Sl.No.

Para No

Clause No.

Observation/Recommendation

1.

2.6.1

Sub-Clause 2(1) – "accountant"

The thorough examination of the proposed Sub-Clause 2(1), pertaining to the definition of 'accountant', reveals that while various suggestions for its expansion were received, the provision retains the long-standing legal position from the Income-tax Act, 1961. The proposed Clause 2(1) aligns with the stated objective of the Bill to ensure continuity and avoid major policy changes. The Committee note the Ministry’s detailed justification that the scope of practice for different professionals is governed by their respective parent legislations, and the functions mandated under the Income-tax Act, such as the audit of financial transactions, fall within the domain specified under the Chartered Accountants Act, 1949. Thus, the Committee, having considered the extensive deliberations and the justification provided by the Ministry of Finance, accept the proposed Clause 2(1) in its entirety.

2.

2.6.2

Sub-Clause 2(5) “Agricultural Income”

During the review of the proposed Sub-Clause 2(5), which defines 'agricultural income', the Committee considered submissions arguing for an expansion of the definition to cover a wider range of activities. However, Committee note that the sub-clause, as drafted, is a textual simplification that preserves the existing legal framework from the 1961 Act. The provision aligns with the Bill's core principle of ensuring continuity by avoiding major policy changes. The Committee took note of the Ministry's detailed justification, which cautioned that broadening the definition could inadvertently bring commercial trading activities under the ambit of agricultural income, creating avenues for tax avoidance. Given these considerations, and after reviewing the Ministry's stance, the Committee accept the proposed Clause 2(5) in its entirety and recommend no change.

3.

2.6.3

Sub-Clause 2(6) –"amalgamation"

The Committee, upon deliberation of the provisions of the Clause 2(6), note a minor textual ambiguity that could lead to misinterpretation. In Clause 2(6), the phrase "amalgamating company, and the companies" needs to be replaced with "amalgamating company, or companies". The Ministry, when this was pointed out, was amenable to this correction. Thus, the Committee recommend the Ministry to rephrase it to ensure precise legislative intent and also reduce potential misinterpretations and future litigation.

4.

2.6.4

Sub-Clause 2(7) “Annual Value”

The Committee note that Sub-Clause 2(7) of the Income-Tax Bill, 2025 provides for the definition of ‘Annual Value’ and corresponds to Section 2(2) of the Income-Tax Act, 1961. This definition is of fundamental importance as ‘annual value’ serves as the primary basis for the computation of income under the head "Income from house property". The Committee further observe that the substantive meaning has been carried forward without alteration from the erstwhile Section 2(2) into the proposed Clause 2(7). The revision is primarily one of textual simplification, undertaken for enhanced clarity in alignment with the Bill's overarching goals. Concurring with the Ministry's satisfactory justification for the related provisions, and acknowledging that the essence of the original provision is preserved, the Committee find the clause acceptable as drafted and recommend its adoption without any modification.

5.

2.6.5

Sub-Clause 2(17) “block of assets”

The Committee note that Sub-Clause 2(17) of the Income-Tax Bill, 2025 provides for the definition of ‘block of assets’ and corresponds to Section 2(11) of the Income-Tax Act, 1961. This definition is fundamental to the scheme of depreciation, providing a basis for grouping various tangible and intangible assets for the purpose of calculating depreciation allowances. It is also noteworthy to mention here that there is migration of the contents from the erstwhile Section 2(11) to the Clause 2(17) of the IT Bill, 2025 in terms of scope and intent. The major difference lies only in the textual simplification of the language for better clarity, which is in line with the Bill's objectives. The justification given by the Ministry is also found to be satisfactory. Therefore, the Committee accept the Clause 2(17) as proposed by the Ministry.

6.

2.6.6

Sub-Clause 2(19) “Books or Books of account”

In the review of the proposed Clause 2(19), which lays out the definition for ‘books or books of account’ and is the corresponding provision to Section 2(12A) of the 1961 Act, the Committee took note of its importance. The scope of this definition is crucial as it determines the nature of records required to be maintained for tax purposes. The Committee noted that the provision has been suitably modernized to encompass contemporary methods of data storage while retaining the essence of the original section. Specifically, the inclusion of records maintained in ‘any digital form’, through ‘cloud based storage’, and on various ‘portable data storage devices’ represents a timely and essential update to the law. The Committee find the Ministry's rationale for this update to remove ambiguity surrounding modern technology to be sound. Consequently, recognizing that this modernized definition brings essential clarity, the Committee recommend the adoption of Clause 2(19) without modification.

7.

2.6.7

Sub-Clause 2(21) “Business trust”

The Committee reviewed provisions defining a ‘Business Trust’ as given in the Sub-clause. This Sub-clause, which is the corresponding provision to Section 2(13A) of the Income-tax Act, 1961, defines the term by referencing the relevant regulations of the Securities and Exchange Board of India. The Committee observe that the essence and scope of the definition from the erstwhile Act have been preserved in the Bill. The revision primarily focuses on textual simplification, ensuring the definition is clear and directly aligned with the current regulatory framework. The Ministry's justification that the provision has been simplified while retaining the same intent is found to be satisfactory. Therefore, the Committee recommend the acceptance of Clause 2(21) as proposed, without any modifications.

8.

2.6.8

Sub-Clause 2(22) “Capital Asset”

During the review of Sub-clause 2(22), the Committee identified a need to align its definition of 'capital asset' with recent amendments introduced by the Finance Act, 2025. This alignment is necessary to reflect the contemporary legal landscape regarding the treatment of certain securities held by Foreign Institutional Investors and investment funds. The Ministry acknowledged this as a valid drafting correction and conveyed its acceptance. The Committee, therefore, recommend that Sub-clause 2(22)(b) be modified to incorporate these statutory changes to avoid discrepancies and ensure a clear, consistent, and relevant tax framework and rest of the Sub-clause be accepted as proposed.

9.

2.6.9

Sub-Clause2(23)–

"charitablepurpose"

The Committee, upon extensive deliberations on the sub clause 2(23) and the justifications provided by the Ministry, note that the sub clause aligns with Section 2(15) of the Income-tax Act, 1961 and therefore, accept the sub clause in its original form.

10.

2.6.10

Sub-Clause 2(28) –

"company"

Following a review of Clause 2(28)(c), the Committee found a terminological inconsistency with the Bill's new lexicon. This clause, corresponds to Section 2(17) of the Income-tax Act, 1961. To enhance consistency throughout the new Bill, the phrase "assessment year" in Clause 2(28)(c) should be substituted with "tax year". The Ministry acknowledged this as a necessary drafting correction and agreed to the modification. The Committee, therefore, recommend the Ministry rephrase the clause to ensure a coherent and easily comprehensible legislative framework.

11.

2.6.11

Sub-Clause 2(29) –

"company in which the public are substantially interested"

Upon careful consideration of Clause 2(29)(f), the Committee identified a drafting ambiguity that could cause unintended interpretations. The provision should be amended to make it clear that the conditions for classification—namely, stock exchange listing and specific public/government shareholding—are alternative, not cumulative. The Ministry accepted this as a necessary drafting correction to align with the original legislative intent. In light of this, the Committee recommend that the Ministry amend the provision to ensure these criteria are distinctly articulated, which is vital for simplifying compliance and reducing the scope for future litigation.

12.

2.6.12

2.6.12.2

Sub-Clause 2(35) –

"demerger"

The Committee, having thoroughly examined sub clause 2(35) along with justification given by the Ministry, note that the said sub clause is mere textual simplification of the Section 2(19AA) of the Income- tax Act, 1961. The Committee note that the intent of the corresponding section of the old Act has been retained in the current provision with enhanced clarity. The Committee, therefore, accept the sub-clause 2(35) as proposed.

13.

2.6.13

Sub-Clause 2(40) –

"dividend"

The Committee observe that the proposed Clause 2(40) of the Income-Tax Bill, 2025, provides an inclusive definition of the term 'dividend' and corresponds to Section 2(22) of the Income-Tax Act, 1961. This definition is crucial as it outlines various types of corporate distributions that are treated as dividend income for tax purposes, including essential anti-abuse provisions related to deemed dividends. The Committee note that intent of the corresponding section from the 1961 Act have been retained without any substantive deviation. The primary revision in the proposed clause is the textual simplification and logical re-ordering of its components, which aligns with the Bill's objective of enhancing clarity. The justification provided by the Ministry for retaining the existing principles within this simplified structure is found to be satisfactory. Therefore, the Committee accept Clause 2(40) as proposed by the Ministry and recommend no change.

14.

2.6.14

Sub-Clause 2(48) –

"hearing"

The Committee note that this Sub-clause, corresponding to Section 2(23C) of the Income-tax Act, 1961, formally incorporates modern communication methods into the legal framework. The Committee note that explicitly including the 'communication of data and documents through electronic mode' within the definition is a crucial step towards providing statutory backing for virtual and faceless proceedings. The Ministry's justification is that this inclusive definition provides clarity and is sufficient to cover virtual interactions, which the Committee find satisfactory. Therefore, recognizing that this definition codifies current administrative practices and supports the digital transformation of tax administration, the Committee accept Clause 2(48) as proposed and recommend no change.

15.

2.6.15

Sub-Clause 2(49) – "income"

Sub-Clause 2(49) – "income"

Upon careful consideration of Clause 2(49), the Committee note a drafting error in sub-clause (x) that undermines the Bill's objective of being a self- contained legislative code, making reference to the Income-tax Act, 1961. The Ministry accepted this as an inadvertent drafting error and agreed to the omission. In light of this, the Committee recommend the Ministry to remove reference to the old Act 1961 from the body of the Bill and by clubbing it in the Savings clause 536 of the Bill. The rest of the provision of the Sub-clause may be accepted as proposed.

16.

2.6.16

Sub-Clause 2(50) – "Income Computation and Disclosure Standards"

Committee note that this clause provides a direct reference point for the standards notified under Section 276(2) of the Bill, which are essential for computing income under certain heads. The Committee are of the opinion that placing this definition in Clause 2 improves the the structural coherence and accessibility of the Bill while maintaining an established legal principle, the Committee accept Clause 2(50) as proposed and recommend no change.

17.

2.6.17

Sub-Clause 2(55) –

"infrastructure capital company"

The Committee upon consideration of Clause 2(55), note that the definition of 'infrastructure capital company' relies on cross-references to provisions in the repealed Income-tax Act, 1961, leading to unnecessary complexity. The Committee, therefore, recommend the Ministry to incorporate the full definition of 'infrastructure facility' in the new Bill itself, remove reference to the old Act and make the current Bill self-contained by clubbing it in the savings clause 536 of the Bill appropriately.

18.

2.6.18

Sub-Clause 2(72) – "Non-

Resident"

The Committee note that this clause, corresponds to Section 2(30) of the Income-tax Act, 1961, and defines a 'non-resident' by reference to the primary residency tests contained in Clause 6 of the Bill. The Committee find that this cross-referential approach is structurally sound, placing the basic definition in the main definitional clause while the detailed criteria for determination remain in the operative section. The Ministry's justification for retaining this definitional structure is that the term is used extensively throughout the Bill, and this approach provides necessary consistency while avoiding repetition. Therefore, recognizing that the proposed clause preserves the established legal meaning within a logical legislative structure, the Committee accept Clause 2(72) as proposed and recommend no change.

19.

2.6.19

Sub-Clause 2(86) –

"Profession"

Committee note that this clause, corresponds to Section 2(36) of the Income-tax Act, 1961, states that 'profession' includes 'vocation'. The Committee note that this is a settled legal concept, having been part of India's tax statutes and upheld by judicial pronouncements, including by the Supreme Court. The Ministry's detailed justification, highlighting that this approach is also consistent with global best practices, is found to be satisfactory. Therefore, the Committee accept Clause 2(86) as proposed and recommend no change.

20.

2.6.20

Sub-Clause 2(101) – "short- term capital asset"

After the consideration of Clause 2(101), the Committee identified a crucial drafting error in Sub-Clause (c)(A) that could have lead to an incorrect application of holding period rules for a company in liquidation. The provision in sub-clause (c)(A) should be amended to explicitly state that the exclusion of the post-liquidation period from the holding period computation applies specifically to shares. The Ministry acknowledged this as an inadvertent drafting error and confirmed its acceptance of the necessary textual addition to clarify this point. In light of this, the Committee recommend that the Ministry amend the provision as stated, as rectifying such drafting oversights is paramount for creating a robust legislative text and providing clarity on the tax treatment of shares in companies undergoing liquidation.

21.

2.6.21

Sub-Clause 2(103) – "slump sale"

The Committee note that this clause, corresponds to Section 2(42C) of the Income-tax Act, 1961, and it has been textually simplified as part of the Bill's redrafting, while retaining the core principle of a transfer of an undertaking for a lump sum consideration. The Committee accept the Ministry's justification that a specific explanation cross- referencing the definition of 'transfer' was removed as a simplification measure. This is because the comprehensive definition of 'transfer' provided in Clause 2(109) of the Bill applies to all provisions, making the separate explanation redundant. Therefore, the Committee accept the Clause 2(103) as proposed and recommend no change.

22.

2.6.22

Sub-Clause 2(108) – "Total Income"

The Committee have reviewed Clause 2(108), which defines ‘Total Income’ and corresponds to Section 2(45) of the 1961 Act. The Committee note that the definition is foundational, establishing that total income is computed based on the comprehensive provisions laid out across the Act. The Committee concurs with the Ministry's justification that a broad reference to the Act's overall computation method is essential for its correct application to all classes of taxpayers and income. Accordingly, the Committee recommend no changes in the Clause 2(108).

23.

2.6.23

Recommendation for the rest of Sub-clauses of Clause 2

The Committee have examined in detail Clause 2 of the Income-tax Bill, 2025, which lays down the definitional background of the proposed legislation through 112 distinct sub-clauses. Committee note that there are 23 newly added definations in the bill 2(1) “accountant”, 2(30) “convertible foreign exchange”, 2(31) “co-operative bank”, 2(33) “currency”, 2(47) “foreign currency”, 2(50) “Income Computation and Disclosure Standards”, 2(54) “Indian currency”, 2(61) “International Financial Services Centre”, 2(71) “non-banking financial company”, 2(73) “notification”, 2(74) “partner”, 2(75) “partnership”, 2(76) “Permanent Account Number (PAN)”, 2(78) “person of Indian origin”, 2(87) “public sector bank”, 2(92) “recognised stock exchange”, 2(95) “Reserve Bank of India”, 2(98) “scheduled bank”, 2(99) “Securities and Exchange Board of India”, 2(100) “senior citizen”, 2(104) “Special Economic Zone”, 2(105) “stamp duty value”, and 2(110) “Valuation Officer”.

The definitions in this clause serve as reference points for the provisions across the Bill. The Committee note that this Clause draws substantially from Section 2 of the existing Income- tax Act, 1961, with modifications made largely for purposes of textual simplification, harmonisation with contemporary laws, and introduction of modern terms. Upon scrutiny of the stakeholder engagement process, the Committee observe that substantive views or suggestions from experts, professional bodies, or industry associations were received only on a select number of key definitions on around 22 sub-clauses, mostly involving policy shifts, or sectoral ramifications. These include terms such as “accountant”, “charitable purpose”, “books of account”, etc. among others.

In contrast, for the vast majority of sub-clauses under Clause 2, no stakeholder comments were received. The Committee understand this absence not as a sign of neglect, but rather as an indication of broad-based acceptance of the provisions concerned. Many of these definitions pertain to statutory designations (such as “Additional Commissioner”, “Joint Director”, “Principal Commissioner”), procedural terms (like “assessment”, “advance tax”, “firm”), or references to institutions and roles already well- established in the statutory ecosystem. In several such cases, the Bill either replicates the 1961 Act with updated language or aligns with contemporary definitions in the major legislations including the Companies Act ( sub-clause 2(29), 2(35), 2(38) ), Banking Regulation Act ( sub-clause 2(31) ), Bharatiya Nyaya Sanhita, 2023 ( sub-clause 2(89) ); Foreign Exchnage Management Act,1999 (( Sub-Clause 2(30), 2(33) ) the Information Technology Act( sub-clause 2(41) ) etc.

After extensive deliberations on all of the Sub-clauses in Clause 2, the Committee find that the sub-clauses not commented on above are legally sound and well- aligned with the proposed legislation. Therefore, the Committee recommend that the remaining Sub-Clauses under Clause 2 be accepted as proposed in the Income-tax Bill, 2025.

24.

3.6

Clause 3 Definition of "tax year".

Committee find that Clause 3 of the Bill proposes a significant change by replacing the dual concepts of "previous year" and "assessment year" with a single, unified term: "tax year". The Committee note that this change represents a major simplification, addressing a long-standing point of confusion for countless taxpayers. The adoption of a single, consistent "tax year" streamlines tax period references throughout the legislation, making the law more accessible and easier to understand. Despite many countries using a calendar year, the Bill retains India's traditional April to March cycle.The Committee believe that this definitional clarity is a commendable step towards enhancing the ease of comprehension and compliance, thereby aligning the Bill with its core objective of simplifying the tax framework. Accordingly, the Committee accept Clause 3 as it stands.

25.

4.6.1

Clause No. 4:Charge of income-tax Sub clause 4(1)

The Committee, after a careful review of Clause 4(1), identified a need to enhance its clarity to avoid legal ambiguity regarding the application of tax rates. The Committee, therefore, propose that in Clause 4(1), the phrase "subject to the provisions of this Act" be incorporated. The Ministry conveyed its acceptance of this change as a necessary drafting correction. Accordingly, the Committee recommend that the Ministry amend the clause accordingly.

26.

4.6.2

Clause No. 4:Charge of income-tax

Sub clause 4(5)

The Committee, during deliberation on Clause 4(5), identified a drafting omission that could affect the comprehensive application of tax collection mechanisms . Accordingly, the Committee recommend that Clause 4(5) be amended to explicitly clarify that its provisions for tax collection through deduction at source, collection at source, and advance payment apply to all income chargeable under Clause 4, including income mentioned in sub-section (4).The Committee further accept the remaining provisions of Clause 4 as proposed.

27.

5.4

Clause No. 5 : Scope of total income

The Committee, after a detailed examination of Clause 5 of the Income-tax Bill, 2025, which defines the scope of total income, note that the provision corresponds to Section 5 of the Income-tax Act, 1961. The Committee observe that the structure and language of the clause have been simplified, while the substantive legal position regarding the taxation of income based on residential status—whether resident, not ordinarily resident, or non-resident—has been retained without alteration.The Committee also take note of the Ministry of Finance’s justification that the intent and coverage of the existing provision remain unchanged, and that the revisions are only intended to enhance clarity and readability. The Committee further observe that no material concerns or substantive objections have been raised by stakeholders with respect to this clause.Accordingly, the Committee find the proposed Clause 5 to be in line with the existing legal framework and accept the clause as it stands.

28.

6.6.1

Clause No. 6: Residence in India.

Sub-clause 6(1)

The Committee, during the review of Clause 6(1), identified a textual ambiguity that could inadvertently limit the scope of the provision for determining residential status. The Committee, therefore, recommended that the Clause 6(1), the wording be amended to clarify that the clause applies to determining the residence in India of any person, not just persons who are already physically present in the country. This modification is essential for minimizing potential disputes over jurisdiction.

29.

6.6.2

Clause No. 6: Residence in India.

Sub-clause 6(3)(b)

The Committee, after a review of Clause 6(3), identified that a change in wording from the previous Act could unintentionally narrow the scope of an important exemption for Indian citizens leaving the country for work. The Committee, therefore, recommend that in Clause 6(3)(b), the phrase "for employment outside India" be substituted with "for the purposes of employment outside India" to avoid ambiguity and align with settled judicial interpretation.

30.

6.6.3

Clause No. 6: Residence in India.

Sub-clause 6(13)

The Committee, during the delibertaions on Clause 6(13), identified an omission in sub-clause (b)(ii) that could create ambiguity in its application when determining residential status. The Committee, accordingly, recommend that Clause 6(13)(b)(ii) be amended to explicitly state that the presence requirement of "one hundred and twenty days or more" pertains to the current tax year. The Committee further accept the remaining provisions of Clause 6 as proposed.

31.

7

Clause No.7: Income deemed to be received

The Committee, after a careful review of Clause 7, identified a structural issue arising from the merger of two distinct provisions from the previous Act, which were historically in separate sections.The Committee, therefore, recommend that the clause be amended to better distinguish between its two components: general 'income deemed to be received' and the specific 'deeming of dividend income for a year'. This will lead to better readability and will minimize potential misinterpretations regarding the scope of the provision, ensuring absolute clarity in categorization.

32.

8.4

Clause No. 8: Income on receipt of capital asset or stock- in-trade by specified person from specified entity.

The Committee note that Clause 8 of the Income-tax Bill, 2025 corresponds to Section 9B of the Income-tax Act, 1961 and deals with the tax implications arising from the receipt of capital assets or stock-in-trade by a specified person from a specified entity in the event of its dissolution or reconstitution.The Committee also note that necessary definitions have been retained, and the existing provisions have been textually simplified while retaining their original intent. Since no major concerns were raised by stakeholders and the Ministry has clarified that there is no change in intent or substance, the Committee are of the view that the proposed clause faithfully carries forward the original provision and improves its readability. Accordingly, the Committee recommend acceptance of Clause 8 as proposed in the Bill.

