Income-tax law / Chapter VI / Aggregation of income
Section 66 of the Income-tax Act, 1961: Meaning of Total Income
Section 66 explains that certain income remains part of the computation of total income even though the law provides that no income-tax is payable on that income under Chapter VII. The distinction matters when reading aggregation and tax computation provisions together.
Section 66: Statutory text
In computing the total income of an assessee, there shall be included all income on which no income-tax is payable under Chapter VII.
Historical amendment note: The original page records that words relating to deductions from income-tax under sections 87, 87A and 88 were omitted by Act 20 of 1967, section 33 and the Third Schedule, with effect from 1 April 1968. The omitted words are not part of the operative text reproduced above.
Meaning and scope of Section 66
Total income is the amount determined by applying the relevant charging, inclusion, computation, aggregation, set-off and deduction provisions of the Act. Assessee means a person in relation to whom income-tax or another sum is payable, and includes other persons covered by the statutory definition. Aggregation is the process of bringing relevant income components together in the computation.
Section 66 sits in Chapter VI (Aggregation of Income and Set Off or Carry Forward of Loss) of the Income-tax Act, 1961. It deals specifically with income described by Chapter VII, titled Incomes forming part of total income on which no income-tax is payable. The rule is not a general direction to include every receipt that is otherwise exempt from total income.
Inclusion is different from charging tax
Where a specific provision says that no income-tax is payable on an income component but requires its inclusion in total income, Section 66 recognises that inclusion. Whether and how that income affects the final tax calculation depends on the precise applicable provision and the relevant year. Income excluded from total income by a separate exemption provision should not automatically be treated as covered by Section 66.
Illustrative situations
| Situation | Approach |
|---|---|
| Income covered by a Chapter VII provision under the 1961 Act | Consider it in total income under Section 66, while applying the specific rule under which no tax is payable. |
| Income expressly excluded from total income under another provision | Apply that exclusion on its own terms; Section 66 does not override every exclusion. |
| Income earned in a tax year governed by the 2025 Act | Read Section 101 and Chapter XVII-A of the 2025 Act instead of relying solely on the 1961 Act numbering. |
These examples explain statutory structure and do not calculate a particular taxpayer's liability.
Corresponding provision: Section 101 of the Income-tax Act, 2025
Section 101 of the Income-tax Act, 2025 carries forward the rule concerning income included in total income even though no income-tax is payable on it. Its reference is to Chapter XVII-A rather than Chapter VII. The 2025 Act uses a tax year framework and applies from 1 April 2026, subject to transitional rules. Importantly, Section 66 of the 2025 Act is a different provision titled "Interpretation", not the successor to Section 66 of the 1961 Act.
For current assessments, read the amended 2025 legislation and any applicable Finance Act changes before relying on a historical provision.
Frequently asked questions
What does Section 66 of the Income-tax Act, 1961 provide?
It provides that income on which no income-tax is payable under Chapter VII is nevertheless included when computing the assessee's total income.
Does inclusion under Section 66 make the income taxable?
No. Inclusion in total income and the separate rule that no tax is payable on a particular component are distinct questions. The applicable provisions must be read together.
What is the corresponding provision in the Income-tax Act, 2025?
Section 101 of the Income-tax Act, 2025 addresses total income and refers to income on which no income-tax is payable under Chapter XVII-A.
Official legislation and references
- Income Tax Department: Section 66 of the Income-tax Act, 1961
- Income Tax Department: Income-tax Act, 2025, as amended by Finance Act, 2026 (official PDF)
- Income Tax Department: 2025 Act and transition resources
Last reviewed: 25 October 2026. This article is general legal information; apply the statutory text for the relevant tax year and facts.