an investment of 10,000 but actually spent 15,000 and has no explanation for the difference, what is the deemed income?