33.

9.6.1

Clause No 9: Income Deemed to Accrue or Arise in India

Sub-clause 9(5)

The Committee, after a careful review of Clause 9(5), identified drafting issues related to incorrect referencing and structural incoherence that could affect its interpretation. The Committee, therefore, recommend that in Clause 9(5)(b), the reference be corrected to point to the broader Clause 9(5)(a), and that sub-clauses 9(5)(b)(i) and (ii) be combined to improve logical flow and textual coherence.

34.

9.6.2

Clause No 9

Sub-clause 9(6)

The Committee, upon deliberations on Clause 9(6), identified a critical typographical error in Sub-Clause (a)(iii)(B) that could significantly alter the scope of taxable royalty income for non-residents. The Committee, therefore, recommend that in the said sub-clause, the phrase "making or earning any income from any source outside India" be corrected to read "making or earning any income from any source in India".

35.

9.6.3

Clause No 9

Sub-clause 9(8)

The Committee, after a review of Clause 9(8)(c), identified that a key qualifying phrase appeared to have been inadvertently omitted from sub-clauses(ii)(A) and (B), which could lead to ambiguity in applying these crucial exclusions 1111. The Committee, therefore, recommend that in Clauses 9(8)(c)(ii)(A) and (B), the phrase "in case of Non- resident" be added to align the provision with the corresponding sections of the prevailing Income-tax Act, 1961.

36.

9.6.4

Clause No 9

Sub-clause 9(10)

The Committee, after reviewing sub-clause 9(10), identified a misspelt word. The Committee, therefore, recommend that in Clause 9(10)(b), the word "accure" be corrected to read "accrue". The Committee further accept the remaining provisions of Clause 9 as proposed.

37.

10.6

Clause No 10: Apportionmenet of income between spouses governed by Portuguese Civil Code.

The Committee, after considering Clause 10 of the Income-tax Bill, 2025, which relates to the apportionment of income between spouses governed by the Portuguese Civil Code, note that the provision corresponds to Section 5A of the Income-tax Act, 1961. The Clause retains the existing position regarding taxation of income of spouses who are governed by the community of property system in the State of Goa and the Union territories of Dadra and Nagar Haveli and Daman and Diu.

The Committee deliberated on a suggestion regarding deletion of the provision on the grounds that there is no longer a need for a separate tax treatment based on the Portuguese Civil Code, and that a uniform tax regime should now be applicable more than sixty years after Goa’s liberation. However, the Committee note the Ministry’s response that the provision reflects a long-standing and settled legal treatment, and its deletion would amount to a broader policy change beyond the scope of the present Bill. Accordingly, the Committee are of the view that Clause 10, which simplifies the language of the existing provision without altering its intent, may be accepted as proposed.

38.

11.6.1

Clause No.11: Incomes not to be included in total income

Sub-clause 11(4)

The Committee, after a careful review of Schedule II, identified a significant drafting error concerning the tax exemption for Unit Linked Insurance Plans (ULIPs) as outlined in Sl. No. 2, specifically in items 4 and 5, Column C. The Committee, therefore, recommend that in the relevant parts of Schedule II, the word "all" be replaced with the word "any" to ensure parity between the existing Act and the Bill.

The Committee, having examined the clause in its entirety, endorse the remaining provisions of Clause without any modifications.

39.

11.6.2

Clause No.11: Schedule II

The Committee, after a careful review of Schedule II, identified a significant drafting error concerning the tax exemption for Unit Linked Insurance Plans (ULIPs) as outlined in Sl. No. 2, specifically in items 4 and 5, Column C. The Committee, therefore, recommend that in the relevant parts of Schedule II, the word "all" be replaced with the word "any" to ensure parity between the existing Act and the Bill.

The Committee, having examined the clause in its entirety, endorse the remaining provisions of Clause without any modifications.

40.

12.4

Clause No.12: Incomes not to be included in total income of political parties and electoral trusts

The Committee, after examining Clause 12 of the Income-tax Bill, 2025, note that it relates to the exemption of certain incomes of political parties and electoral trusts from inclusion in total income. The Committee observe that the clause corresponds to Sections 13A and 13B of the Income-tax Act, 1961 and retains the substance of those provisions and present them in a simplified and consolidated manner through a newly introduced Schedule VIII. The Committee also note that the structure of Schedule VIII consolidates information in a tabular format, enhancing clarity and ease of compliance. The Committee find that there is no change in the intent or scope of the provision compared to the existing law, and the proposed drafting seeks to improve accessibility and administrative efficiency. No comments have been raised by stakeholders in this regard. Accordingly, the Committee are of the view that Clause 12 may be accepted as proposed.

41.

13.6

Clause No. 13: Heads of income

The Committee, after examining Clause 13 of the Income-tax Bill, 2025, note that it relates to the classification of income under specified heads for the purpose of computation, corresponding to Section 14 of the Income-tax Act, 1961. The provision maintains the existing five heads of income viz. salaries, income from house property, profits and gains of business or profession, capital gains, and income from other sources and presents them in a simplified and coherent manner. The Committee observe that the clause retains the scope and intent of the existing provision without any substantive alteration, and no concerns have been raised by stakeholders in this regard.

42.

14.6

Clause No. 14: Income not forming part of total Income and expenditure in relation to such Income

The Committee, upon review of Clause 14 of the Income-tax Bill, 2025, note that it relates to the disallowance of expenditure incurred in relation to income which does not form part of the total income. The clause corresponds to the existing Section 14A of the Income-tax Act, 1961 and seeks to maintain the underlying principle that no deduction shall be allowed for expenses incurred to earn exempt income. The Committee observe that the provision has been retained in substance and merely restated with minor editorial simplifications. No concerns or suggestions were raised by stakeholders regarding the clause.In light of the above, the Committee endorse Clause 14 as proposed, without suggesting any modification.

43.

15.6

Clause No.15: Salaries

The Committee, after examining Clause 15 of the Income-tax Bill, 2025, note that it pertains to the chargeability of income under the head “Salaries” and corresponds to Section 15 of the Income-tax Act, 1961. The provision continues to follow the principle that salary income is taxable either on due basis or on receipt, whichever is earlier, and covers various categories of payments including advances, arrears, and dues from past employment.Accordingly, the Committee are of the view that Clause 15 may be accepted in its current form without any amendment.

44.

16.4

Clause No.16:Income from Salary

The Committee, after examining Clause 16 of the Income-tax Bill, 2025, note that it defines the scope of income to be taxed under the head “Income from Salary.” The Committee further note that this clause corresponds to Section 17(1) of the Income- tax Act, 1961. It retains the essential components of 'salary'—such as wages, pension, gratuity, and leave encashment—while simplifying the text without making any substantive changes. Accordingly, the Committee recommend that Clause 16 may be accepted as proposed.

45.

17.6

Clause No. 17: Perquisite

Sub-clause 17(1)(b)

The Committee note that while Clause 17(1)(a) includes the phrase “computed in such manner, as prescribed,” the corresponding provision in Clause 17(1)(b) lacks this reference, potentially leading to ambiguity in interpreting the valuation method for concessional accommodation.The Committee, therefore, recommend that in Clause 17(1)(b), the phrase “computed in such manner, as prescribed” be explicitly inserted, mirroring the language used in Clause 17(1)(a). Accordingly, the Committee recommend that the Ministry amend the clause as proposed. The Committee further accept the remaining provisions of the Clause 17 as proposed.

46.

18.4

Clause No. 18: Profits in lieu of Salary

The Committee, after examining Clause 18 of the Income-tax Bill, 2025, note that it relates to the definition and scope of "profits in lieu of salary," and corresponds to section 17(3) of the Income-tax Act, 1961. The Committee observe that the clause seeks to enumerate various payments such as compensation on termination or modification of employment terms, amounts received before joining or after cessation of employment, payments from funds not comprising employee contributions, etc. that are to be treated as profits in lieu of salary for taxation purposes.The Committee note that the provision retains the substance of the existing law but improves readability. Accordingly, the Committee are of the view that Clause 18 may be accepted as proposed.

47.

19.6

Clause No 19: Deductions from salaries

(Schedule VII)

The Committee, after a careful review of Clause 19, identified a gap in the equitable tax treatment of commuted pension for different types of recipients. The Committee, therefore, recommend that a deduction for commuted pension, similar to that available to employees under Clause 19, be explicitly allowed under the head "Income from other sources" for non-employees who receive such pension from a fund. Accordingly, the Committee finds no further modifications are necessary for Clause 19 and recommend the acceptance of its remaining provisions as drafted.

48.

20.6

Clause No. 20:

Income from house property Sub-clause 20(2)

The Committee, upon reviewing of Clause 20, identified a change in wording in 20(2) from the previous Act that could lead to an incorrect tax treatment for certain business properties . The Committee, therefore, recommend that in Clause 20(2), the word “occupied” be replaced with the phrase “as he may occupy” to ensure that temporarily unutilized or ready-to-use business properties are clearly excluded from taxation under the house property head. Accordingly, the Committee, recommend that the Ministry amend the clause as proposed to accurately delineate the scope of "Income from house property". The Committee further accept the remaining provision of the Clause 20 as proposed.

49.

21.6

Clause No.21: Determination of annual value.

Sub-clause 21(2)

The Committee, after a careful review of Clause 21, identified drafting issues in 21(2) that could lead to ambiguity in determining the annual value for properties experiencing vacancy. The Committee, therefore, recommend two key changes: first, that the phrase "in normal course" be deleted, and second, that the clause be amended to explicitly provide for a comparison of the actual rent received with the "deeming rent," as was available in the existing Act. Committee believe these adjustments are vital for enhancing fairness, reducing ambiguity in the valuation of vacant properties, and leading to a more equitable tax treatment for property owners. The Committee, further, recommend that rest of the Clasues may be accepted in their current form.

50.

22.6

Clause No.22: Deductions from income from house property.

Sub-clause 22(1) and 22(2)

The Committee, after deliberations on Clause 22, identified the need to clarify the computation of deductions to enhance fairness and transparency for property owners. The Committee, recommend two key amendments: firstly, in Clause 22(1)(a), to explicitly state that the standard 30% deduction is computed on the annual value after deducting municipal taxes; and secondly, in Clause 22(2), to ensure the deduction for pre-construction interest is available for let-out properties in addition to self- occupied ones, aligning it with the existing Act. Further, the Committee accept the remaining provisions of Clause 22 as proposed in the Bill.

51.

23.4

Clause No. 23: Arrears of rent and unrealised rent received subsequently

After thorough deliberation on Clause 23, the Committee observe that its provisions for taxing subsequently received arrears of rent and unrealised rent correspond to Section 25A of the 1961 Act. Finding that the clause is a textual simplification which retains the original substance, the Committee recommend its acceptance as it stands.

52.

24.6

Clause No. 24: Property owned by co- owners

The Committee observe that Clause 24, corresponding to Section 26 of the Income-tax Act, 1961, sets out the provisions for taxing income from properties that are co-owned with definite and ascertainable shares.The Committee observe that the proposed clause is a textual simplification of the existing law, preserving its core intent and application without any substantive deviation. Therefore, the Committee accept Clause 24 as proposed by the Ministry and recommend no modification.

53.

25.6

Clause No.25

:Interpretation.

The Committee deliberated upon Clause 25, which provides the interpretative definition of 'owner' for the purposes of computing income from house property. This clause, corresponding to Section 27 of the Income-tax Act, 1961, consolidates the various scenarios of deemed ownership into a single, cohesive provision. The Committee observe that the clause retains the established legal principles and preserves necessary anti-abuse provisions while simplifying the language. Therefore, the Committee accept Clause 25 as proposed and recommend no change.

54.

26.6

26

The Committee, upon examination, note some drafting errors i.e. the usage of words ‘named’ and ‘input’ in Clause 26(2)(b) and in Clause 26(2)(e) respectively. The Committee thus, recommend that in Clause 26(2)(b), the word ‘named’ be replaced with ‘name’, and in Clause 26(2)(e), the word ‘input’ be substituted with ‘import’.

Furthe rmore, the Committee recommend that necessary amendments be carried out in the Bill to ensure consistent application and smooth transition of Section 35AD into the new Income-Tax Bill (ITB), 2025. Specifically, Clause 26(2)(k) should incorporate a provision stating that any amount received from the sale of a capital asset acquired and used for the purpose of a specified business for which 100% deduction was claimed under Section 35AD of the Income-Tax Act, 1961 shall be taxed as business income if such asset is sold on or after the date on which the new Income-Tax Bill comes into effect.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause subject to the above proposed modifications.

55.

27.4

27

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands.

56.

28.6

28

The Committee, upon examination, note that in Clause 28(1), the words “wholly and exclusively” are not necessary as if the premises, etc., are used only partly for business purposes, then provision for making disallowance has already been made under Clause 28(2). The Committee, thus recommend that in Clause 28(1), the words “wholly and exclusively” be omitted.

The Committee further recommend that in Clause 28(1)(e), the phrase “by the premises occupied” be omitted to convey the correct meaning. Clause 28(1)(e) may accordingly be revised to read as follows:

“(e) cost of repairs, not being capital expenditure, when the premises are occupied by the assessee as a tenant.”

The Committee also recommend that a new clause (f) be inserted after Clause 28(1)(e), since the current clause does not cover deductions for current repairs to machinery, plant or furniture. The proposed clause may read as follows:

“(f) the amount paid on account of current repairs to machinery, plant or furniture.”

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

57.

29.6

29

The Committee after thorough examination and deliberation and the justification given by the Ministry of Finance find the provisions of the proposed Clause29 to be acceptable as it is without any modifications.

58.

30.4

30

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause in entirety.

59.

31.6

31

The Committee, upon examination, note that the word “irrevocable” has been usedin the third and eighth lines of Clause 31(3)(b). The Committee feel that the word “irrecoverable” is more appropriate in the context of bad debts. The Committee, thus, recommend that in the third and eighth lines of Clause 31(3)(b), the word “irrevocable” may be substituted with “irrecoverable”.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

60.

32.6

32

The Committee, upon examination, note that the term “financial corporation” has been used in Clause 32(1)(e)(ii)(A)(I) which is not defined under Section 2(72) of the Companies Act, 2013 (CA-13). The Committee, thus recommend that in Clause 32(1)(e)(ii)(A)(I), the term “financial corporation” be replaced with “public financial institution”, as the latter is the term defined under Section 2(72) of the Companies Act, 2013 (CA-13), whereas the term “financial corporation” is not defined therein.

Further, with respect to Clause 32(1)(e)(ii)(C)(III), the Committee recommend that the expression “an undertaking referred to in sub-section (10) of Section 80-IB of the Income-tax Act, 1961” be used instead of “an undertaking referred to in section 141(5)”, as no such Section 141(5) exists in the draft Income-Tax Bill, 2025. The Committee on similar lines of reproducing definition of ‘infrastructure facility’ in the Bill from the Income-Tax Act, 1961, also urge for reproducing the definition of ‘undertaking’ instead of the expression “an undertaking referred to in sub-section (10) of Section 80-IB of the Income-tax Act, 1961”. The same may be appropriately done by clubbing in the savings clause 536.

With regard to provision 32(1)(h) for disallowance of Marked to Market (MTM) losses not computed as per Income Computation and Disclosure Standards (ICDS), the Committee recommend that the same be provided for in Clause 32(1)(h) of the Bill.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

61.

33.6

33

The Committee, upon examination of Clause 33 of the Income-tax Bill, 2025, observe that the phrase “intangible assets acquired” under Clause 33(1)(b) does not specify a cut-off date. Under the provisions of the Income-tax Act, 1961, depreciation on intangible assets is allowed only for those acquired on or after 1st April, 1998. The Committee thus, recommend that in Clause 33(1)(b), the words “acquired on or after the 1st day of April, 1998” be inserted after the phrase “intangible assets acquired”, to ensure that depreciation is allowed only on those intangible assets acquired after the specified date, in line with the provisions of the 1961 Act, and not on all such assets.

Further, with regard to the Clause, the Committee recommend that the term “tangible assets” be used in place of “block of assets”. This is because the term “block of assets” implies the inclusion of intangible assets as well for the purpose of computing the proportionate part used for business. However, under the 1961 Act, depreciation in such cases is restricted to a fair proportion as determined by the Assessing Officer and is applicable only to tangible assets that are either partly or not wholly and exclusively used for business purposes.

In addition, the Committee recommend that the reference to sub-section (8) be deleted from sub-section (4), since sub-section (9) already contains a specific provision that restricts additional depreciation to 50% where the asset is acquired and put to use for less than 180 days.

The Committee also recommend that a reference to Clause 33(3) be added in Clause 33(4), as Section (3) deals with the rate of depreciation applicable in the case of a block of assets.

To enhance clarity in Clause 33(9), the Committee recommend that the condition precede the rate in sub-clauses (a) and (b), and that the sub-section be redrafted as follows:

(9) The additional deduction referred to in sub-section (8) shall be––

(a) If the new plant and machinery is acquired and put to use for 180 days or more in the relevant tax year, 20% of the actual cost of the new machinery or plant in the tax year when it is acquired and put to use; or

(b) In other cases, 10% of the actual cost, and the remaining 10% shall be allowed in the immediately succeeding tax year.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

62.

34.6

34

The Committee after thorough deliberation upon the provisions of the Clause and the justification given by the Ministry of Finance find the provisions of the proposed Clause 34 to be acceptable as it is without any modifications.

63.

35.6

35

The Committee, upon examination, note that the reference to Section 200 of the Companies Act, 1956, in Schedule III, Table, at S. No. 10(c), as cited in Clause 35(a)(ii), is erroneous. The corresponding provisions under Section 200 of the 1956 Act do not exist in the Companies Act, 2013. Additionally, Schedule III, Table at S. No. 10(c) already provides that the exemption on perquisites is available even if such perquisite is paid, regardless of Section 200 of the Companies Act, 1956, thereby rendering the reference redundant, the Committee thus recommend that the provisions in Schedule III, Table, at S. No. 10(c), as referred to in Clause 35(a)(ii), be omitted.

Further, with respect to situations where tax is deducted in one year but paid after the due date for filing the return in the subsequent year which is not currently addressed in Clause 35(b)(i) and (ii), the Committee recommend that explicit provisions be incorporated in the respective clauses to address such cases.

The Committee further recommend that Clause 35(d) be omitted, as the Government’s amendments to the Finance Act, 2025, have removed the Equalization Levy on specified services, rendering this clause redundant.

Regarding Clause 35(e), the Committee recommend that it be redrafted to ensure that the phrase “a State Government undertaking or by the State Government” clearly applies to both Sub-Clauses of Clause 35(e) of the Bill.

The Committee would also like to recommend redrafting of Clause 35(f)(iv) and (v) for providing better clarity as below:

(iv) on interest to any partner as authorised by the partnership deed, exceeding 12% simple interest per annum,

(v) In this clause––

(A) “book profit” means the net profit, as shown in the profit and loss account for the relevant tax year, computed as per Chapter IVD as increased by the aggregate amount of the remuneration to all the partners of the firm, if such amount has been deducted while computing the net profit;

(B) “working partner” means an individual who is actively engaged in conducting the affairs of the business or profession of the firm of which he is a partner;

(C) where an individual is a partner in a firm, on behalf of or for the benefit of any other person, such partner and any other person shall be referred as a “representative partner” and the “person so represented”, respectively, then the provisions of sub-clause (ii) and (iv)––

shall not be applicable in respect of interest paid to such individual not as a representative partner;

shall be applicable in respect of interest paid to an individual as a representative partner and the person so represented;

shall not be applicable in respect of interest paid to a partner, otherwise than as a representative partner, on behalf of or for the benefit of any other person.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

64.

36.6

36

The Committee recommend that the page margin accompanying Clause 36 be corrected to read “Expenses or payments not deductible in certain circumstances” instead of “Expenses or payments not deductible in certain circmstances”, in order to ensure grammatical accuracy and correct spelling.

Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to above proposed modification.

65.

37.6

37

The Committee observe that Clause 37(1) does not clearly specify whether expenses that are specifically disallowed under other provisions of the Income-tax Bill, 2025, can still be claimed under this clause on the basis of actual payment. The Committee recommend that to provide clarity and ensure that no ambiguity arises regarding whether expenses specifically disallowed under other provisions of the Income-Tax Bill, 2025, can be claimed under Section 37 on the basis of actual payment; the phrase “otherwise allowable” be inserted in Clause 37(1).

The Committee also recommend that provisions similar to Explanation 2 to Section 43B of the Income- tax Act, 1961 defining the expression “any sum payable” which have presently been omitted, be incorporated into the Bill to enhance clarity and eliminate interpretational uncertainty.

Further, the Committee recommend that the word “advances” at the end of Clause 37(2)(e) be replaced with the word “borrowing”, in order to align the new provision with the existing one and to avoid potential issues in interpretation.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

66.

