Section 93
Section 93: deductions against income from other sources
Section 93 sets out what can be deducted while computing income chargeable under the head 'Income from other sources.' It covers commission paid to realise interest income, expenses connected to letting out machinery/plant/furniture, a standard deduction for family pension, a flat 50% deduction for compensation on termination of employment, and a general clause for any other expenditure incurred wholly and exclusively to earn that income.
This explanation is AI-assisted and pending review by our CA/CS team. It is general information, not professional advice - always cross-check against the bare law text above or talk to our tax team for guidance specific to your situation.
What can be deducted
In computing income from other sources, the following deductions are allowed: reasonable commission or remuneration paid to a banker or other person to realise interest on securities; for employee-welfare-fund contributions taxed under this head, an amount computed the same way as under Section 29(1)(e); for income from letting machinery, plant, furniture (with or without buildings), amounts computed the same way as under Section 28(1)(a), (b), (d), Section 33, subject to Section 28(2); and any other expenditure (not of a capital nature) laid out or expended wholly and exclusively for making or earning that income.
Standard deduction for family pension
| Situation | Deduction |
|---|---|
| Family pension where tax is computed under Section 202(1) | One-third of the family pension income, or ₹25,000, whichever is less |
| Family pension in any other case | One-third of the family pension income, or ₹15,000, whichever is less |
50% deduction for termination compensation
For income in the nature of compensation or other payment received in connection with termination of employment or modification of its terms (as referred to in Section 92(2)(i)), a flat deduction of 50% of that income is allowed, and no other deduction is permitted for that income under this section.
Fully exempt items: commuted pension and death gratuity
Income in the nature of commutation of pension received from a fund specified in Schedule VII (Table: Sl. No. 3) is fully deductible - the entire amount. Similarly, gratuity received on the death of an employee (as referred to in Section 19(2)(g)) is fully deductible - the entire amount.
No deduction for dividend and mutual fund income
For dividend income, or income from units of a Mutual Fund specified in Schedule VII (Table: Sl. No. 20 or 21), or income from units of a specified undertaking under the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002, no deduction is allowed at all under this section.
Frequently asked questions
What is the standard deduction for family pension under Section 93?
One-third of the family pension, capped at ₹25,000 where tax is computed under Section 202(1), or capped at ₹15,000 in any other case.
How much of termination compensation is deductible?
A flat 50% of the compensation income taxed under Section 92(2)(i), and no other deduction is allowed against that specific income.
Can I deduct expenses against dividend income under Section 93?
No - Section 93(2) specifically disallows any deduction against dividend income and income from certain specified mutual fund/UTI units.
Is commuted pension from any fund fully deductible?
Only commuted pension received from a fund specified in Schedule VII (Table: Sl. No. 3) is fully deductible under Section 93.
Related sections
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Get help claiming the right deductions on other-source incomeLast updated 9 September 2026