Section-278: Taxability of certain income

Section-278 : Taxability of certain income

Section-278 seeks to provide for taxability of interest, compensation or enhanced compensation and escalation claims in respect of contract or export incentives. Learn to understand the section-278 as it is, it's help and useful links to follow.

Here onwards, "Act" refers to "Income Tax Act 2025"

1. Section-278 as per act

The interest received by an assessee on any compensation or on enhanced compensation, shall be deemed to be the income of the tax year in which it is received, irrespective of anything to the contrary contained in section 276.
Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the tax year in which reasonable certainty of its realisation is achieved.
The income referred to in section 2(49)(w) shall be treated as the income of the tax year in which it is received, if not charged to income-tax in any earlier tax