38.6

38

The Committee note the use of the word “earlier” in Clause 38(2)(a) and also observe that the condition in Clause 38(2)(a) is for clause 38(1) to apply viz. that "only when an allowance or deduction has been made in assessment for any earlier tax year towards the trading liability, loss or expenditure incurred". The Committee feel that this wording is repetitive and should be omitted to avoid confusion. Moreover, retaining “earlier” could lead to misinterpretation that if the deduction or allowance is granted in the current tax year, its remission would not be taxable, as Clause 38(2)(a) restricts the condition to allowance in an “earlier” tax year only. The Committee thus, recommend that in Clause 38(2)(a) the word “earlier” be removed.

The Committee further recommend that Clause 38(2)(b) should refer to section 33(2) and not section 33, being depreciation for power undertaking in line with the provisions in section 41(2) of the IT Act, 1961 and these provisions are not applicable for depreciation on WDV basis for block of assets.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

67.

39.6

39

The Committee note that the phrase "directly or indirectly" has been used in Section 43 of the 1961 Act which provides definitions of certain terms relevant to income from profits and gains of business or profession, but has been omitted in the Bill. The Committee thus recommend that the phrase "directly or indirectly" be added in clause 39(1)(d) and 39(5)(b) of the Bill for better clarity. Including it would help preserve the original intent while simplifying the text.

The Committee also recommend that reference made to Income-Tax Act 1961, made in Column C, Sr No. 9 of the Table in Clause 39 be removed and incorporated in Clause 536 which pertains to Repeals and Savings.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

68.

40.4

40

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it is.

69.

41.6

41

The Committee note that in Sr. No. 4 of Column B of Clause 41(1), the current drafting structure where the provision is split into sub-parts (a)(i) and (ii) results in the conditions specified under section 70(1)(c) appearing to apply only to sub-clause (ii). This creates an unintended implication that all transfers from a holding company to its subsidiary fall within the scope of the provision, even if the specific conditions under section 70(1)(c) are not fulfilled. The Committee thus, recommend that Sr. No. 4 in Column B of clause 41(1) be redrafted to avoid misinterpretation and overextension of the intended relief.

The Committee further recommend that sr. no. 4 in column C of 41(1) also be redrafted to align the Bill with current 1961 Act wherein the expression "written down value of block of asset in the immediately preceding previous year as reduced by the depreciation actually allowed in respect of that block of asset in relation to the said previous tax year" has been used, while the Bill uses the expression “at the beginning of the tax year in which such transfer took place”.

The Committee also recommend the removal of bracketed portion "(for the immediately preceding tax year)" in column C of sr. no. 5 of table below clause 41(1) while determining WDV of block of assets for the demerged company for the tax yearto remove any ambiguity.

The Committee also recommend that reference made to Income-Tax Act 1961, made in Column C, Sr No. 2 of the Table in Clause 41 and in 41(4) be removed and incorporated in Clause 536 which pertains to Repeals and Savings.

Apart from the above recommendation(s), the Committee find the clause to be adequate and aligned with the corresponding provisions of the 1961 Act, and therefore accept the clause as it stands, subject to the proposed modifications.

70.

42.6

42

The Committee note that the phrase ‘amount paid in Indian currency’ has been used against ‘B’ and feel that the same is not appropriate and should be replaced with the phrase ‘as expressed in Indian currency’ in clause 42(2) since the asset is acquired in foreign currency, the payment is also in foreign currency. The Committee believe that this will ensure that the Bill is in line with the 1961 Act.

Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modification.

71.

43.4

43

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it is.

72.

44.6

44

The Committee, upon examination, note the need for the word "also" to be incorporated in Clause 44(2)(c) to affirm that deductions include other expenses listed in the remaining sub-clauses, as previously permitted in the Income-Tax Act, 1961, thereby avoiding any potential misinterpretations and thus recommend that the same be added in Clause 44(2)(c).

The Committee further recommend that the phrase “or ICICI Ltd.” be omitted from Clause 44(5)(c)(i), as ICICI Ltd no longer exists, having merged with ICICI Bank Ltd in 2002. Furthermore, the Committee also recommend that use of abbreviations should be avoided in the Bill.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

73.

45.6

45

The Committee note that Clause 45(2)(c) of the Bill, which provides for an additional deduction for in- house R&D expenditure over and above the deduction allowed under Clause 45(1), currently creates doubt regarding this specific intention and thus recommend that Clause 45(2)(c) of the Bill, be redrafted to align it with the desired intent.

Further, with respect to Clause 45(3), the Committee recommend that the same be redrafted so as to clearly specify that “approval of scientific research” is required from the specified authority only in the case of Clause 45(3)(c), and not for Clauses 45(3)(a)

or (b), consistent with the intent of the draft Bill and in line with the Income-Tax Act, 1961.

Regarding Clause 45(11), the Committee recommend that appropriate drafting corrections be made so that the term “land” is defined solely for the purpose of Clause 45(1), rather than for the entire section. This will remove the necessity to separately define “building”, which is currently required because both “land” and “building” have been used interchangeably in this section, while the definition of “building” has not been provided.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

74.

46.6

46

The Committee, upon examination, note that there is a typographical error in cross-referencing in Clause 46(8) and thus recommend that the same be rectified i.e. “138(18) and (23)” may be replaced with "140(8) and (13).”

Further, with regard to 46(9)(b), the Committee recommend that the Clause be redrafted to align it with the provisions of the 1961 Act as the current wordings in the Bill of Sub-section (9) suggest that if the specified asset is used for the period exceeding 8 years then there is a non-compliance, which is not the intention and hence 9(b) should be redrafted as follows: “is used for a purpose other than the specified business during the period specified in clause (a)” and is not chargeable to tax under section 26(2)(k), then the total amount of deduction so claimed and allowed in one or more tax years, as reduced by the amount of depreciation allowable under section 33, as if no deduction under this section was allowed, shall be the income chargeable under the head “Profits and gains of business or profession” of the tax year in which the asset is so used.

The Committee would also like to suggest that the word “Th” may be replaced with the word “The” to remove typographical error in Clause 46(6), Column ‘C’, Sr No. 13.

The Committee also recommend that reference made to Income-Tax Act 1961, made in 46(11)(c) be removed and incorporated in Clause 536 which pertains to Repeals and Savings.

Apart from the above recommendation(s), the Committee find the clause to be adequate and aligned with the corresponding provisions of the 1961 Act, and therefore accept the clause as it stands, subject to the proposed modifications.

75.

47.6

47

To align Clause 47(1) of the Bill with the existing provisions of the Act, the Committee recommend that the phrase “notified as per the guidelines issued by the Board” be replaced with the phrase “notified by the Board in this behalf in accordance with the guidelines as may be prescribed” in Clause 47(1)(b) as the former is prone to different interpretations.

Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modification.

76.

48.6

48

The Committee note that Sub-section (2) is not in line with Para 3(2) of Schedule IX, which provides for taxability only in the case of closure of business and dissolution of firm and not in case of amount withdrawn in case of death of an assessee, partition of HUF and liquidation of company and thus recommend redrafting of the same. The Committee understand that Clause 48(3) taxes cost of certain assets for which deduction was claimed earlier, if asset is sold before a specified period and Rule 5(1) of Schedule IX also provides the same condition as in 48(3). Further, Rule 5(2) provides exception to rule 5(1). The Rule 5(2) of Schedule IX is to be moved to clause 48(3) as the Rule 5(2) provides for exception to provisions of clause 48(3) to bring the Bill in line with the provisions of the Income-Tax Act, 1961.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

77.

49.6

49

Upon examination, the Committee note that there is a need for redrafting of Sub-section (2) as Clause 49(3) taxes cost of certain assets for which deduction was claimed earlier, if asset is sold before a specified period and Rule 5(1) of Schedule X also provides the same condition as in cl. 49(3) and Rule 5(2) provides exception to Rule 5(1). The Committee thus recommend that the sub-rule 5(2) of Schedule X is to be moved to clause 49(3) as the sub-rule 5(2) provides for exception to provisions of clause 49(3).

The Committee further recommend that the words "to be installed in an industrial undertaking for the purpose of business of construction, manufacture or production of any article or thing specified in the list" be used in Rule 3(2) of Schedule X in place of " for constructing, or manufacturing or producing any items listed” to bring the Bill in line with the 1961 Act. The Bill provides that no deduction shall be allowed in respect of any amount utilized for the purchase of any new machinery or plant for constructing, manufacturing or producing any items i.e. the words ‘to be installed in an industrial undertaking for the purposes of business of construction, manufacture or production of any article or thing specified in the list’ is missing and the same needs to be rectified to align the Bill with the Income-Tax Act, 1961.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

78.

50.4

50

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it is.

79.

51.6

51

The Committee, after thorough deliberation and the justification given by the Ministry of Finance find the provisions of the proposed Clause 51 to be acceptable as it is without any modifications.

80.

52.6

52

The Committee note that in Clause 52(b) containing provisions relating to deduction of capital expenditure being right to operate telecommunication services (license fee) and right to use spectrum for telecommunication services, the word ‘license’ is appearing but word ‘spectrum’ is not appearing and thus recommend that the same be added at the appropriate place.

The Committee further recommend that the word "col" is to be provided in the references of the table wherever required to provide clarity to readers as to which Column is being referred to in the table.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

81.

53.6

53

Upon examination, the Committee note that after the phrase “stamp duty” the word “value” is missing and feel that the same is required to be added to ensure that the Bill is in alignment with the Income-Tax Act, 1961 whose objective was consideration for transfer to be less than the value adopted for stamp duty purposes, while the current wording of the Bill points towards the received consideration for transfer to be less than the stamp duty itself which is a small fraction of the stamp duty value adopted. Hence, the Committee recommend that the word “value” be added after the phrase “stamp duty” to rectify the same.

Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to the corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modification.

82.

54.6

54

Upon examination, the Committee note that the term ‘mineral oil’ is already defined in section 66(13) and is an unnecessary repetition in Clause 54 and hence recommend that Clause 54(8) may be deleted. Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modification.

83.

55.6

55

The Committee, after thorough deliberation and the justification given by the Ministry of Finance find the provisions of the proposed Clause 55 to be acceptable as it is without any modifications.

84.

56.6

56

The Committee, after thorough deliberation and the justification given by the Ministry of Finance find the provisions of the proposed Clause 56 to be acceptable as it is without any modifications.

85.

57.6

57

With the objective of enhancing clarity and avoiding potential litigation, the Committee recommend that the language of the Clause be suitably modified. Sub-clause (2) of Clause 57 provides certain exceptions to Sub-clause (1) of the same Clause; however, both sub-clauses currently appear as independent provisions, which may give rise to ambiguity.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

86.

58.6

58

The Committee, upon examination, note that there is a need for Clause 58(2) to be aligned with existing provisions of the Act to remove any ambiguity with respect to clearly defining the turnover (for Business, Profession, Commission Agent) in the Clause and hence, recommend the same. Subsequently, a similar alignment needs to be accordingly done in Clause 62(2) as well.

The Committee further recommend that to avoid any misinterpretation the word "realised" should not be used in column E of Sr. No. 1 of table below clause 58(2) of the Bill as the word ‘realised’ has not been used in the IT Act, 1961. Further, the Committee believe that using the word ‘realised’ would give the impression that percentage should be computed only on amount realised and outstanding amount should not be considered.

The Committee also recommend that the phrase "for every month or part of a month during which the vehicle is owned by the assessee during the tax year" be added in column E of Sr. No. 2 of table below clause 58(2) of the Bill as the current provision in IT Bill, 2025 does not specify Rs. 1,000 is for what period. Hence, the Committee recommend the below wording to convey the correct meaning:

(a) The aggregate of income from goods carriage: —

(i) being a heavy goods vehicle, calculated at the rate of ₹1,000 per ton of gross vehicle weight or unladen weight for each vehicle, for every month or part of a month during which the heavy goods vehicle is owned by the assessee; or

And with regard to introduction of extension for payments in specified modes after the tax year but before the due date for filing of return, the Committee recommend that the phrase "during the tax year or before the due date specified in sub-section (1) of section 263 in respect of that tax year" be added in column E of sr. no. 1 of table below clause 58 to align the Bill with the provisions of 1961 Act to avoid any litigation.

The Committee also recommend changing wordings of Clause 58(1) to reflect that the clause provides for computing profits and is not a charging provision as the Committee feel that current provision of the Clause has become a charging section due to use of the word ‘charged’ and not ‘computed’ as the current section determines the computation of the income.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

87.

59.6

59

The Committee, after thorough deliberation upon the proposals and the justification given by the Ministry of Finance find the provisions of the proposed Clause 59 to be acceptable as it is without any modifications.

88.

60.5

60

The Committee note that in Clause 60(3)(a), the reference to 32(i)(i) is erroneous and hence, recommend that the reference to 32(i)(i) be replaced with the appropriate reference and the Clause be accordingly redrafted. Apart from the above recommendation, the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modification.

89.

61.6

61

The Committee, after thorough deliberation upon the proposals and the justification given by the Ministry of Finance find the provisions of the proposed Clause 61 to be acceptable as it is without any modifications.

90.

62.6

62

The Committee, upon examination, note that Clause 62(1)(c) just repeats the provision already mentioned in 62(4)(b) and thus, recommend that Clause 62(1)(c) be omitted.

The Committee further recommend that in Clause 62(2)(d), the threshold stated as “two lakh and fifty thousand rupees” be replaced with “twenty-five lakh rupees”, since the threshold limit for total sales, turnover, or gross receipts under Section 44AA(2) of the Income-Tax Act, 1961, is twenty-five lakh rupees. Making this correction will align the Bill with the 1961 Act.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

91.

63.6

63

The Committee, upon examination, note that there is a need for redrafting of Clause 63(1) Table Sl. No. 1 as Section 44AB of the Income-Tax Act, 1961, exempts a person whose turnover is less than Rs. 10 crores and whose cash receipts are less than 5% from the requirement of tax audit. However, the provisions proposed in the Bill do not exclude such persons from the ambit of tax audit. Therefore, the Committee feel that redrafting is necessary to align the Bill with the 1961 Act and to remove any ambiguity.

The Committee further recommend modification in Clause 63(2)(b) as non-residents under presumptive scheme are excluded from maintaining books and tax audit compliance as such non-residents are not allowed to claim lower profits than provided in Cl. 61(2) (Table:Sl. No. 6) corresponding to s. 44BBD in IT Act, 1961 and thus there is no requirement of maintaining books of account or getting them audited. The Committee thus recommend that the provision in Cl. 63(2)(b) which mandates audit for such non-residents be accordingly corrected and modified.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

92.

64.6

64

The Committee, upon examination, recommend that Clause 64 be omitted, as it duplicates the provisions of Clause 187, which provides for acceptance of payment through prescribed electronic modes. The Committee believe that omitting Clause 64 and retaining Clause 187 will ensure a more appropriate and coherent flow of content in the Bill.

93.

65.4

65

The Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it is.

94.

66.6

66

The Committee upon examination recommend the following with regard to various sub-clauses of Clause 66:

i) 66(4): may be omitted as there is no mention of word "commodity derivative" in the Bill except for in the clause 66 which is related to interpretation, thus making the term redundant. Hence, the definition as provided in clause 66 be omitted.

ii) 66(15): may be omitted as the reference of National Housing Bank which was in existing section 43D clause (b) of 1961 Act was omitted by the Finance (No. 2), Act, 2024.

iii) 66(28): may be omitted as the term “rent” is not relevant since now the term “any sum payable” is used in section 35(b)(i) of Income-tax Bill, 2025.

iv) 66(35): may be modified to incorporate for the fact that the definition of speculative transaction in the Bill misses the condition wherein eligible transaction is not a speculative transaction where STT and CTT is paid i.e. Section 43(5) of the Income-tax Act, 1961 provided that an eligible transaction in respect of trading in derivatives and commodity derivatives carried out in a recognized stock exchange are not speculative transactions, if STT and CTT have been paid and these exclusions have to be incorporated in the definition of speculative transaction in section 66(35) of the Income-tax Bill, 2025 to align it with the 1961 Act and retain the intent of the same.

v) 66(45): may be omitted as the term “work” is no longer relevant, with the phrase “any sum payable” used in Section 35(b)(i) of the Income-Tax Bill, 2025, rendering this definition redundant.

vi) 66(12) and 66(34): may be redrafted to align the definitions of “micro” and “small” enterprises respectively with the definitions notified in the Micro, Small and Medium Enterprises Development Act, 2006, rather than referring to “as assigned to it in section 2(m)” of that Act. This will bring uniformity in defining “Micro” and “Small” enterprises across both the MSMED Act and the Income-Tax Act, aiding MSMEs in matters related to delayed payments.

Apart from the above recommendation(s), the Committee find the Clause to be adequate and in line with regard to corresponding Section(s) of the 1961 Act and hence accept the Clause as it stands subject to the above proposed modifications.

95.

67.6

67

The Committee note that Clause 67 of the Income-tax Bill, 2025 pertains to capital gains and seeks to provide for the chargeability of Income tax under the head “Capital gains” for various kinds of transfer of capital assets. The Committee also note that Clause 67 of the Bill corresponds to Section 45 of the Income-tax Act, 1961. Further, on examination of the views/suggestions given by various stakeholders and also the justification provided by the Ministry of Finance, the Committee feel that with respect to provisions mentioned in sub-clause (9), the income arising to a partner on transfer of capital asset to a firm etc. may be specifically mentioned to be charged under the head ‘capital gains’. The Committee, therefore, recommend that the said sub-clause may be suitably drafted to address any ambiguity in the provisions thereof.

Further, with respect to the remaining provisions under Clause 67, the Committee observe that they have been textually simplified while retaining the original intent of the corresponding Section of the Act. However, in sub-clause (18), the Committee find a cross reference to old Act of 1961 with respect to the mention of “any amount invested by the assessee in the units referred to in section 80CCB(2) of the Income-tax Act, 1961”. The Committee feel that such cross referencing is a deviation from the clean break intended through this Bill. Therefore, the Committee recommend the Ministry to remove the reference to the old Act of 1961 by clubbing it in the Savings clause coherently and accept the remaining portion of the proposed Clause 67, without any further change.

96.

68.4

68

The Committee note that Clause 68 of the Income-tax Bill 2025 provides for taxation of capital gains arising from the distribution of assets by companies in liquidation and corresponds to Section 46 of the Income-tax Act, 1961. While recognizing the objective of addressing the taxation and value of consideration of money or assets received by an individual in the event of liquidation of a company, the Committee concur with the retention of the original intent and the textual simplification of the provisions under this clause. Therefore, after careful consideration of the proposal and the justifications provided by the Ministry of Finance, the Committee accept the clause as proposed.

97.

69.6

69

The Committee note that Clause 69 of the Income-tax Bill, 2025 provides for taxation on Capital gains on purchase by company of its own shares or other specified securities and corresponds to Section 46A of the Income-tax Act, 1961. After careful consideration of the provisions under this Clause, the Committee are of the opinion that provisions mentioned in sub-clause (1) are not in line with those of the corresponding Section of the Act such that the phrase ‘of other specified securities’ has not been expressly mentioned in respect of the holder acquiring the capital gains. Therefore, in order to ensure alignment of this Clause with the relevant provisions of the corresponding Section in the existing Act, the Committee recommend the insertion of the said phrase in sub-clause (1) and the same may be redrafted to read as :

“69(1) - ….deemed to be “Capital gains” arising to such shareholder or the holder ‘of other specified securities’ in the year…”

The Committee accept the remaining content of Clause 69 as proposed.

98.

70.6

70

The Committee note that Clause 70 of the Income-tax Bill, 2025 corresponds to Section 47 of the Income- tax Act, 1961 and seeks to delineate transactions that shall not be regarded as transfers for the purposes of capital gains taxation under Clause 67. The Committee also note that the intent and substance of the existing law have been retained in the proposed clause, with textual simplification and inclusion of a tabular format for definitions in sub-clause (2) for improved comprehension. After careful examination of the provisions in Clause 70 of the Bill – including the justification provided by the Ministry of Finance and the suggestions received from stakeholders, the Committee find the proposed provisions to be broadly acceptable.

However, on observing that certain drafting refinements are desirable for improved clarity, consistency, and alignment with legislative intent, the Committee, therefore, recommend the following modifications:

1. In Clause 70(1)(a), the phrase “by way of” be inserted before the expression “of distribution of capital assets” to enhance clarity in expression.

2. In Clause 70(1)(l) and Clause 70(1)(m), appropriate redrafting be carried out to clarify that certain provisions of the Companies Act shall not apply in the context of demergers referred to in the said clauses.

3. In Clause 70(1)(zd), (ze), and (zf), the phrase “remain the same” be replaced with “remain as such” to ensure consistency with the terminology used elsewhere in the Act.

4. In the tabular portion under Clause 70(2), the Committee recommend removal of the redundant phrase from the opening portion in Column C corresponding to Sl. No. 1 in Column A, as accepted by the Ministry.

5. The Committee also note that the definition of “relocation” needs to be modified to reflect the amended cut-off date of 31^st March, 2030, as per the Finance Act, 2025, in place of 31^st March, 2025.

Subject to the above modifications, the Committee find the provisions under Clause 70 to be acceptable.

99.

