Section 41 → Section 44
Profits chargeable to tax
Quick Answer
Section 41 of the Income Tax Act, 1961 (Profits chargeable to tax) corresponds to Section 44 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 41
Provision Summary
Taxes deemed profits arising from the recovery of previously allowed deductions, or cessation of trading liabilities.
Sec 44
Provision Summary
Retained. Unpaid creditors lingering in the balance sheet for more than 3 years without active dispute are flagged for deemed cessation taxation.
Key Changes & Highlights
- AI-driven balance sheet parsing detects stagnant liabilities for potential taxation under this section.
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Frequently Asked Questions
What does Section 41 of the Income Tax Act 1961 deal with?
Section 41 (Profits chargeable to tax) Taxes deemed profits arising from the recovery of previously allowed deductions, or cessation of trading liabilities.
What is the new section number for Section 41 under the Direct Tax Code 2025?
Section 41 of the ITA 1961 maps to Section 44 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 41 under the new tax code?
Section 41 is marked as "Retained" with status "Active". Impact: Medium - Prevents businesses from indefinitely keeping fake creditors.
What are the key changes to Section 41 under DTC 2025?
AI-driven balance sheet parsing detects stagnant liabilities for potential taxation under this section.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
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