What this means
Section 37 of IT Act 1961 (residual deduction: any expenditure wholly and exclusively for business purposes, not capital in nature) maps to Section 37 of IT Act 2025. CSR expenditure is explicitly disallowed under §37(1) Explanation 2. The general residual deduction rule is unchanged. Verify on the income-tax portal before filing.
Change type — Rules substantively changed
This section has been substantively changed in the IT Act 2025. Rates, thresholds, or conditions may differ from the old provision. Verify the new section carefully before applying to Tax Year 2026-27 onwards.
Effective date
This change takes effect from 1 April 2026 (Tax Year 2026-27 onwards). For income earned before 1 April 2026, the old Section 37 continues to apply under the transitional provisions of Section 536 of the IT Act 2025. Returns for FY 2025-26 (AY 2026-27) are filed under the IT Act 1961 — old section numbers apply.
Frequently asked questions
Where did Section 37 go in the Income Tax Act 2025?▾
Section 37 of the IT Act 1961 maps to 37 in the IT Act 2025, effective 1 April 2026. Section 37 of IT Act 1961 (residual deduction: any expenditure wholly and exclusively for business purposes, not capital in nature) maps to Section 37 of IT Act 2025. CSR expenditure is explicitly disallowed under §37(1) Explanation 2. The general residual deduction rule is unchanged. Verify on the income-tax portal before filing.
Does Section 37 still apply for FY 2025-26 (AY 2026-27)?▾
Yes. For income earned in FY 2025-26 (April 2025 to March 2026), the IT Act 1961 continues to apply — including Section 37. The IT Act 2025 (and its new section numbering) applies from Tax Year 2026-27 (income earned on or after 1 April 2026). Verify on the income-tax portal before filing.
What is the new section number for 37 in the IT Act 2025?▾
The new corresponding provision is 37 under the Income Tax Act 2025. Change type: Rules substantively changed. This section has been substantively changed in the IT Act 2025. Rates, thresholds, or conditions may differ from the old provision. Verify the new section carefully before applying to Tax Year 2026-27 onwards. Verify on the income-tax portal before filing.