71.6

71

The Committee note that Clause 71 of the Income-tax Bill 2025, corresponding to Section 47A of the Income-tax Act of 1961, provides for withdrawal of exemption in certain cases involving capital gains from transfer of capital assets and defines tax implications concerning situations wherein specified conditions are not met after such transfers. Thorough deliberation of the proposals made with regard to the clause, including the views/suggestions of the stakeholders and the justification provided by the Ministry of Finance point to certain relevant facts. The Committee find that the proposal regarding changing the phrase containing the year of claw back in respect of violations of conditions as mentioned in clause 536(2)(q) from ‘the year in which such conditions are satisfied or not complied with’ to ‘the year in which such transfer took place’ holds good considering that transfers deemed as income chargeable under the head ‘Capital Gains’ must be taxed in the year in which such transfers took place. Therefore, the Committee recommend that clause 536(2)(q) (Repeal and Savings) may be suitably amended in respect of provisions pertaining to Clause 71 and accordingly, changes, if any, may be made in Clause 71 wherever necessary in order to avoid any inconsistency.

Further, for the sake of clarity and to eliminate any scope of misinterpretation, the Committee also desire that the phrase ‘parent company’ featuring in clause 71(1)(b) may be examined and clearly defined by the Ministry of Finance. The Committee approve the rest of the provisions under clause 71 as proposed.

100.

72.5

72

The Committee note that Clause 72 of the Income-tax Bill, 2025 provides for the mode of computation of capital gains and corresponds to Section 48 of the Income-tax Act, 1961. After thoughtful deliberation of the provisions proposed under sub-clause (4)(b), the Committee recommend that for the sake of congruity with the corresponding provision in the parent Act, the phrase “the amount” be changed to “such amount” and the modified provision be read as :

“72(4)(b) – if the transaction of transfer of a unit is not considered as transfer under section 70 and cost of acquisition of such unit is determined under section 73, ‘such amount’ received with respect to such unit before as well as after such transaction, shall be reduced from the cost of acquisition.”

Further, with respect to sub-clause (8), the Committee feel that in order to obtain clarity on the rate of conversion of currencies, the provision as contained in Explanation (ii) of Section 48 of the parent Act, needs to be included within the said Sub-Clause. Therefore, the Committee recommend that the said provision be included in sub-clause (8) as part (d) and the modified provision be read as :

“72(8)(d) - the conversion of Indian currency into foreign currency and the reconversion of foreign currency into Indian currency shall be at the rate of exchange prescribed in this behalf;”.

Subject to the above modifications, the Committee find the provisions under Clause 72 to be acceptable.

101.

73.6

73

The Committee note that Clause 73 of the Income-tax Bill, 2025 provides for the cost of acquisition of the asset with reference to certain modes of acquisition and is synonymous with Section 49 of the Income-tax Act, 1961. On careful examination, the Committee find that within the provision regarding description of the capital asset as contained in Table serial number 4 of sub-clause (1), an erroneous reference has been made to Section 17(2) instead of Section 17(1)(d) which is of relevance in this case as it provides for the value of any specified security or sweat equity shares as mentioned in Table serial number 4.

Therefore, the Committee recommend that the reference be changed from Section 17(2) to Section 17(1)(d) and the modified provision be read as :

“73(1) Table serial number 4 – Capital asset, being specified security or sweat equity shares, referred to in ‘Section 17(1)(d)’”.

Further, regarding provisions relating to the cost of acquisition as contained in column C of Table serial number 15 under sub-clause (1), the Committee find that the absence of a specific mention from which the amount arrived in serial number 14 would be deducted makes the provision incomplete. The Committee feel that insertion of the phrase “the cost of acquisition of such original shares” at the beginning of the provision would accord better clarity and therefore, the Committee recommend that the phrase be suitably inserted and the modified provision be read as :

“73(1) Table serial number 15 column C – ‘the cost of acquisition of such original shares’ as reduced by the amount so arrived at serial number 14”.

Furthermore, the Committee take cognizance of the fact that a cross references has been made to the Income-tax Act of 1961 with regard to specified capital asset mentioned in this clause. The Committee are of the view that such cross referencing to the IT Act, 1961 in the current Bill will necessitate the reference to a repealed Act in future and will make the exercise cumbersome and unsuitable. Thus, the Committee recommend the Ministry to remove any reference to the IT Act, 1961 from the text of specific clauses and instead create relevant provisions in the Savings Clause 536 of the Bill in order to cover all such clauses requiring reference to the IT Act, 1961. Subject to the specified modifications, the Committee find the provisions proposed under Clause 73 to be acceptable.

102.

74.6

74

The Committee note that Clause 74 of the Income-tax Bill, 2025 defines a specific provision for computation of capital gains in case of depreciable assets and corresponds to Section 50 of the Income-tax Act, 1961. Upon careful deliberation of the provisions under sub-clause (1), the Committee note a typographical error in the form of “sub-section (4)” within this sub-clause. Considering the response of the Ministry of Finance in this regard, the Committee recommend that this phrase may be deleted from sub-clause (1) in order to reflect the factually correct position and the said sub-clause may, therefore, be redrafted to read as :

“74(1) - … the provisions of sections 72 and 73 shall be subject to the provisions of sub-sections (2), (3)”.

Further, the Committee observe that while “capital gains” in sub-clause (2) of Clause 74 have been specified to be “arising from the transfer of short-term capital assets”, no such specification has been provided for “capital gains” mentioned under sub-clause (3)(b). Taking into consideration the response of the Ministry in this regard, the Committee feel that consistency in drafting must be ensured within the Clause. Therefore, for the sake of uniformity, the Committee recommend the addition of the phrase “arising from the transfer of short-term capital assets” in sub-clause (3)(b) and the same may be redrafted to read as :

“74(3)(b) - the income received or accruing as a result of such transfer or transfers shall be deemed to be short-term capital gains ‘arising from the transfer of short-term capital assets’.”

Furthermore, the Committee note that with respect to depreciation allowed on capital asset forming part of a block of assets, the provision mentioned under sub-clause (1) has a cross reference to the Income-tax Act, 1961 and also to the Indian Income-tax Act, 1922. The Committee are of the view that such cross referencing to the IT Act of 1961 or 1922 in the current Bill could result in a cumbersome exercise of repeatedly referring to repealed Acts for referencing in future. Thus, to avoid any scope for complications in future, the Committee recommend that any reference to the IT Act, 1961 or 1922 be removed from the text of specific clauses and instead relevant provisions be created within the Savings Clause 536 of the Bill in order to cover all such clauses requiring reference to the IT Act, 1961 or 1922. The Committee accept the remaining provisions under Clause 74 as proposed.

103.

75.6

75

The Committee, after reviewing the provisions proposed under Clause 75, note that this clause relates to a special provision for calculating the capital gains to be taxed in respect of depreciable assets by adjusting the cost of acquisition to account for the depreciated value of the asset. The Committee also observe that while this clause corresponds with Section 50A of the Income-tax Act, 1961, the provisions proposed therein stay true to the content and intent as envisaged under the parent Act. Further, after careful deliberation of the replies and justifications furnished by the Ministry of Finance, the Committee, while expressing satisfaction with the submissions of the Ministry, accept the proposed the clause in entirety.

104.

76.6

76

The Committee note that Clause 76 of the Income-tax Bill, 2025 corresponds to Section 50AA of the Income-tax Act, 1961 and seeks to provide for a special provision for computation of capital gains in case of Market Linked Debenture by way of a defined formula/equation. After careful examination of the provisions contained in this clause, along with the justification provided by the Ministry of Finance and the suggestions received from stakeholders, the Committee find the proposed provisions to be broadly acceptable. Further, while taking note of the textual simplification, the Committee also observe that the intent and substance of the existing law have been retained in the proposed clause.

The Committee, however, observe that certain drafting refinements are desirable for improved clarity, consistency, and alignment with legislative intent. The Committee, therefore, recommend the following modifications :

1. For the purpose of enhanced clarity, within the formula for computation of short term capital gains contained in Clause 76(3), the phrase “in connection with” be inserted within the provision contained under variable ‘C’ and the modified provision be read as :

“C= the expenditure incurred wholly and exclusively ‘in connection with’ such transfer for redemption or maturity”.

2. For making the provision contained in Sub-Clause (4) clearly discernible, the phrase “In computing the income chargeable under the head “Capital gains”,” be inserted and the modified provision be read as :

“76(4) – ‘In computing the income chargeable under the head “Capital gains”’, no deduction shall be allowed for any sum paid as securities transaction tax as per Chapter VII of the Finance (No. 2) Act, 2004.”

Subject to the above modifications, the Committee find the proposed provisions under Clause 76 to be acceptable.

105.

77.6

77

The Committee, after a detailed examination of the provisions proposed under Clause 77 of the Bill, including the representations received from stakeholders and the rationale provided by the Ministry of Finance, observe that the proposed Clause seeks to govern the computation of capital gains in the event of a slump sale. The Committee note that the provisions under Clause 77 largely corresponding to those contained in Section 50B of the Income-Tax Act, 1961, and that the terminology and language have been simplified in the Bill for ease of reference without altering the legislative intent. The Committee observe that the concept of net worth, its computation methodology, and exclusions (such as ignoring revaluation of assets) have also been retained with appropriate clarification. Accordingly, the Committee find that the provisions proposed under Clause 77 are aligned with the objective of providing clarity, consistency, and continuity with the existing legal framework. The Committee, therefore, accept the provisions under Clause 77 as proposed.

106.

78.6

78

The Committee, after thorough deliberation upon the proposal made in Clause 78 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find that the proposed provisions align with the policy objective of simplifying and clarifying the legal framework. The Committee observe that Clause 78 retains the essential features of the corresponding provisions under Section 50C of the Income-Tax Act, 1961. The Committee further note that while the structure and drafting of the provision have been simplified, the substantive content and intent remain unchanged from the existing law. Accordingly, the Committee find that the Clause promotes legal clarity without altering the underlying principles. The Committee, therefore, accept the provisions under Clause 78 as proposed.

107.

79.6

79

The Committee observe that Clause 79 of the Income- tax Bill, 2025 relates to a special provision for full value of consideration for transfer of share other than quoted share and is synonymous with Section 50CA of the Income-tax Act, 1961. After careful examination of the provisions contained in this clause, along with the justification provided by the Ministry of Finance and the suggestions received from stakeholders, the Committee note that though the provision under Sub-Clause (1) has been textually simplified, no reference to Clause 72 is found in the said provision, thereby relinquishing the original legislative intent and giving way to ambiguity and possible litigation. Therefore, the Committee recommend that the language of Sub-Clause (1) be modified to retain the reference to Clause 72 and the provision under Clause 79(1) be suitably amended to stay true to its original intent.

Subject to the above modification, the Committee find the provisions under Clause 79 to be acceptable.

108.

80.6

80

The Committee note that Clause 80 of the Income-tax Bill, 2025 corresponds with Section 50D of the Income-tax Act, 1961 and prescribes that fair market value of the transferred capital asset be deemed to be the full value of consideration for taxation in cases where the same is not ascertainable. After careful consideration of the views/suggestions made by the stakeholders and the justification provided by the Ministry of Finance, the Committee, however, observe that the phrase “cannot be determined” is better suited compared to the revised phrase “unable to be determined” when referring to the gains accruing from the transfer of a capital asset. Therefore, with a view to avoid any scope for ambiguity or future litigations, the Committee recommend that the said phrase be replaced and accordingly, the modified clause be read as :

“80 - If the consideration received or accruing from the transfer of a capital asset is not ascertainable or ‘cannot be determined’, its fair market value on the date of transfer shall be deemed as the full value of consideration received or accruing as a result of the transfer for the purposes of computing income under the head “Capital gains”.”

109.

81.6

81

The Committee note that Clause 81 of the Income-tax Bill, 2025 provides for advance money received regarding the transfer of a capital asset and corresponds to Section 51 of the Income-tax Act, 1961. After a detailed examination of the provisions proposed under Clause 81 of the Bill, including the representations received from stakeholders and the rationale provided by the Ministry of Finance, the Committee observe that the proposed Clause seeks to define the structure for dealing with advance payments received during negotiations for transfer of a capital asset. The Committee also note that in the provisions contained under this Clause, the terminology and language have been simplified for ease of reference without altering the legislative intent. Further, the Committee observe that the provisions proposed under this Clause seek to prevent tax avoidance by providing an unambiguous framework for the treatment of advance money received as capital gains during transfer of capital asset and have also been retained with appropriate clarification. Accordingly, the Committee find that the provisions proposed under Clause 81 are aligned with the objective of providing clarity, consistency, and continuity with the existing legal framework. The Committee, therefore, accept the provisions under Clause 81 as proposed.

110.

82.6

82

The Committee, after careful consideration of the proposal contained in Clause 82 under examination, including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance, find the proposed provisions to be appropriate. The Committee, noting the Ministry’s justification, observe that Clause 82 corresponds to Section 54 of the Income-Tax Act, 1961, and that the drafting has been simplified without altering the substantive scope or legislative intent of the existing provision. Accordingly, the Committee accept the Clause as proposed.

111.

83.6

83

The Committee note that Clause 83 of the Income-tax Bill, 2025 corresponds to Section 54B of the Income- tax Act, 1961 and provides for exemption of capital gains from being taxed in certain cases regarding transfer of land used for agricultural purposes. The Committee also understand that this clause introduces a structure where capital gains accrued from the transfer of agricultural land are not immediately taxed if these are reinvested in new agricultural land within a specified period of time. Further, after careful deliberation of the views/suggestions give by stakeholders and the justification provided by the Ministry of Finance, the Committee concur with the retention of the original intent and the textual simplification of the provisions and therefore, accept the clause as proposed.

112.

84.6

84

The Committee, after careful consideration of the provisions contained in Clause 84 of the Income-tax Bill, 2025 under examination, including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance, find the proposed provisions to be appropriate. While noting the justifications provided by the Ministry of Finance, the Committee also observe that Clause 84 corresponds to Section 54D of the Income-Tax Act, 1961, and that the drafting of the provisions under this Clause has been simplified without altering the substantive scope or legislative intent of the existing provision. Accordingly, the Committee accept the provisions under Clause 84 as proposed.

113.

85.6

85

While noting that Clause 85 of the Income-tax Bill, 2025 pertains to non-chargeable capital gains accrued from investment in certain specific bonds, the Committee also recognize that exemptions offered under this clause are aimed at encouraging investments in specified financial instruments and intended for providing financial stability. Further, the Committee observe that the provisions proposed under this clause are synonymous with Section 54EC of the Income-tax Act, 1961. Furthermore, after thoughtful deliberation of the views / suggestions made by the stakeholders, the Committee express satisfaction with the response and justifications provided by the Ministry of Finance and therefore, accept the clause as proposed in its entirety.

114.

86.6

86

The Committee note that Clause 86 of the Income-tax Bill, 2025 relates to non-chargeability of capital gains in specific scenarios of investment in residential house and is synonymous with Section 54F of the Income-tax Act, 1961. After carefully examining the suggestions made by stakeholders and the justification and the response of the Ministry of Finance, the Committee note that the content and intent of the proposed clause do not deviate from the core as envisioned under Section 54F of the parent Act and therefore accept the said clause as proposed.

115.

87.5

87

While noting that Clause 87 of the Income-tax Bill, 2025 provides for exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area, the Committee also recognize that this clause is aimed at encouraging decongestion of urban areas through tax exemptions and corresponds to Section 54G of the Income-tax Act, 1961. After thoughtful deliberation of the proposal and justifications provided by the Ministry of Finance, the Committee concur with the retention of the original intent in this clause along with the textual simplification of its provisions in this Bill and therefore, accept the clause as proposed.

116.

88.5

88

The Committee, after thorough scrutiny of proposed Clause 88 pertaining to exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone, find that it is aimed at encouraging relocations of industrial undertakings for fostering economic growth in Special Economic Zones and is synonymous with Section 54GA of the Income-tax Act, 1961. The Committee also note that the content of the clause does not deviate from its core and retains the spirit envisaged under Section 54GA of the IT Act. After careful consideration of the proposal and justifications provided by the Ministry of Finance, the Committee express satisfaction with the response of the Ministry in this regard and therefore, accept the clause as proposed.

117.

89.4

89

The Committee, after reviewing the provisions proposed under Clause 89 understand that this clause seeks to extend the time available to taxpayers for reinvesting capital gains in cases where the original asset is compulsorily acquired and compensation to the assessee is delayed. The Committee also find that the proposed clause does not alter the content and intent introduced vide Section 54H of the Income-tax Act, 1961. Further, after careful deliberations of the replies and justifications furnished by the Ministry of Finance, the Committee, while expressing satisfaction with the submissions of the Ministry, accept the proposed clause in entirety.

118.

90.6

90

The Committee note that Clause 90 of the Income-tax Bill, 2025 provides for meaning of the terms “adjusted”, “cost of improvement” and “cost of acquisition” with respect to calculation of capital gains and corresponds to Section 55 of the Income- tax Act, 1961. The Committee also note that while Section 55(2)(ab) of the parent Act specifically provides for transfers to be considered as cost of acquisition or full value of consideration for the purpose of taxation, the clause lacks in such specifications, thereby intensifying the possibilities of ambiguity or litigation. Therefore, after careful deliberation of relevant views/suggestions given by the stakeholders and the response of the Ministry of Finance, the Committee recommend that for the purpose of providing clarity in the computation of capital gains, provisions similar to Section 55(2)(ab) of the parent Act may be inserted in Clause 90 and the clause may be suitably amended to include the provision for cost of acquisition.

The Committee further note that in sub-clause (4)(b), with respect to deduction on account of depreciation of a capital asset, a reference has been made to the Income-tax Act, 1961. The Committee are of the view that such cross referencing to the IT Act of 1961 in the current Bill could result in a cumbersome exercise of repeatedly referring to repealed Act for referencing in future. Thus, to avoid any scope for complications in future, the Committee recommend that any reference to the IT Act, 1961 be removed from the text of specific clauses and instead relevant provisions be created within the Savings Clause 536 of the Bill in order to cover all such clauses requiring reference to the IT Act, 1961.

Expressing satisfaction with the response and justifications of the Ministry of Finance, the Committee accept the remaining provisions under this clause as proposed.

119.

91.4

91

The Committee, after thorough scrutiny of the proposed Clause 91 pertaining to the reference of capital asset to Valuation Officer for assessment of fair market value of the said asset, find that it is synonymous with Section 55A of the Income-tax Act that was invented with the objective of conferring powers on the Assessing Officer to revaluate the capital asset and bring it to fair valuation. Noting that the content and intent of the proposed clause do not deviate from the core as envisioned under Section 55A of the Income-tax Act, the Committee express satisfaction with the justification and response of the Ministry of Finance and therefore accept the clause as proposed.

120.

92.6

92

The Committee note that Clause 92 of the Income-tax Bill, 2025 pertains to taxation of income accrued from other sources and corresponds to Section 56 of the Income-tax Act, 1961. Upon thoughtful deliberation of the provisions under this clause, the Committee observe that in sub-clause (3)(f) an incorrect reference to Clause 355(i) - “relative”, in relation to an individual, has been made instead of a reference to Clause 355(h) – “related persons” in relation to non- profit organizations. The Committee, therefore recommend that in sub-clause (3)(f) the reference to Clause 355(i) be changed to Clause 355(h) and accordingly, the modified provision be read as :

“92(3)(f) - from or by any registered non-profit organisation as defined in section 355(g), except when received by any person referred to in section 355(h);”.

Further, with regard to the provisions contained in sub-clause (5)(g) sub-point (E), the Committee note that the phrase “maternal as well as paternal” not being expressly mentioned in respect of “lineal ascendant” makes this provision open to ambiguity, thus making way for litigations. Therefore, for the sake of clarity, the Committee recommend that suitable changes be made in sub-clause(5)(g) and the modified provision be read as :

“92(5)(g)(E) - any lineal ascendant “(maternal as well as paternal)” or descendant (maternal as well as paternal);”.

Further, after careful consideration of the views/suggestions of the stakeholders, the Committee express satisfaction with the justification and response of the Ministry of Finance thereto, and therefore, accept the remaining provisions under Clause 92 as proposed.

121.

93.6

93

The Committee note that Clause 93 of the Income-tax Bill, 2025 provides for deductions for eligible expenses for computing the taxable income under the head “Income from other sources” and corresponds to Section 57 of the Income-tax Act, 1961. After careful deliberation of the provisions under the clause, the Committee find an erratum in the provision contained in sub-clause (1)(a) wherein the square bracket enclosing the phrase “excluding those referred to in section 2(40)(f)” has not been closed. Therefore, the Committee recommend that the typographical error be corrected and the provision be modified to read as :

“93(1)(a) – for dividends ‘[excluding those referred to in section 2(40)(f)]’…”.

Further, after careful examination of the justification provided by the Ministry of Finance, the Committee express satisfaction with the response of the Ministry and accept the remaining provisions as proposed.

122.

94.4

94

The Committee note that Clause 94 of the Income-tax Bill, 2025 provides for enumeration of deductions that are not allowable to be set off against incomes obtained from other sources, as referred to in clause 92. The Committee also understand that this clause is synonymous with Section 58 of the Income-tax Act, 1961 and aims at correct computation and charging of taxable income, thereby improving tax compliance by the assessee. After careful deliberation of the proposal and justifications provided by the Ministry of Finance, the Committee express satisfaction with the response of the Ministry and accept the clause as proposed.

123.

95.4

95

After reviewing the provisions proposed under Clause 95, the Committee understand that this clause, while being synonymous with Section 59 of the Income-tax Act, 1961, seeks to propose that any benefit in cash or otherwise obtained on account of remission or cessation of any liability, for which a deduction has been allowed in an earlier year, shall be taxable in the year in which the benefit has been obtained. While recognizing the objective of making any profitable income of an assessee chargeable to tax, the Committee concur with the retention of the original intent and the textual simplification of the provisions under this clause. Therefore, after careful consideration of the proposal and justifications provided by the Ministry of Finance, the Committee accept the clause as proposed.

124.

96.6

96

The Committee find that the proposed clause corresponds to section 60 of the Act. The Ministry has stated that redundant provisions have been removed; however, the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

125.

97.6

97

The Committee, after examining the clause, recommend that the word ‘and’ in the beginning of the Clause 97(2)(b) be omitted as use of words ‘or’ and ‘and’ together leads to ambiguity and makes the language incoherent. The Committee note that the proposed clause corresponds to Sections 61 and 62 of the existing Act. The provisions of these existing sections have been textually simplified while retaining the same intent in this clause. The Committee, therefore, accept the provisions of the clause, subject to the aforementioned drafting correction.

126.

98.5

98

The Committee note that the proposed clause corresponds to section 63 of the existing Act and is a textual simplification of those in the existing Act, retaining the same intent. The Committee, therefore, accept the clause as proposed.

127.

99.6

99

The Committee note that Clause 99 corresponds to Section 64 of the existing Act. A formula has been introduced in sub-clause (2), aligning with Explanation 3 of Section 64, to enhance clarity and ensure certainty in computation. The substance of the existing provisions has been retained, while the language has been simplified to preserve the original intent and facilitate ease of understanding. The Committee, however, observe that in doing so, certain drafting errors have crept in, which require rectification to avoid ambiguity. Therefore, the Committee recommend the following drafting corrections in provisions of clause:

(i) 99(1)(a)(i): the word ‘not exclude’ shall be replaced by ‘not include’ as it has converse meaning.

(ii) 99(2): in place of ‘as on the day for which A is being computed’ it shall be changed to ‘as on the first day of the tax year’ to make it same as given in part ‘C’.

(iii) 99(5)(a): shall begin with the following reference: “(a) for sub-section (1)(a)(i),–– ” instead of “(a) for sub-section (1)(a)” to make it specific and to avoid any ambiguity.

(iv) 99(5)(b): the reference to sub-section (1)(d) shall be changed to sub-section (1)(c) as there is no (1)d in the proposed clause.

The Committee, with the above-mentioned drafting corrections, accept the clause as proposed.

128.

100.4

100

The Committee note that the proposed clause corresponds to section 65 of the existing Act. The provisions of the existing sections have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

129.

101.4

101

After examining the clause, the Committee find that it corresponds to Section 66 of the Act, incorporating textual simplification of the provisions in the existing Act while retaining the same intent, and therefore accept the clause as proposed.

130.

102.6

102

The Committee note that the proposed clause corresponds to Section 68 of the existing Act. In Clause 102 of the Bill, the substance of the provision remains unchanged, except that the heading has been revised from Cash Credits to Unexplained Credits. The language of the existing section has been simplified for clarity, while retaining its original intent. The Committee, therefore, accept the clause as proposed.

131.

103.6

103

The Committee note the clause 103 corresponds to section 69 and 69B of the Act. Section 69B has been split into two parts and the relevant part has been merged with sec 69 of the Act. The provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

132.

104.6

104

The Committee, after examining the provisions of the clause, recommend that in Clause 104(1), the phrase 'where the asset is found recorded' be deleted, as its removal would eliminate redundancy and improve clarity. Apart from this change, the Committee accept the clause as proposed as the provisions of the existing sections have been textually simplified and retained with their original intent.

133.

105.6

105

After examining and deliberation upon the proposed clause, the Committee find that it corresponds to Section 69C of the Act, and that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

134.

106.6

106

After examining the clause and considering the views of the stakeholders, the Committee recommend to delete the bracketed phrase ‘(including interest thereof)’ as it does not convey the intended meaning, and recommend redrafting the provision accordingly for clarity.

The Committee also note that Clause 106 of the Bill corresponds to Section 69D of the existing Act and seeks to provide for the taxability of any amount borrowed or repaid through instruments such as hundis. To rationalize the provision, the scope has been expanded beyond hundis to include other negotiable instruments. While the substantive intent remains unchanged, the language has been simplified. The Committee, therefore, accept the clause as proposed, subject to their suggested drafting correction.

135.

107.6

107

The Committee note that Clause 107 of the Bill seeks to provide that income referred to in clauses 102, 103, 104, 105 and 106 shall be charged to tax as per the provisions of clause 195. They further note that Clause 107 of the Bill has no corresponding section in the Act. The Committee have been apprised that in order to reduce disputes on rate of taxation and to provide certainty, the reference of the section specifying the rates of taxation has been provided in this Chapter itself. Also, the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

136.

108.6

108

The Committee find that the clause 108 corresponds to section 70 of the Act. The Committee have been apprised that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

137.

109.6

109

The Committee find that Clause 109 of the Bill provides for set off of losses under any other head of income in the manner provided therein. The clause corresponds to section 71 of the Act. Further, redundant provision has been removed. The provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

138.

110.6

110

After examining the clause and considering the suggestions of the stakeholder, the Committee recommend that the reference to clause 107 in clause 110(3) to be rectified to clause 109 as clause 107 does not deal with set off and carry forward of losses. Apart from this drafting correction, the Committee accepts the clause as proposed, as it constitutes a textual simplification of the provisions in the existing Act while retaining the same intent.

139.

111.6

111

The Committee note that the clause corresponds to section 74 of the Act. The provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

140.

112.6

112

The Committee, after examining the clause and considering the views/suggestions of the experts/stakeholders, recommend that the phrase “(other than loss from speculation business)” in clause 112(1) shall be deleted, as clause 112(4) already excludes speculation losses from the definition of ‘unabsorbed business loss’. Apart from this drafting correction, the Committee accept the proposed clause, as it is a textual simplification of the existing provisions with the same intent.

141.

113.6

113

The Committee, after examining the clause and considering the views/suggestions of the experts/stakeholders, recommend to replace the phrase “computed from” with “computed in respect of” in clause 113(1) for greater precision and consistency. This aligns the language with Sub-Clause (5)(b), which already uses the phrase “computed in respect of” to define unabsorbed speculation business loss, thereby ensuring uniformity and avoiding interpretational ambiguity. Apart from this drafting correction, the Committee accept the clause as proposed, as it is a textual simplification of the existing provisions with the same intent.

142.

114.6

114

The Committee, after examining the clause and considering the views/suggestions of the experts/stakeholders, recommend that the phrase “computed from” in clause 114(1) be replaced with “computed in respect of”. This change will ensure consistency with clause 114(3)(b), which already uses the phrase “computed in respect of” while defining “unabsorbed loss from the specified business.” Apart from this drafting correction, the Committee accept the clause as proposed, as it is a textual simplification of the existing provisions with the same intent.

143.

115.6

115

The Committee note that Clause 115 of the Bill seeks to provide for set off and carry forward of losses from specified activity. Also, the clause defines ‘Specified activity’ as the activity of owning and maintaining race horses. The clause corresponds to section 74A of the Act. However, for better clarity, definition of ‘race horse’ has been provided in the clause. The provisions of the existing section have been simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

144.

116.6

116

The Committee find that the clause corresponds to section 72A of the Act. The clause also clarifies that accumulated loss of the predecessor entity which is deemed to be the loss of the successor entity can be carried forward for not more than eight tax years immediately succeeding the tax year for which such loss was first computed for the original predecessor entity. The Committee have been apprised that this is a provision which was part of the Finance Act, 2025. Further, the provisions of the existing section have been simplified and retained with the same intent in this clause. The Committee, therefore, accept the proposed clause.

145.

117.4

117

The Committee note that the clause 117 corresponds to section 72AA of the Act. The clause also clarifies that accumulated loss of the predecessor entity which is deemed to be the loss of the successor entity can be carried forward for not more than eight tax years immediately succeeding the tax year for which such loss was first computed for the original predecessor entity. It has been stated by the Ministry that this is a provision which was part of the Finance Act, 2025. The provisions of the existing section have been simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

146.

118.6

118

The Committee, after examining the clause and considering the views/suggestions of the experts/stakeholders, recommend that in Clause 118(4)(ii), the word ‘to’ following ‘before’ be deleted.

The Committee also observe that the clause corresponds to section 72AB of the Act. The clause also clarifies that accumulated loss can be carried forward only up to eight tax years immediately succeeding the tax year in which such loss was first computed in the hands of the predecessor-in- business. This is a provision which was part of the Finance Act, 2025. The provisions of the existing section have been simplified and retained with the same intent in this clause. The Committee, except the above-mentioned drafting correction, accept the clause as proposed.

147.

119.6

119

The Committee after examining the clause and considering the views/ suggestions of the experts/ stakeholders, recommend the following:

(i) The word “if” at the beginning of clause 119(3)(a), shall be deleted as it is syntactically redundant in light of the conditional structure already established in the main clause.

(ii) The provision shall be suitably amended to allow carry forward and set-off of losses where the shareholding pattern, though altered temporarily, is restored in subsequent years and the 51% continuity requirement is met thereafter. This would preserve the legislative intent of preventing misuse while ensuring fair treatment for companies whose shareholders remain ultimately liable to tax.

(iii) The drafting of clause 119(3) shall be aligned with Section 79 of the Act to remove any ambiguity regarding the newly used term “beneficial owner” as the same is not defined in the clause.

Apart from the above recommended drafting corrections, the Committee accept the clause as proposed, as it constitutes a textual simplification and merger of Sections 78 and 79 of the Act while retaining the same intent.

148.

120.4

120

The Committee, after examining the clause, find that clause 120 of the Bill seeks to provide that no set off of loss or unabsorbed depreciation shall be allowed against undisclosed income, consequent to search, requisition and survey. The clause corresponds to section 79A of the Act. The Committee have been given to understand that to remove ambiguity and ensure clarity with respect to the definition of undisclosed income, reference is now made to the meaning assigned to it in clause 301 of the Bill. The provisions of the existing section have been simplified and retained with the same intent in this clause. The Committee, therefore, accept the clause as proposed.

149.

121.4

121

The Committee find that Clause 121 corresponds to Section 80 of the existing Act. The provisions have been simplified for clarity while retaining their original intent. The Committee, therefore, accepts the clause as proposed.

150.

122.6

122

The thorough examination of the proposed Clause 122 of the IT Bill 2025, pertaining to the deductions to be made in computing total income vis-à-vis Section 80 A under Chapter VI A of IT Act, 1961 reveals that barring the typographical error in naming the corresponding Section in the proposed IT Bill, 2025 as Clause 121, instead of Clause 122, the soul and intent of the comparable sections are same without any deviation. The proposed Clause 122 of the IT Bill, 2025 sticks to the laid down Statement of Object and Reasons of the Bill and provides more clarity and simplification to the language of the Bill. Thus, the Committee, while also considering the justification provided by the Ministry of Finance for the proposed Clause, accept the proposed Clause 122 in its entirety and recommend the Ministry to rectify the Sl. No. as 122 instead of 121.

151.

123.6

123

The Committee note that Clause 123 of the Income- Tax Bill, 2025 provides for deduction for life insurance premia, deferred annuity, contributions to provident fund, etc and corresponds to Section 80C of the Income-Tax Act, 1961. It is the major repository of benefits to the taxpayers in terms of investment avenues. The provision not only encourages savings but also promotes financial security. It is also noteworthy to mention here that there is a seamless migration of the contents from the erstwhile Section 80C to the Clause 123 of IT Bill, 2025 in terms of scope and deduction limits. The major difference lies only in the aspect that the conditions for claiming deductions have been outlined in Schedule XV instead of the body of the Section, as earlier. The justification given by the Ministry is also found to be satisfactory. Therefore, keeping in view the preservation of the soul of the Section 80C in the proposed Clause 123, the Committee accept Clause 123 as proposed by the Ministry and recommend no change.

152.

124.6

124

The Committee scrutinized the proposed Clause 124, pertaining to deduction in respect of employer contribution to pension scheme of Central Government and find that there is a transportation of the contents from Section 80 CCD of the IT Act, 1961 to the present Bill without any obvious attempt to deviate from the intent of the Section, as also cited by the justification provided by the Ministry. However, the absence of the phrase “by such individual” in sub section (3) creates an ambiguity which could lead to interpretational issues at later stages. Hence, the Committee recommend for the addition of the phrase “by such individual” in the proposed Clause, sub section (3), which may now be read as under:-

(3) An assessee referred to in sub-section (1), or any other assessee, being an individual, shall be allowed a deduction in computation of his total income of the whole of the amount paid or deposited by suchindividual in the tax year in his account under a pension scheme notified or as notified by the Central Government, which shall not exceed fifty thousand rupees.

The Committee further recommend to modify the heading of the proposed Clause suitably to incorporate the employee contribution also in an appropriate manner as brought about by the amendment cited by the Committee to the proposed Clause. The Committee further accept the remaining provisions of the Clause 124 as proposed.

153.

125.5

125

The Committee, after going through the provision regarding Agnipath Scheme, note that the proposed Clause 125 does not alter the content and intent introduced vide Section 80 CCH of the Income-Tax Act, 1961 while carrying forward to the Income-Tax Bill, 2025. Further, the Committee also went through the replies of the Ministry and the justification provided by them for the proposed Clause. Having found the submissions of the Ministry satisfactory in nature, the Committee accept the proposed Clause 125 of the Income-Tax Bill, 2025 in entirety.

154.

126.4

126

The Committee examined the provisions proposed through Clause 126 of the Income-Tax Bill, 2025 regarding the deductions allowed for health insurance premia and found that the Ministry have not tinkered with the erstwhile Section 80D of the IT Act, 1961, but have brought forward the provisions with textual simplification. Hence, the Committee, keeping in view the justification provided by the Ministry accept the Clause as proposed.

155.

127.6

127

The Committee take into account the details of the Clause 127 pertaining to the deduction in respect of maintenance including medical treatment of a dependant who is a person with disability vis-à-vis Section 80DD of IT Act, 1961 and find no substantial change in the contents. The Committee are satisfied with rest of the contents and the justification provided by the Ministry for the proposed Clause and recommend no further change in the Clause 127 of the IT Bill, 2025.

156.

128.6

128

The Committee examined the provisions pertaining to the deductions in respect of Medical treatment under the erstwhile Section 80DDB proposed through Clause 128 of the Income-Tax Bill, 2025 and find it to be parallel in nature without any change in the substance of the earlier Section. The Committee, therefore, keeping in view the justification provided by the Ministry, accept the provisions of the Clause as proposed in entirety without any amendment.

157.

129.6

129

The Committee, while examining the provision proposed under Clause 129 of the Income-Tax Bill, 2025 pertaining to the deduction in respect of interest on loan taken for higher education find that the contents of the said Clause are similar to Section 80E of the Income-Tax Act, 1961. The Committee also take cognizance of the apprehension raised by the Stakeholder, regarding the eligibility for deduction u/s 129 of the Income-Tax Bill, 2025 only for the balance tax years out of the seven assessment/tax years and note that the same has already been taken care of in view of the Savings Clause 536 of the IT Bill, 2025. However, the Committee find the mention of the “provisions of section 10(23C) of the Income-tax Act, 1961, or an institution referred to in section 80G(2)(a) of the said Act” in Clause 129(3) a deviation from the clean break aimed at, by making a cross reference of old Act, 1961 in the body of the new Bill. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 by clubbing it in the Savings clause coherently and accept the remaining portion of the proposed Clause 129 without any further change.

158.

130.5

130

The Committee note that the proposed Clause 130 of the Income-Tax Bill, 2025 pertaining to the deduction in respect of interest on loan taken for residential house property is similar to the Section 80 EE of the Income-Tax Act, 1961 in terms of the content and no deviation is to be noticed. Thus, the Committee, in view of the justification provided by the Ministry for bringing the proposed Clause, accept the Clause 130 as proposed and recommend no amendment.

159.

131.5

131

The Committee observe that the proposed Clause 131 of the Income-Tax Bill, 2025 provides for deduction in respect of interest on loan taken for certain house property in case of an individual to whom clause 130 is not applicable. The text of the Clause is similar to the Section 80 EEA of the Income-Tax Act, 1961 in terms of the content and there is no deviation from the soul of the Section. Thus, the Committee, in view of the justification provided by the Ministry, accept Clause 131 as proposed and recommend no amendment.

160.

132.6

132

The Committee note that the proposed Clause 132 corresponds to the Section 80 EEB of the Act, wherein deduction on interest payable on loan taken from any financial institution for the purpose of purchase of an electric vehicle has been provisioned. However, the loan needs to be sanctioned by the financial institution during the period beginning on the 1st day of April, 2019 and ending on the 31st day of March, 2023. The Committee find that the provision under Section 80 EEB has been migrated to the proposed Bill without any alteration. Thus, the Committee, satisfied with the justification provide by the Ministry, accept the proposed Clause in entirety without amendment.

161.

133.6

133

During the examination of the proposed Clause 133 pertaining to the deduction in respect of donations to certain funds, charitable institutions, etc. the Committee observe that the text of the proposed clause was differently worded as compared to the parallel Section 80G of the IT Act, 1961. While the first reference in the Clause to adjusted grosstotal income is comprehendible, the subsequent contextual reference is to gross total income. The absence of the word can lead to higher deductions, belying the intent of the Clause. The Ministry, when queried upon, realized the inadvertent omission and were amenable to the correction. Thus, the Committee recommend the Ministry to rephrase the mention of gross total income to adjusted gross totalincome in 133(2) so as to rectify an omission causing an unintended higher tax liability. The Committee, further accept the remaining contents of the proposed Clause.

162.

134.5

134

On studying the details of the proposed clause 134 provisioning for deductions in respect of rent paid vis-à-vis the corresponding Section 80 GG of the IT Act, 1961, the Committee notice that there is only a transportation of the content from the present IT Act, 1961 to the proposed Bill, 2025 without any material change altering the sentiments of the Section. The Committee also went through the justification provided by the Ministry for the proposed Clause and found it satisfactory. Therefore, the Committee accept the proposed Clause 134 in entirety without any amendment.

163.

135.5

135

The Committee, after thorough scrutiny of the proposed Clause 135 pertaining to the deduction in respect of certain donations for scientific research or rural development find that it is synonymous to the Section 80 GGA of the IT Act, 1961. The content of the clause does not deviate from its core and retains its spirit as under Section 80 GGA of the IT Act, 1961. The Committee is also satisfied with the justification and response elicited from the Ministry in this regard. Therefore, the Committee accept the clause as proposed.

164.

136.5

136

The Committee note that the poposed Clause 136 that provides for deduction in respect of contributions given by companies to political parties is similar to Section 80 GGB of the IT Act, 1961 in terms of the content and intent elicited. No substantial change has been brought about, instead it is a carrying forward of the parallel provision to the IT Bill, 2025. In view of this situation and considering the satisfactory justification provided by the Ministry for the proposed Clause, the Committee accept the proposed Clause in its entirety.

165.

137.5

137

The Proposed Clause 137 of the Income-Tax Bill, 2025 that pertains to deduction in respect of contributions given by any person to political parties resonate with the Section 80 GGC of the Income-Tax Act, 1961. The Committee find a mere shifting of the content without any changes in terms of policy matters from the scrutiny of the parent Act and the IT Bill, 2025 under consideration. Thus, the Committee, keeping in view the objectives of the Bill to provide simplification in the language and the satisfactory justification provided by the Ministry, accept the proposed Clause in entirety.

166.

138.6

138

The Committee note that Clause 138 of the Bill pertains to the provisions of deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.. While the Clause corresponds to Section 80-IA of the Act, it is noticeable that the provisions of this section have a sunset clause and a reference to the IT Act, 1961 is also made here. The Committee take cognizance of the fact that the benefit period of these provisions are nearing their end and no new assesses are being added as justification for the cross-reference to the IT Act, 1961. Still, the Committee are of the view that the cross referencing to the IT Act, 1961 in the current Bill will necessitate the reference to a repealed Act in future and will make the exercise cumbersome and not in the fitness of things. The Committee, further, are in consonance with the other aspects of the proposed Clause which does in no way alter the content of the Section 80-IA of the IT Act, 1961. Thus, the Committee, recommend the Ministry to remove the reference to the IT Act, 1961 from the text of specific Clauses and instead create some provision in the Savings Clause 536 of the Bill which can cover all such clauses requiring reference to the IT Act, 1961. Besides, the Committee agree with the remaining content of the proposed Clause.

167.

139.6

139

The Committee note that Clause 139 of the Bill provisions for deductions in respect of profits and gains by an undertaking or enterprise engaged in development of Special Economic Zone. The clause corresponds to Section 80-IAB of the Act. It is noticeable that the provisions of this section have a sunset clause and many changes have been made over the years. There is a limited period left for the claim of deductions under these sections. These are used by a few numbers of assessees. Further, no new assessee can claim these deductions. The Ministry have considered these factors for making a reference to the IT Act, 1961 in the Bill. The Committee take into account the fact that the benefit period of these provisions are nearing their end and no new assesses are being added as justification for the cross-reference to the IT Act, 1961. However, the Committee are still of the view that the cross referencing to the IT Act, 1961 in the current Bill will create a cumbersome exercise of looking back into a repealed Act for referencing in future also. The Committee, further, are in agreement with the other aspects of the proposed Clause which does in no way alter the content of the Section 80-IAB of the IT Act, 1961. Thus, the Committee, recommend the Ministry to remove the reference to the IT Act, 1961 from the text of specific Clauses and instead create some provision in the Savings Clause 536 of the Bill which can cover all such clauses requiring reference to the IT Act, 1961. Besides, the Committee agrees with the remaining content of the proposed Clause.

168.

140.6

140

The Committee find that Clause 140 of the Bill provisions for deduction to eligible start up in respect of profits and gains of eligible businesses akin to the Section 80-IAC of the Income-Tax Act, 1961. Examination of the said Clause vis-à-vis Section 80- IAC reveals that the Section has been textually simplified and retained with the same intent in this clause without carrying out any substantive nature of modification in terms of policy change. Thus, the Committee, finding the justification provided by the Ministry satisfactory, accept the proposed Clause 140 in entirety.

169.

141.6

141

The Committee note that Clause 141 of the Bill stipulates for deduction in respect of profits and gains from certain industrial undertakings and provides for deduction for industrial undertakings in North-eastern region and also in respect of undertakings promoting housing projects. The clause is similar to Section 80-IB of the Act. From the replies of the Ministry, the Committee find that the provisions of this section have a sunset clause and many changes have been made over the years. The concluding date is nearing and as such there is a limited period left for the claim of deductions under these sections. Further, no new assessee can claim these deductions. Considering these factors, a reference to the IT Act, 1961 is made for these provisions in the Bill. The Committee take into consideration the justifications provided by the Ministry for keeping the cross-reference to the IT Act, 1961. Still, the Committee observe that the cross referencing to the IT Act, 1961 in the current Bill does not suit to a neat reading, making it unappealing to refer back to a repealed Act for having a full grasp of the section in future. The Committee, however, find the other aspects of the proposed Clause not altering the content of the Section 80-IB of the IT Act, 1961. Thus, the Committee, recommend the Ministry to remove the reference to the IT Act, 1961 from the text of specific Clauses and instead create some provision in the Savings Clause 536 of the Bill which can cover all such clauses requiring reference to the IT Act, 1961. The Committee agrees with the remaining content of the proposed Clause and make no recommendation for any modification.

170.

142.6

142

The Committee take into note the deductions in respect of profits and gains from housing projects provided to the assessee through the proposed Clause 142, erstwhile Section 80-IBA of the IT Act, 1961. Further, it has been observed that other than simplification of language to make the bill concise and easy to comprehend, no substantial alteration has been proposed in the Income-Tax Bill, 2025. As in few earlier cases too, here also, the Committee observe that the benefit period of these provisions are nearing their end and no new assesses are being added as justification given by the Ministry for the cross-reference to the IT Act, 1961. However, the Committee maintain their view that the cross referencing to the IT Act, 1961 in the current Bill is not called for and provision may be further simplified by doing away with the referencing to IT Act, 1961. Hence, the Committee, recommend the Ministry to remove the reference to the IT Act, 1961 from the text of the proposed Clause 142 also and instead create some provision in the Savings Clause 536 of the Bill which can cover all such clauses requiring reference to the IT Act, 1961. The Committee also take into consideration the suggestion of the stakeholder for providing the computation mechanism itself in the Clause, but find the justification provided by the Ministry being satisfactory in nature for not doing so. Thus, the Committee, does not recommend any further change and accept the remaining content of the proposed Clause.

171.

143.5

143

The Committee examined the proposed Clause 143 in the Income-Tax Bill, 2025 and the corresponding Section 80-IE of the Income-Tax Act, 1961 and find that although there is no substantive change in the content of the proposed Clause 143 which provides for special provisions in respect of profits and gains of certain undertakings with respect to production of eligible article or things in North-Eastern States, there is usage of “ending with the 1st April, 2017” in 143 (2), which creates ambiguity over the end date, whether it includes 1^st April, 2017 also. Being pointed out, the Ministry have admitted it as drafting correction and should be read as “ending before the 1st April, 2017” instead. The Committee also take note of the reference to IT Act, 1961 and, as earlier, recommend the Ministry to remove the reference to the IT Act, 1961 from the body of the Clause to Savings Clause of the Bill alongwith the correction of end date to “ending before the 1st April, 2017” in 143 (2). Further, in view of the foregoing that only simplification of remaining text is elicited in the Clause 143, and the satisfactory justification of the Ministry, the Committee accept the other content of the proposed Clause 143 in entirety.

172.

144.6

144

The Committee note that Clause144 of the Bill provides for deduction in respect of profits and gains of newly established units in Special Economic Zones and that the Clause corresponds to Section 10AA of the IT Act, 1961. The provisions of this section have a sunset clause. The Committee find that the Ministry contend that there is a limited period left for the claim of deductions under these sections. These are used by a few numbers of assesses and further, no new assesse can claim these deductions. Considering these factors, a reference to the IT Act, 1961 is made for these provisions in the Bill. The Committee take into consideration, the justification for the cross- reference to the IT Act, 1961. Still, the Committee believe that the cross referencing to the IT Act, 1961 in the current Bill may be done away with, so that the reader of the new Act is not burdened to look back into a repealed Act for referencing. Thus, the Committee, recommend the Ministry to remove the reference to the IT Act, 1961 from the text of specific Clauses and keep it in the Savings Clause 536 of the Bill. The Committee, further, agree with the remaining content of the proposed Clause and does not recommend any change.

173.

145.5

145

On the examination of the proposed Clause 145 of the Bill, the Committee note that the Clause seeks to provide for deduction for businesses engaged in collecting and processing of bio-degradable waste, which was provisioned in Section 80JJA of the Income-Tax Act, 1961. However, clause 145 mentions “biological agents”, with the omission of the term “other” as had been used in the Section 80 JJA of IT Act, 1961. In this context, the Committee on seeking clarification from the Ministry on the need for narrowing the definition now, and if the word “other” encouraged innovation through the scientific creativity and its omission would have a discouraging effect on the R&D sector of Life Sciences, the Ministry accepted it as a drafting correction. Barring this, there has been no substantive change in the content of the Clause as compared to the earlier Section other than textual simplification and there is retention of the same intent in this clause, as evinced from the justification provided by the Ministry also. Thus, the Committee, while recommending the addition of the term “other” in 145 (1)(b) as previously used in the IT Act, 1961 accept the remaining proposed Clause.

174.

146.6

146

The examination of the proposed Clause 146 of the Bill reveals that it provides for deduction in respect of additional employee cost in certain cases for specified period and that the clause corresponds to Section 80JJAA of the Act. The Committee find that only the provision of the existing section has been textually simplified and has been retained with the same intent in this clause. However, the Committee note the response of the Ministry to the suggestion for enhancing the value of emoluments per employee to avail 80JJAA being satisfactory as it has been contended by the Ministry that the deduction itself has been made available to increase employment of low-wage persons and it is also a budget-related matter. In view of the foregoing, the Committee appreciate the rationale behind the approach of the Ministry as sound enough and hence accept the proposed Clause in its entirety without any alteration.

175.

147.6

147

The Committee, while scrutinizing the proposed clause 147 of the IT Bill, 2025 pertaining to the deductions for income of Offshore Banking Units and Units of International Financial Services Centre, find it to be a parallel provision of Section 80 LA of the Income-Tax Act, 1961. There is no marked difference in the contents and is primarily an exercise of simplification of texts. However, an incorrect referencing to 147 (3) itself, instead of 147 (1) to ascertain the nature of income referred to in 147 (1) is revealed. On seeking the views of the Ministry, the inadvertent drafting error was accepted. Hence, the Committee recommend the Ministry to rectify the drafting error in 147(3) to 147(1). The Committee accept the remaining provisions of the proposed Clause147 without any amendment.

176.

148.6

148

The Committee observe that the proposed Clause 148 pertaining to the deduction in respect of certain inter- corporate dividends is similar to the Section 80M of the IT Act, 1961. The contents of the Section have been textually carried forward to the IT Bill, 2025. It was further noted that an integral omission of the reference to Clause 148 (Section 80M in the Act) is to be included in Clause 200(1)(a)(ii) to maintain the uniformity of the carrying forward of the contents and to synchronise with the stance of no policy change proposed in the Bill. The Ministry on being enquired upon ceded to the omission by attributing to drafting error. Therefore, the Committee while accepting the other contents of the Clause 148, recommend the Ministry to incorporate the reference to Clause 148 in Clause 200 (1)(a)(ii) so that the benefit of deduction for inter-corporate dividend under section 148 of the ITB (corresponding to section 80M of the Act) in respect of companies opting for CTR of 22% is reinstated.

177.

149.4

149

The examination of the proposed Clause 149 of the Bill with regard to the deduction in respect of income of co-operative societies revealed the fact before the Committee that there was only textual simplification as compared to the corresponding Section 80 P of the IT Act, 1961. No changes are proposed in the content or the intent of the provision. Considering these aspects alongwith the satisfactory justification provided by the Ministry, the Committee accept the proposed Clause 149 of the Bill in its entirety. However, the Committee, find that there is a reference to IT Act, 1961 in 149(4) and as earlier, for a clean break, the Committee recommend the Ministry to remove the reference to the IT Act, 1961 from the text of specific Clause and instead create some provision in the Savings Clause 536 of the Bill.

178.

150.6

150

The Committee examined the proposed Clause 150 pertaining to the deduction in respect of certain income of Producer Companies and find that barring a typographical error in the last line of Clause 150 (3) wherein 3013 is written instead of 2013, no material changes can be observed while comparing the proposed clause to its repository, Section 80 PA of the IT Act, 1961. The Ministry have accepted this as a typographical error which is to be corrected. Keeping this in view, alongwith the satisfactory justification of the Ministry, the Committee accept the proposed Clause.

179.

151.5

151

The Committee find from the examination of Clause 151 of the Bill that it provides for deduction in respect of royalty income, etc., of authors of certain books other than text-books. The proposed clause corresponds to Section 80QQB of the IT Act, 1961. Having gone through the justification provided by the Ministry and the satisfactory response of the Ministry to the query associated with the change in the capping for claiming deduction against the royalty, the Committee are of the opinion that the provision of the existing section has been textually simplified and retained with the same intent in this clause. Hence, the Committee accept the proposed clause in its entirety.

180.

152.6

152

The Committee note that Clause 152 of the Bill is parallel to the Section 80RRB of the IT Act, 1961 and provides for deduction in respect of royalty on patents. While the provision of the existing section has been textually simplified and retained with the same intent in this clause, the Committee, further note the absence of a limiting provision of deduction in respect of royalty on patents in terms of not to be claimed again once deduction already claimed for same income, under any provision in any tax year, as had been earlier provided for with the provisions of 80RRB (4) in the IT Act, 1961. The Ministry addressed this omission and are amenable to carry out the Drafting correction. Thus, the Committee recommend the Ministry to carry out suitable correction in the Clause 152 and incorporate the limiting provision of availing the deduction only once for the same income in a tax year. Besides, the Committee are satisfied with the other contents of the proposed Clause.

181.

153.5

153

The Committee after going through the contents of the Clause 153 and the parallel Section 80TTA and section 80TTB of the Act find that Clause 153 of the Bill provides for certain deduction for interest on savings account deposits (excluding time deposits) for individuals and Hindu undivided families. There is literal transportation without any substantial change and the provision of the existing section has only been textually simplified and retained with the same intent in this clause. Thus, the Committee, finding the justification of the Ministry for the proposed Clause satisfactory, accept the proposed Clause 153 in its entirety.

182.

154.6

154

The Committee note that the proposed Clause 154 of IT Bill, 2025 is similar to Section 80U of the 1961 Act provisioning for deduction in case of a person with disability and to provide for deduction for an individual resident who is certified by a medical authority as a person with disability or severe disability. The Committee find uniformity between the proposed clause and Section 80U of the 1961 Act and is satisfied with the textual simplification. Therefore, the Committee, keeping in view, the justification provide by the Ministry accept the proposed Clause 154 in entirety.

183.

155.4

155

The Committee find that the proposed Clause 155 associated with the Rebate to be allowed in computing income-tax is similar in intent to the Section 87 of the IT Act, 1961. There is no substantial change barring the simplification of the text. Moreover, the Committee are also satisfied with the justification and reply of the Ministry regarding this Clause and, thus, accept the proposed Clause 155 in its entirety.

184.

156.6

156

The Committee, on thorough examination of the Clause 156 of the Bill find that it seeks to provide for rebate of income-tax in case of certain individuals as provided under Section 87A of the Act. Other than textual simplification of the existing section, there is retention of the same intent in this clause. However, a closer look has brought to fore, presumably a drafting error in 156 (2)(b) which is read as “(b) the income exceeds twelve lakh rupees, the income tax payable on the total income reduced by total income which is in excess of twelve lakh rupees”. The Committee understand that it is a deviation from the intent which can give rise to various interpretations causing unintended anomalies. Therefore, the Committee, while agreeing with the other provisions of the Clause 156, recommend the Ministry to amend 156 (2) (b) of the Clause to be read as under:-

“the total income exceeds twelve lakh rupees and the income-tax payable on such total income exceeds the amount by which the total income is in excess of twelve lakh rupees, an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds twelve lakh rupees”.

185.

157.6

157

The Committee find that Clause 157 of the Bill pertains to the provisions for claiming relief when salary, etc. is paid in arrears or in advance. This is parallel to the content and intent of the Section 89 of the Act. Textual simplification is visible here. Thus, the Committee, keeping under consideration the justification provided by the Ministry accept the proposed Clause 157 without any further changes.

186.

158.6

158

The Committee note that the proposed Clause 158 of the Bill seeks to provide for relief from taxation in income from retirement benefit account maintained in a notified country. While, the clause corresponds to Section 89A of the Act and the provision of the existing section has been textually simplified and possibly retained with the same intent in this clause as justified by the Ministry, the Committee find a few key omissions which can lead to uncalled anomalies at interpretational stages. The omission of in the manner and in a tax year from the long line proposed in Clause 158 (1) brings in room for ambiguity. Being highlighted, the Ministry agreed to this drafting correction. So, the Committee recommend the long line of Clause 158 (1) to be read as under:-

"The income accrued to a specified person in a specified account shall be taxed in the manner and in a tax year, as prescribed,"

Further, the phrase "the income from which" instead of "which" may be added in Clause 158 (2), 3^rd line to provide clarity and consistency with the Act.

Barring these changes, the Committee find other provisions of the Clause 158 acceptable.

187.

159.6

159

The Committee scrutinized the proposed Clause 159 thoroughly and find that it provides for agreement with foreign countries or specified territories and adoption by the Central Government of agreement between specified associations for double taxation relief. It also seeks to provide for double taxation relief where the Central Government has entered into an agreement with other countries. The clause corresponds to section 90 and 90A of the Act. The two sections 90 and 90A of the Act have been merged. Although, the provisions of the existing sections have been textually simplified and retained with the same intent in this clause, the Committee find an addition in the new proposed Clause which states that If any term is used in the agreement and is not defined in the agreement or in the Bill or in any notification, it will have the meaning given in any Act of the Central Government relating to taxes, or in its absence, in any other law of the Central Government, and such meaning will be applicable from the date of the agreement. The Committee take note of this addition and have also examined the replies of the Ministry in this regard. Subsequently, the Committee find that it is clarificatory in nature which further augments India’s position in such agreements. It will also reduce litigation and provide certainty to how any term is interpreted in a tax treaty situation. Thus, the Committee, agree with the justification provided by the Ministry for such addition to the erstwhile Section of the IT Act, 1961 and appreciate the intent of this Clause in its simplification, while accepting the proposed Clause 159 in its entirety.

188.

160.6

160

The Committee note that the proposed clause 160 is similar to the Section 91 of the IT Act, 1961 which provides for deduction from the Indian income-tax payable by a person who has paid tax outside India in a country with which no agreement exists in respect of his income which accrued or arose during that tax year outside India. The Committee further find that other than textual simplification, no material changes have been carried out in the proposed Clause vis-à- vis Section 91 of the IT Act, 1961. Therefore, the Committee, finding the justification provided by the Ministry for this Clause satisfactory in nature, accept the proposed Clause in entirety.

189.

161.6

161

The Committee observe that Clause 161 of the Bill provides for computation of income from international transaction and specified domestic transaction having regard to arm’s length price. The clause corresponds to section 92 of the IT Act, 1961 and has an important role in the avoidance of tax. The Committee further find the justification and reply of the Ministry in assuaging the concern of the stakeholder pertaining to the computation for block period pricing being satisfactory in nature. Further, the provisions of the existing section have been textually simplified and retained with the same intent in this clause, so the Committee accept the proposed Clause 161 in its entirety.

190.

162.6

162

On scrutinizing the proposed Clause 162 of the Bill which seeks to define the expression “associated enterprise” and corresponds to section 92A of the Act, the Committee find that the words “for the purposes of sub-section (1)” are replaced with the words “Without affecting the generality of the provisions of sub-section (1)”in sub-clause (2) of the proposed Clause 162 of the Bill. This alteration has attracted a number of suggestions raising concerns for future litigation. The Committee went through the merit of each argument closely and took into consideration the different point of views. The Committee examined the detailed reply of the Ministry in this regard wherein it has been contended that there is an ambiguity in interplay of sub-section (1) and (2) of section 92A in view of words “for the purposes of sub-section (1)” appearing in the beginning of sub-section (1) in the IT Act, 1961. In order to remove the ambiguity and give intended interpretation, the change is made to reflect the intent that clause 162(1) is general definition of associated enterprise and clause 162(2) provides for specific circumstances where two entities will be considered as associated enterprise. It can be seen that with the altered language proposed in the Clause 162, there is a possible interpretation that the condition for being an associated enterprise is fulfilled by meeting the conditions under 162 (2) or 162 (1) independently and that the two sub-sections have become mutually exclusive. The discussion with the Ministry on this aspect enlightened the Committee that the intent behind the change was to reduce litigation and bring in more clarity. However, the Committee are of the opinion that reinstating the earlier phrase “for the purposes of sub-section (1)” in sub-clause (2) of the proposed Clause 162 of the Bill in the place of “Without affecting the generality of the provisions of sub-section (1)”, would serve the intent of defining Associated Enterprises in a better way, as earlier in the IT Act, 1961. Thus, the Committee, recommend the Ministry to reinstate the position of the proposed Clause 162 in consonance with the Section 92A of the IT Act, 1961 vis-à-vis the reinstatement of the earlier phrase “for the purposes of sub-section (1)” in the opening line of sub-clause (2) of the proposed Clause 162 of the Bill in the place of proposed phrase “Without affecting the generality of the provisions of sub-section (1)”.

191.

163.6

163

The Committee, having examined the contents of proposed Clause 163 of the Bill pertaining to the meaning of international transaction, alongwith the corresponding Section 92B of the IT Act, 1961, find that there is content migration from the earlier section to the current Bill. Other than textual simplification, nothing more has been disturbed. The Committee also find the justification of the Ministry against the suggestions of the stakeholders cogent and sound enough, adding clarity to the text in defining the expression “international transaction”. Therefore, the Committee, accept the proposed clause 163 without any changes.

192.

164.6

164

The Committee find that Clause 164 of the Bill seeks to define the expression “specified domestic transaction”. The clause corresponds to section 92BA of the Act. However, the scrutiny of the text reveal that there is a incorrect reference in Clause 164 (e) to 205 (4). The actual reference should be to 205 (5) since section 205(5) refers to the transaction between the related enterprises that requires the amount of profits to be determined having regard to arm’s length. On pointing to the Ministry, it has been identified to be a drafting error. Therefore, the Committee, other than recommending the Ministry to carry out the change of reference in clause 164 (e) from 205(4) to 205(5), find the provisions of the existing section to be a textual simplification and accept the proposed Clause.

193.

165.6

165

The Committee observe that Clause 165 of the Bill provides for determination of arm’s length price and the methods for determining the arm’s length price. The provisions and text of the clause corresponds to section 92C of the IT Act, 1961. During the examination, the Committee note that in Clause 165 (4) there is a reference to any information and document relating to an international transaction or specified domestic transaction that has not been kept and maintained by the assessee as per Clause 168(1). However, the Committee find that Clause 171(1) refers to the maintenance, and keeping of information and documents in respect of the transaction entered into. This appears to be an inadvertent error in referencing and needs correction. This anomaly was pointed to the Ministry and subsequently it has been identified as a drafting error which may be corrected by reference to 171(1) in clause 165(4). Thus, the Committee recommend the Ministry to rectify this drafting error and reflect the correct reference to Clause 171(1) in 165 (4) in place of 168 (1) and further accept the remaining portion of the proposed clause in the wake of textual simplification and retention of the same intent.

194.

166.6

166

The Committee after going through the details of the proposed Clause 166 of the Bill find that it provides for reference of cases by the Assessing Officer to the Transfer Pricing Officer for determining the arm’s length price. The clause corresponds to section 92CA of the IT Act, 1961. No substantial change has been noticed and the proposed clause elicits streamlining and simplification. The Committee, therefore, keeping the justification provided by the Ministry, being satisfactory in nature, accept the proposed clause in its entirety without further recommendation.

195.

167.6

167

The Committee while examining Clause 167 of the Bill note that it provides for power of Board to make safe harbour rules to simplify compliance and reduce litigation. The clause corresponds to section 92CB of the Act. The Committee note from the replies that the Ministry, taking into account the importance of safe harbour rules have suggested for consultation with the industries before the notification of the same. The Committee acknowledge the stance of the Ministry and opine that the justification of the Ministry is satisfactory regarding the proposed Clause and considering that no substantial changes have been brought about, concur with the simplification and accept the proposed clause in its entirety.

196.

168.6

168

The Committee note that Clause 168 of the Bill provides for advance pricing agreement (APA) between the taxpayer and the tax authorities to pre- determine the arm’s length price for specified transactions. While the Clause corresponds to section 92CC of the Act, the Committee find that the provision for closure of proceedings as per prescribed rules have clearly been specified in the Bill to provide for certainty for the APA procedure. The Committee agree with the minor alteration brought about to simplify the comprehension of the text and provision. Hence, the Committee accept the proposed clause without any further changes.

197.

169.5

169

The Committee find Clause 169 of the Bill providing for giving effect to advance pricing agreement entered into by an assessee and consequential procedures. Other than the textual simplification in the body of text and migration of existing modalities in Section 92CD of the IT Act, 1961 to the proposed clause, there is no finding of any substantial changes to the existing Act. Thus, considering the satisfactory justification provided by the Ministry, the Committee accept the proposed Clause in its entirety.

198.

170.6

170

The Committee note the importance of Clause 170 of the Bill which provides for secondary adjustment in certain cases to ensure that the actual allocation of profits between the associated enterprises aligns with the arm’s length price. The Committee find that the clause corresponds to section 92CE of the Act and the contents of the proposed Clause is a textually simplified version of the corresponding Section 92CE of IT Act, 1961 without any policy change. Considering the sound justification provided by the Ministry to be satisfactory in nature, the Committee, accept the proposed Clause in its entirety without any further changes.

199.

171.4

171

Clause 171 of the Bill provides for maintenance, keeping and furnishing of information and document by certain persons and documents by entities involved in international or specified domestic transactions. The Committee on examining this clause find that it corresponds to section 92D of the IT Act, 1961 and that no changes have been caused to the intent of the Section. The Committee find the justification and reply of the Ministry pertaining to this Clause satisfactory and accept the proposed Clause in its entirety without any change.

200.

172.6

172

The Committee note that the proposed Clause 172 of the Bill provides for report from an accountant to be furnished by persons entering into international transaction or specified domestic transaction and that the clause corresponds to section 92E of the IT Act, 1961. The Committee find the underlying objective of the Section being untouched and the rationale provided by the Ministry regarding the suggestions, also satisfactory in nature, in terms of no policy change being effected here. Keeping this in view the Committee accept the proposed Clause with the textual simplification.

201.

173.6

173

Proposed Clause 173 of the Bill provides for definitions of certain terms relevant to determination of arm’s length price. The committee, while examining this important Clause did not find any material changes/alteration in the text of this Clause corresponding to section 92F of the IT Act, 1961. Finding the reply and justification provided by the Ministry cogent for carrying no policy changes and only simplification of text had been carried out, the Committee accept the proposed Clause in its entirety.

202.

174.5

174

The Committee find during examination that the proposed Clause 174 of the Bill provides for avoidance of income-tax by transactions resulting in transfer of income to non-residents. This clause corresponds to section 93 of the IT Act, 1961 both in terms of content and intent. Moreover, the justification provided by the Ministry is also found to be satisfactory in nature. Keeping this in mind and appreciating the textual simplification carried out, the Committee accept the proposed Clause in its entirety.

203.

175.6

175

The Committee, while examining the Clause 175 of the Bill which provides for avoidance of tax by certain transactions in securities find that it corresponds to section 94 of the IT Act, 1961 and that the term ‘mutual fund or Administrator of the specified undertaking or the specified company’ has been stated to be as referred to in Explanation to section 10(35) of the Income-Tax Act, 1961. The Committee opine that the definition could have been produced in the text itself without any reference to the IT Act, 1961. The Ministry, in this regard have treated this as a drafting error which shall be referenced as “note 6(a) and (g) below Schedule XV”. In view of the indicated change, the Committee recommend the Ministry to rectify the drafting error and make a correct referencing as indicated. The content of rest of the proposed Clause 175 is accepted.

204.

176.5

176

The Committee scrutinised the proposed Clause 176 of the Bill which provisions for special measures in respect of transactions with persons located in notified jurisdictional area. Noting the importance of this clause in terms of establishing accountability, the Committee went through the justification provided by the Ministry and found that the clause corresponds to section 94A of the Income-Tax Act, 1961. Observing that the provisions of the existing section have been textually simplified and retained with the same intent in this proposed Clause, the Committee accept the Clause as proposed.

205.

177.6

177

The Committee note that Clause 177 of the Bill seeks to provide for limitation on interest deduction in certain cases and is synonymous to Section 94B of the IT Act, 1961. The Committee find the justification for proposing the text in this Clause satisfactory and are also convinced with the response of the Ministry vis-à-vis the suggestions from the stakeholders. Other than textual simplification in the body of text, the intent of the original source, Section 94B of IT Act, 1961 has not been tinkered with. Thus, the Committee accept the proposed Clause in its entirety without any changes.

206.

178.5

178

After careful consideration of the proposal and the justifications provided by the Ministry of Finance, the Committee concur with the retention and textual simplification of Section 95 of the Income-Tax Act, 1961, as proposed under Clause 178 of the Income-Tax Bill, 2025.Accordingly, the Committee accept the clause as proposed.

207.

179.5

179

The Committee, after thorough deliberation upon the proposal made in Clause 179 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find that the proposed provisions effectively simplify and retain the principle of “impermissible avoidance arrangement” in the Income-Tax Bill, 2025. The Clause specifies that an arrangement may be treated as impermissible if its main purpose is to obtain a tax benefit and it

(a) creates rights or obligations not ordinarily created in transactions at arm’s length;

(b) results in the misuse or abuse of the provisions of the Act;

(c) lacks commercial substance; or

(d) is entered into by means not ordinarily employed for bona fide purposes.

Furthermore, a presumption is provided that the main purpose of an arrangement or a part of it is to obtain a tax benefit, unless proved otherwise by the assessee. The Committee find these provisions appropriate for addressing aggressive tax avoidance while preserving fairness and equity in the application of the income tax law. Therefore, the Committee accept the provisions as proposed.

208.

180.5

180

The Committee, after careful consideration of the proposal contained in Clause 180, along with the justification provided by the Ministry of Finance, find the proposed provision to be appropriate. The Committee observe that Clause 180 corresponds to the provisions relating to impermissible avoidance arrangements under the General Anti-Avoidance Rule in the Income-Tax Act, 1961, and that the language has been refined to provide greater clarity without altering the substantive intent. Accordingly, the Committee accept the provisions of clause 180 as proposed.

209.

181.6

181

The Committee examined Clause 181 of the Bill, which seeks to provide for the consequences of an impermissible avoidance arrangement under the General Anti-Avoidance Rules. The Committee note that this largely corresponds to Section 98 of the Income-Tax Act, 1961, and that the provisions have been simplified in the Bill while retaining their original intent.

The Committee also considered submissions from several stakeholders who expressed reservations about removing the phrase “in the circumstances of the case,” which had served as a safeguard to ensure that the application of GAAR remained reasonable and sensitive to the specific context. Recognizing the merit of this concern, the Committee are of the view that while deterrence against tax avoidance must remain robust, it must also be tempered with procedural fairness and contextual sensitivity. The Committee, therefore, accept the provisions under Clause 181 with the modification that the words “in the circumstances of the case” shall be expressly reinstated to clarify that the consequences of impermissible avoidance arrangements will be determined having regard to the specific facts and context of each case. This addition will ensure that the determination of consequences under GAAR will continue to be guided by the specific facts and context of each case, thereby preserving the balance between effective enforcement and taxpayer protection.

210.

182.4

182

The Committee, after careful consideration of the provisions contained in Clause 182, along with the justification provided by the Ministry of Finance, find the proposed provision to be appropriate. The Committee observe that Clause 182 corresponds to Section 99 of the Income-Tax Act, 1961, and that the language has been simplified without altering the substantive intent. Accordingly, the Committee accept the provisions under clause 182 as proposed.

211.

183.6

183

The Committee, after thorough deliberation upon the provisions made in the Clause under examination, including the views/suggestions of the stakeholders and the justification given by the Ministry and note that Clause 183 seeks to provide for the applicability of General Anti- Avoidance Rule. The clause corresponds to Section 100 and Section 101 of the Income- Tax Act, 1961. The Ministry explained in its justification that these two sections have been merged and the provisions of the existing sections have been textually simplified while retaining the same intent in this clause.

The Committee are of the view that the proposed modifications to be acceptable; however, the Committee observe that the phrase “shall apply” is missing in the first line of the clause 183, which may clarity of its application. To provide ease of reading and to convey its intended meaning more accurately, the Committee recommend that the first line of the sentence be amended to “The provisions of this Chapter shall apply —

(a) in addition to, or in lieu of, any other basis for determination of tax liability;

(b) as per such guidelines and subject to such conditions, as prescribed.”

Therefore, the Committee accept the proposed provisions under Clause 183 subject to the above modification.

212.

184.5

184

The Committee, after thorough deliberation upon the proposal made in Clause 184 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find that the proposed provisions align with the policy objective of simplifying and clarifying the legal framework. The Committee note that the provisions proposed under Clause 184 of the Bill provide for definitions of various terms used in this Chapter. The Committee note that the Clause defines terms such as “accommodating party”, “arrangement”, “asset”, “benefit”, “connected person”, “fund”, “party”, “relative”, “step”, “tax benefit” and “tax treaty”. The Committee further observe that these definitions largely correspond to Section 102 of the Income-Tax Act, 1961, and that the provisions have been simplified in the Bill while retaining their original intent.The Committee therefore accept the provisions under Clause 184 as it is.

213.

185.6

185

The Committee, after thorough deliberation upon the proposal made in Clause 185 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find that the proposed provisions are acceptable. The Committee note that Clause 185 seeks to provide for the mode of taking or accepting certain loans, deposits, and specified sums. The clause corresponds to Section 269SS of the Income-Tax Act, 1961. The Ministry clarified in its justification that there is no policy change and the provisions of the existing section have been textually simplified while retaining the same intent in this clause. The Committee accept the provisions under Clause 185 with the modification that the word ‘of’ be deleted inClause 185(1) (iii) to align the drafting with legislative norms.

Therefore, the Committee recommend that the clause be written as follows:

“185(1)(iii) the aggregate of the amounts referred to in clauses (i) and (ii),is twenty thousand rupees or more.”

214.

186.5

186

The Committee, after thorough deliberation upon the proposal made in Clause 186 under examination, including justification given by the Ministry of Finance, find that the proposed provisions are acceptable. The Committee note that Clause 186 corresponds to Section 269ST of the Income-Tax Act, 1961, and the provisions have been textually simplified while retaining their original intent. Accordingly, the Committee accept the clause as it stands.

215.

187.6

187

The Committee, after thorough deliberation upon the proposal made in Clause 187 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions to be acceptable; however, the Committee are of the opinion that the word “profession” should be added after “business” in clause (a) to provide greater clarity in its application. Furthermore, this change will provide professionals with total receipts exceeding ₹50 crore in a year the facility of prescribed electronic modes of payment. Therefore, the Committee accept the provisions under Clause 187 subject to the following modification:

The clause be written as:

“Every person shall provide facility for accepting payment, through electronic modes as prescribed, in addition to other electronic modes, if any, being provided by him, where —

(a) such person is carrying on business or profession; and.

216.

188.6

188

The Committee, after thorough deliberation upon the proposal made in Clause 188 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable; however, the Committee observe that certain modifications are desirable for greater clarity and precision in its application.

The Committee recommend to replace the word“paid” with “repaid” in clause (4) (a) in view of the context that the clause pertains to the repayment of a deposit or a loan. Furthermore, the Committee is of the view that adding the words “specified advances”in the section heading will help clarify its coverage. Therefore, the Committee accept the proposed provisions under Clause 188 subject to the following modifications:

The section be amended to replace ‘paid’ with ‘repaid’ in clause (4) (a).

The section heading of the Section be amended to read:

“Mode of repayment of certain loans, deposits and specified advances”.

217.

189.6

189

The Committee, after thorough deliberation upon the proposal made in Clause 189 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable; however, the Committee observes that the term “co- operative bank” is used in clauses 185(2), 186(2), and 188(1) /(2) of the Bill, but it has not been defined in Clause 189. To bring greater clarity and consistency to the provisions of this Chapter and to align them with related provisions, the Committee consider it appropriate to insert a definition of “co- operative bank” in Clause 189. This will help avoid ambiguity, facilitate uniform and effective application of the provisions, and provide greater legal certainty and guidance to all stakeholders concerned. Therefore, the Committee accept the proposal under Clause 189 subject to the following modification:

The following sub-clause shall be added in Clause 189:

“(e) ‘"Cooperative bank", “primary agricultural credit society”, and “primary cooperative agricultural and rural development bank” shall have the meanings respectively assigned to them in section 149(6).

218.

190.4

190

The Committee, having examined the provisions under clause 190, agree with the Ministry’s view and find the simplified text to be clear, appropriate, and consistent with the policy objective of granting a deduction from income tax where total income includes income on which no tax is payable. Accordingly, the Committee accept the clause as proposed.

219.

191.4

191

The Committee considered the view of the Ministry of Finance that Clause 191 textually simplifies Section 111 while retaining its original intent and application. The Committee, having examined the provisions, agree with the Ministry’s view and find the simplified text to be clear, appropriate, and consistent with the policy objective of taxing the accumulated balance of a recognised provident fund in cases where exemption conditions are not met.Accordingly, the Committee accept the provisions under clause 191 as proposed.

220.

192.4

192

The Committee, after thorough examination, accept Clause 192 as effectively retaining the policy intent of Section 113 while simplifying its language. Accordingly, the Committee accept the clause as proposed.

221.

193.6

193

The Committee, after careful examination of the proposed Clause 193 — along with stakeholder inputs and submissions from the Ministry of Finance — recognize that the clause aims to retain and simplify the existing tax provisions concerning income from Global Depository Receipts (GDRs) purchased in foreign currency or capital gains arising from their transfer. The Committee welcome the improved clarity brought by the tabular presentation of tax rates. Accordingly, the Committee accept the clause as proposed.

222.

194.6

194

The Committee, after thorough deliberation on the provisions contained in Clause 194, including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance, noted that Clause 194 primarily consolidates and rationalises existing provisions previously scattered across Sections 115B, 115BB, 115BBF, 115BBG, 115BBH, and 115BBJ of the Income-Tax Act, 1961, into a single, simplified clause. The Ministry explained that while the provisions have been textually simplified, their underlying policy intent has been preserved. Additionally, definitions that were earlier dispersed across multiple sections have now been incorporated into sub-clause (2) of Clause 194 to improve clarity and facilitate easier application. Further, the Committee identified an inadvertent drafting error in Clause 194(2)(d), which presently defines “horse race” by reference to Section 115. To avoid ambiguity, the Committee recommend amending Clause 194(2)(d) to instead refer to the definition provided in Section 94(6) of the Bill. This modification will clarify the intended meaning of “horse race” within the context of this Clause and help prevent any confusion during its application. Accordingly the Committee accept the clause as proposed, subject to the above-mentioned modifications.

223.

195.4

195

The Committee, after thorough deliberation upon the proposal made in Clause 195, including the views and suggestions of stakeholders and the submission made by the Ministry of Finance, took note that this clause largely consolidates and rationalises existing provisions — previously contained in Section 115BBE of the Income-Tax Act, 1961 — into a single, simplified framework.The Committee note that the main objective of this consolidation is to provide greater clarity and ease of application while retaining the policy intent of deterring transactions routed through undisclosed sources of income. Accordingly, the Committee accept the provisions under Clause 195 as proposed.

224.

196.4

196

After careful consideration of the proposed provision under Clause 196 and the justifications provided by the Ministry of Finance, the Committee concur with the retention and textual simplification of Section 111A of the Income-Tax Act, 1961, as proposed under Clause 196 of the Income-Tax Bill, 2025. The Committee acknowledge that the proposed amendment preserves the taxation of short-term capital gains in case of a transfer of short-term capital asset, being an equity share in a company or a unit of an equity-oriented fund or a unit of a business trust subject to certain conditions.Accordingly, the Committee accept the provisions under clause 196 as proposed.

225.

197.6

197

The Committee, after thorough deliberation on the proposal set out in Clause 197 — including the views and suggestions of stakeholders and submissions from the Ministry of Finance — observes that this clause largely consolidates and rationalises the existing provisions previously contained in Section 112 of the Income-Tax Act, 1961, into a single, simplified framework.

However, the Committee note a specific concern regarding the availability of the foreign exchange fluctuation benefit to non-residents (other than FIIs and specified funds) when computing long- term capital gains (LTCG) on the transfer of unlisted securities and shares of closely held companies (CHCs). The Committee believe this practice contradicts the policy intent of rationalisation introduced by the Finance (No. 2) Act, 2024. To ensure consistency with the earlier provision under Section 112(1)(c)(iii) of the Income-Tax Act, 1961, and to maintain equity among different classes of taxpayers, the Committee recommend amending Clause 197 to explicitly deny the foreign exchange fluctuation benefit to such non-residents in relation to these transfers.

Additionally, some stakeholders expressed concern that Clause 197 does not explicitly distinguish between LTCG arising from transfers made before and after 23 July 2024, potentially causing interpretational uncertainty. However, the Committee note— as clarified by the Ministry of Finance — that this issue is already addressed within the legislative framework. Since the Income-Tax Bill, 2025 is proposed to come into effect from April 1, 2026 (i.e., Assessment Year 2026–27), a separate reference to transfers occurring prior to 23 July 2024 is unnecessary. The Repeal and Savings clause, specifically Clause 536(2)(b), adequately governs the treatment of transactions undertaken under the existing law. Accordingly, the Committee consider this concern as already addressed through transitional provisions in the Bill.

Accordingly, the Committee recommend retaining Clause 197 in its present form, subject to the above modification, as it effectively streamlines and consolidates the provisions governing the taxation of long-term capital gains.

226.

198.6

198

The Committee, after a thorough examination of the proposal under Clause 198—including consideration of stakeholder inputs and the rationale provided by the Ministry of Finance—find the proposed provisions to be broadly acceptable. However, the Committee note that the phrase “on long-term capital gains” in Clause 198(2)(a) is repeated unnecessarily, which may cause ambiguity in interpretation. To enhance clarity and ensure precision without altering the policy intent, the Committee recommend the following modification:

Modification to Clause 198:

In sub-section (2)(a), the expression “on long-term capital gains” shall be deleted to streamline the language and avoid potential confusion.

227.

199.5

199

The Committee, after thorough deliberation upon the proposal made in Clause 199 under examination, including the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The clause provides for a beneficial tax rate of 25% for certain domestic manufacturing companies set up and registered on or after 1st March 2016, subject to conditions such as having their business limited to manufacture or production and forgoing certain deductions and carry forward of losses.

The Committee identified a drafting error in Clause 199(4), where the word "section" is unnecessarily repeated in line 30. The Committee therefore recommend that the error be rectified and the provisions under Clause 199 be accepted, subject to this correction.

228.

200.6

200

The Committee, after thorough deliberation upon the proposal made in Clause 200 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The clause provides for a beneficial rate of 22% for certain domestic companies subject to conditions, and prescribes the manner of computing total income and the implications for companies having Units in the International Financial Services Centre.

The Committee, however, note that while the existing provisions under Section 115BAA allowed a deduction in respect of inter-corporate dividends, the corresponding clause in the Bill inadvertently omits this benefit. The Ministry of Finance has explained that this is a drafting oversight and has accepted the suggestion to add a reference to clause 148 (section 80M) under Clause 200(1) (a) (ii). The Committee consider this change appropriate, as it will align the new provisions with the policy intent of the existing Section 115BAA.

Therefore, the Committee accept the provisions under Clause 200 subject to the following modification:

To insert a reference to Clause 148 (section 80M) under Clause 200(1) (a) (ii) .

This modification will enable domestic companies opting for the 22% concessional rate to deduct income by way of certain inter-corporate dividends, thereby removing an unintended inconsistency and aligning the new provisions with the policy of the existing Act.

229.

201.4

201

The Committee, after thorough deliberation upon the proposal made in Clause 201 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provisions to be broadly acceptable. The Committee note that the policy objective of providing a temporary stimulus to the manufacturing sector is adequately addressed through the current formulation of the clause. Accordingly, the Committee accept the clause as proposed.

230.

202.6

202

Upon careful consideration of the proposal under Clause 202, along with the views and suggestions of stakeholders and the rationale provided by the Ministry of Finance, the Committee is of the view that the proposed provisions are, in principle, acceptable. The Committee, however, note that while the Income- Tax Bill, 2025 broadly corresponds to Section 115BAC of the Income-Tax Act, 1961, there is a drafting oversight in the Bill. Specifically, Clause 202(1) omits a reference to Part A, B, C, D, and E of Chapter XIII, which prescribes special regimes for certain income. The Ministry of Finance has explained that this is a drafting correction and has accepted the suggestion to insert a reference to “Part A, B, C, D, and E of Chapter XIII” under Clause 202(1).

Therefore, the Committee accept the proposed Clause 202 subject to the following modification:

To insert a reference to “Part A, B, C, D, and E of Chapter XIII” under Clause 202(1) .

This modification will clarify that the new regimes under Clause 202 are subject to the special regimes under Part A, B, C, D, and E of Chapter XIII, thereby aligning the provisions with the policy intent of the existing Section 115BAC.

231.

203.4

203

The Committee, after thorough deliberation upon the proposal made in Clause 203 under examination and the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The Committee recommend retaining Clause 203 as it stands, noting that it corresponds to Section 115BAD of the Income-Tax Act, 1961, and simplifies the text without changing its policy intent or benefits for co-operative societies.

232.

204.4

204

The Committee, after thorough deliberation upon the proposal made in Clause 204, including the views/suggestions of stakeholders and the justification provided by the Ministry of Finance, find the proposed provisions to be broadly acceptable. Therefore, the Committee recommend retaining Clause 204 in its present form, noting that it corresponds to Section 115BAE of the Income-Tax Act, 1961, and simply simplifies the text while retaining its policy intent to provide an incentivised 15% tax rate for new manufacturing co-operative societies.

233.

205.4

205

The Committee, after thorough deliberation upon the proposal made in Clause 205 under examination, including the justification given by the Ministry of Finance, find the proposed provisions appropriate and reasonable. The Committee recommend to accept Clause 205 as proposed. The Clause consolidates and streamlines conditions previously contained in sections 115BA, 115BAA, 115BAB, 115BAD, and 115BAE of the Income-Tax Act, 1961, thereby providing greater clarity and ease of application. Further, the Committee note that there are references to the IT Act, 1961 in the proposed clause, which deviates from the intention of the Committee for a clean break of the Income-Tax Bill, 2025 from the IT Act, 1961. The committee are of the view that the clause referencing to 1961 will make the reading unwieldy and therefore the Committee recommend that the Ministry remove this reference from the proposed provisions under clause 205 of the Income- tax Bill, 2025, and instead incorporate it under the Repeal and Saving provisions under Clause 536.

234.

206.6

206

In view of the deliberations with various stakeholders and experts, and taking into account the detailed submissions and justification given by the Ministry of Finance, the Committee concur with the broad intent and direction of Clause 206 of the Income-tax Bill, 2025 (ITB 2025), particularly in relation to the consolidation and simplification of provisions concerning Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT). However, the Committee also note the substantive concerns raised by multiple stakeholders regarding the potential unintended consequences arising from the omission of safeguards and exemptions earlier available under Section 115JEE of the ITA, 1961, as well as the absence of express provision for adjustment of notional gains in the computation of MAT under Clause 206(4), and the drafting anomalies concerning surcharge treatment, pre-1997 reserves, and the liability of successor LLPs under AMT. While many of these issues are categorised by the Ministry as drafting corrections, the Committee are of the view that incorporation of these clarifications within the Bill text would strengthen legal certainty and reduce avoidable litigation.

Accordingly, to remove any ambiguity and ensure legal continuity with the legislative intent of the Income-tax Act, 1961 (ITA), the Committee recommend the redrafting of Clause 206 of the Income-tax Bill, 2025 (ITB) as follows:

Clause 206(1): Clarification on Scope of AMT for Non-Corporates

A new sub-clause may be inserted to clarify that AMT shall not apply to individuals, HUFs, AOPs, BOIs, or AJPs if:

(a) They have not claimed deductions under Section 10AA, Section 35AD, or Chapter VI-A (Part C), and

(b) Their adjusted total income does not exceed ₹20 lakhs.

A provision similar to Section 115JEE(3) of the ITA, allowing the carry-forward and set-off of AMT credit even in years where AMT is not applicable, may also be included.

Clause 206(2): Exclusion for Pre-1997 Reserves &Table Refinements

A proviso may be added to exempt reserves created before 1 April 1997 (by debit to profit and loss) from MAT adjustments, as MAT was not applicable during that time.

Further technical edits to the adjustment Table are recommended:

• Remove redundant text regarding debit/credit to profit and loss.
• Delete Column A (serial number), remove point (k), and restate point (f) as a footnote to avoid duplication.

Clause 206(3): Inclusion of Surcharge in MAT Credit

An Explanation may be inserted clarifying that “tax” includes surcharge and cess, both for determining MAT credit and its set-off—consistent with judicial precedent (CIT v. K. Srinivasan, 83 ITR 346).

206(4): Downward Adjustment for Notional Gains &Minor Corrections

• Allow a downward adjustment for notional gains on transfer of SPV shares to a business trust in exchange for units, as per Explanation (iie) to Section 115JB.
• Correct minor drafting errors in the Table (e.g., remove redundant “the”, fix clause references in Note 1, and update language to refer to "other comprehensive income").

Clause 206(17): AMT Applicability for Successor LLPs

Clarify that AMT liability shall apply to the successor LLP post-conversion, but MAT credit of the predecessor company shall not be carried forward—thereby restoring the position under the ITA, 1961.

These modifications are essential to ensure that ITB 2025 remains consistent with established tax policy under the ITA, 1961, removes drafting ambiguities, and safeguards against unintended consequences. The revised provisions strike a balanced approach between simplification, legal clarity, and fairness, while reducing scope for disputes.

235.

207.4

207

The Committee, after thorough deliberation upon the proposal made in Clause 207 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions appropriate and reasonable. The Committee accept Clause 207 as proposed. The Clause corresponds to Section 115A of the Income- Tax Act, 1961, and has been simplified and presented in a tabular format for ease of understanding. Accordingly, the Committee accept the proposed provision.

236.

208.4

208

The Committee has examined the provisions of Clause 208 and recommend to accept the clause as proposed. The clause is a simplification and retention of the existing Section 115AB of the Income-Tax Act, 1961, with some provisions presented in a tabular format for ease of comprehension. The intent and policy of the original Section 115AB have been maintained in this clause.

237.

209.6

209

The Committee, having carefully considered the proposed provisions under Clause 209, including stakeholder inputs and the rationale provided by the Ministry of Finance, is of the opinion that the provisions are broadly acceptable. The clause prescribed concessional tax rates for non-residents on income from bonds and Global Depository

Receipts (GDRs) purchased in foreign currency and on capital gains arising from their transfer. The Committee, however, note that while the Income-Tax Bill, 2025 broadly corresponds to Section 115AC of the Income-Tax Act, 1961, there are certain drafting oversights in the Bill. The word “From” in column B of Serial 1 and 2 of the table under Clause 209(1) is redundant and may affect clarity. Furthermore, in Clause 209(2) (a) (i), the expression “sub-section (1) ; or” is unnecessary and should be removed.

Therefore, the Committee accept the provisions under Clause 209 subject to the following modifications:

Remove the word “From” in column B of Serial 1 and 2 of the table under Clause 209(1) .

Remove the expression “sub-section (1) ; or” in Clause 209(2) (a) (i).

Therefore, the Committee accept the provisions under Clause 209 as proposed subject to the above modifications.

238.

210.4

210

The Committee, after thorough deliberation upon the proposal made in Clause 210 under examination, including the views/suggestions of stakeholders and the justification given by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The clause provides for special rates of income tax on income of Foreign Institutional Investors and specified funds from transfer of securities and capital gains arising therefrom. It prescribes concessional tax rates for different categories of income — ranging from 10% to 30% — depending on whether the income is from securities, short-term capital gains, or long-term capital gains.

The Committee note that the Income-Tax Bill, 2025 broadly corresponds to Section 115AD of the Income- Tax Act, 1961, and the provisions have been simplified and presented in a tabular format for ease of comprehension. The Ministry of Finance has explained that this is a consolidation and reorganization of existing provisions without affecting their policy intent. Therefore, the Committee accept the provision under Clause 210 as proposed.

239.

211.4

211

The Committee, after a detailed examination of Clause 211, including the suggestions of stakeholders and the rationale provided by the Ministry of Finance, is of the view that the provisions under Clause 211are broadly acceptable. The Committee note that the Income-Tax Bill, 2025 broadly corresponds to Section 115BBA of the Income-Tax Act, 1961, and the provisions have been simplified and presented in a tabular format for ease of understanding. Therefore, the Committee accept the proposal under Clause 211 as it stands.

240.

212.4

212

The Committee, after thorough deliberation upon the proposal made in Clause 212 under examination, including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The Committee note that the Income-Tax Bill, 2025 broadly corresponds to Section 115C of the Income-Tax Act, 1961, and the definition of “convertible foreign exchange” has been removed here and placed under Clause 2(30) of the Bill for simplification and ease of reference. The Ministry of Finance has explained that this change is meant to streamline the structure of the Act without affecting the policy intent or application of these provisions. Furthermore, the existing provisions have been simplified and presented more clearly in this clause while retaining their original intent. Therefore, the Committee accept the proposed provisions under Clause 212 as it stands.

241.

213.4

213

The Committee, after careful consideration of the proposal under Clause 213, including the justification provided by the Ministry of Finance, find the proposed provisions appropriate and consistent with the existing legal framework. The Committee note that Clause aims to rationalize the computation of total income for non-resident Indians by consolidating and clarifying provisions previously contained in Section 115D of the Income-Tax Act, 1961.Accordingly, the Committee accept Clause 213 as proposed, recognizing that it provides greater clarity and ease of application in line with the policy intent.

242.

214.6

214

The Committee, after thorough deliberation upon the proposal made in Clause 214 under examination, including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance, find the proposed provisions to be broadly acceptable. The clause prescribes the special rate of income tax payable by non-resident Indians on their investment income and long-term capital gains.

The Committee note that the said clause of Income-Tax Bill, 2025 broadly corresponds to Section 115E of the Income-Tax Act, 1961. The provisions have been simplified and presented more clearly while retaining their original intent.

The Committee observe that the reference to “income from long-term capital gains of an asset other than a specified asset” under Serial No. 1 of the table is a drafting oversight and should be removed. Therefore, the Committee accept the proposed Clause 214 with the following modifications:

To delete the words “income from long-term capital gains of an asset other than a specified asset” under Serial No. 1 of the table.

243.

215.6

215

The Committee, after thorough deliberation upon the proposal made in Clause 215 under examination, including the justification provided by the Ministry of Finance, find the proposed provisions broadly acceptable. The Committee note that this clause corresponds to Section 115F of the Income-Tax Act, 1961, and the Ministry has simplified the text while retaining its original intent. The formula for computing exemption when the cost of the new asset is less than the net consideration of the original asset has been explicitly incorporated in the Bill for ease of application and clarity. However, the Committee identified a drafting error in sub-section (2), where the phrase ‘For the’ are unnecessary and should be omitted to avoid redundancy.

Therefore, the Committee accept the proposed Clause 215 with the following modifications:

To omit the words “For the” in sub-section (2) for greater clarity.

244.

216.4

216

The Committee, after consideration of Clause 216 of the Bill, find the proposal reasonable and in keeping with the intent of the existing Section 115G of the Income-Tax Act, 1961.The clause provides that a non- resident Indian is not required to furnish a return of income if their total income consists only of investment income or long-term capital gains or both, and the applicable tax has already been deducted at source under Chapter XIX-B. The Ministry’s justification—that this simply textually streamlines the existing exemption without making any substantial change—is appropriate and desirable. Therefore, the Committee recommend retaining Clause 216 as it stands in the Bill.

245.

217.6

217

The Committee, after thorough deliberation upon the proposal made in Clause 217 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find that this clause aims to provide a benefit to a non-resident Indian who subsequently becomes a resident in India. It allows such a person to continue to be governed by the provisions of this Chapter in relation to income from certain specified assets, provided a declaration is furnished to the Assessing Officer along with their return of income.

The Ministry has explained that this change simply streamlines the text of the existing Section 115H of the Income-Tax Act, 1961, while retaining its main intent.

The Committee feel that the option of furnishing a separate declaration to the Assessing Officer could be incorporated directly into the return of income form instead. However, the Committee find this to be a procedural matter, which can be addressed at the time of framing Rules and designing the income tax return form. Therefore, the Committee consider it appropriate to retain the clause in its present form, subject to this consideration.

246.

218.5

218

The Committee, after careful consideration of the proposal made in Clause 218 under examination — including the justification provided by the Ministry of Finance — find that this clause simply streamlines and retains the intent of Section 115-I of the Income-Tax Act, 1961. It provides a non-resident Indian with the option to opt out of the special provisions of this Chapter by making a declaration in their return of income under Section 263.Once such a declaration is made, the provisions of this Chapter will not apply for that tax year, and the total income of the non-resident Indian will be computed and taxed in the normal manner under the other provisions of the Act. The Committee consider this a reasonable and flexible approach, allowing non-resident Indians to choose the regimen most beneficial to them in a given year.The Committee, therefore, accept the provisions under clause 218 as proposed.

247.

219.5

219

The Committee, after careful consideration of the proposal made in Clause 219 under examination — including the justification provided by the Ministry of Finance — find that this clause largely retains the intent and benefits previously available under Section 115JG of the Income-Tax Act, 1961.

The main objective of this clause is to facilitate the conversion of a branch of a foreign bank in India into a subsidiary company, without causing a capital gains event and while preserving certain benefits, such as carry forward of losses and depreciation and tax credit on previously deemed income. The conditions for this exemption and the procedure to withdraw these benefits if conditions are subsequently contravened have been adequately specified. The Ministry has simplified the wording while retaining the substance of the existing provisions. The Committee, therefore, consider it appropriate to retain Clause 219 of the Bill as it stands.

248.

220.4

220

The Committee, after consideration of Clause 220 of the Bill, find the proposal reasonable and in keeping with the intent of Section 115JH of the Income-Tax Act, 1961.The Committee note the justification furnished by the Ministry that this simply streamlines the text and retains the main intent of the existing provision. Therefore, the Committee accept the proposed clause.

249.

221.4

221

The Committee, after careful consideration of Clause 221 of the Bill, find the proposal reasonable and in consonance with the intent and policy objective of Section 115TCA of the Income-Tax Act, 1961.The Committee note the Ministry’s submission that the proposed clause does not introduce any substantial change in policy but rather streamlines and clarifies the existing provisions to align them more closely with their original legislative intent. The Committee find this approach appropriate and desirable. Therefore, the Committee accept the proposal as contained in Clause 221 of the Bill.

250.

222.4

222

The Committee, having carefully considered Clause 222 of the Bill, find the proposal to be reasonable, well-crafted, and in consonance with the legislative intent of Section 115U of the Income-Tax Act, 1961.The Committee note that the Ministry has explained these modifications as a textual streamlining of the existing provisions, while retaining their essential policy objective and procedural safeguards. Importantly, the mechanisms for attribution of income, filing of statements by the venture capital company or fund, and disclosure to the income-tax authorities remain adequately robust to facilitate proper oversight and compliance. In view of the above, the Committee find the proposal appropriate, desirable, and in keeping with the principle of pass-through taxation. Therefore, the Committee accept Clause 222 of the Bill in its present form.

251.

223.6

223

The Committee, after thorough deliberation upon the proposal made in Clause 223 — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provision broadly acceptable and in consonance with the policy intent of Section 115UA of the Income-Tax Act, 1961.

However, the Committee observe a minor drafting inconsistency in sub-section (2) of Clause 223. The proposal, as currently worded, omits a specific reference to Section 112A and Section 198, which was incorporated into Section 115UA(2) by the Finance Act, 2025. This oversight may affect the application of the 12.5% tax rate to income covered under Section 112A and the proper treatment of capital gains on transfer of long-term capital assets.

The Committee, therefore, consider it appropriate to recommend that Clause 223(2) be amended to expressly refer to Section 112A and Section 198. Such a modification would align the provision with its legislative intent and policy framework, thereby ensuring fairness, consistency, and clarity in application.

The Committee, therefore, accept the provisions of Clause 223 of the Bill subject to the above modification.

252.

224.6

224

The Committee, after thorough deliberation upon the proposal made in Clause 224 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provision broadly acceptable and in consonance with the policy objective of pass-through taxation for investment funds and their unit holders.

However, the Committee observes a discrepancy arising from the current definition of “investment fund” in Clause 224(10). As presently drafted, the definition could inadvertently encompass Categories of funds (such as Category III AIF) that were not intended to benefit from pass-through treatment. Specifically, the use of the broad expression “regulated under the International Financial Services Centres Authority (Fund Management) Regulations, 2022” may lead to the unintended inclusion of funds that do not fall under Categories I or II AIF.

The Committee feel that this inconsistency should be addressed to reflect the true policy intent and to avoid confusion in application. It, therefore, consider it appropriate to recommend that Clause 224(10) be amended to expressly provide that only “Category I or II Alternative Investment Funds, as defined under the International Financial Services Centres Authority (Fund Management) Regulations, 2022” shall be eligible for pass-through treatment.

253.

225.4

225

The Committee, having carefully considered Clause 225 of the Bill, find the proposal to be reasonable, well-crafted, and in consonance with the legislative intent of Section 115VA of the Income-Tax Act, 1961.The Committee note that the Ministry has explained these modifications as a textual streamlining of the existing provisions, while retaining their essential policy objective — namely, to simplify and bring predictability to the tax treatment of income from the operations of qualifying ships. Importantly, this approach aligns with international practices and policy incentives designed to foster growth in the country’s merchant navy and Shipping industry. In view of the above, the Committee find the proposal appropriate, desirable, and in keeping with the policy intent of tonnage-based taxation. Therefore, the Committee accept the provisions under Clause 225 of the Bill in its present form.

254.

226.4

226

The Committee, having carefully examined Clause 226 of the Bill, find the proposal to be reasonable, well-structured, and in harmony with the legislative intent of Sections 115VB, 115VE, and 115VF of the Income-Tax Act, 1961.

The Committee note that the Ministry has explained these modifications as a textual streamlining of the existing provisions, while retaining their essential policy objective — namely, to facilitate ease of computation, provide stability in tax treatment, and foster growth in the merchant navy sector. Importantly, the conditions for applicability of the scheme, the procedure for exercising the option, and the treatment of related income remain adequately clear and robust under the new framework.

In view of the above, the Committee find the proposal appropriate, desirable, and in keeping with the policy of tonnage-based taxation. Therefore, the Committee accept Clause 226 of the Bill in its present form.

255.

227.4

227

The Committee, having carefully considered Clause 227 of the Bill, find the proposal to be reasonable, well-crafted, and in consonance with the legislative intent of Sections 115VG, 115VH, and 115VX of the Income-Tax Act, 1961.

The Committee note that the Ministry has explained these modifications as a textual streamlining of the existing provisions, while retaining their essential policy objective — namely, to simplify and bring predictability to the computation of tonnage income for companies engaged in the business of operating qualifying ships. Importantly, this approach aligns with international practices and policy incentives designed to foster growth in the country’s merchant navy and Shipping industry.

In view of the above, the Committee find the proposal appropriate, desirable, and in keeping with the policy intent of tonnage-based taxation. Therefore, the Committee accept Clause 227 of the Bill in its present form.

256.

228.4

228

The Committee, after careful consideration of Clause 228 of the Bill, find the proposal reasonable and in keeping with the intent of Section 115V-I, 115VJ, and 115V-O of the Income-Tax Act, 1961.The Committee note the justification furnished by the Ministry that this change simply merges existing provisions into a unified framework while retaining their main intent. The Committee find this approach appropriate and desirable for simplifying the legislation and improving clarity in its application. Therefore, the Committee accept the Clause 228 as it stands in the Bill.

257.

229.4

229

The Committee, after considering Clause 229 of the Bill, find the proposal reasonable and in keeping with the main intent of Section 115VK and Section 115VN of the Income-Tax Act, 1961. The Ministry’s explanation that this simply clarifies and reorganises the text, without making substantial policy changes, is appropriate and desirable. Therefore, the Committee accept the provisions under Clause 229 as proposed in the Bill.

258.

230.5

230

The Committee, after careful consideration of Clause 230 of the Bill, find the proposal reasonable and in keeping with the intent of sections 115VL and 115VM of the Income-Tax Act, 1961.The Committee note Ministry’s justification that Clause 230 simply merges and streamlines the text of the existing provisions of Income-Tax Act, 1961while retaining their main intent is appropriate and desirable.Therefore, the Committee recommend retaining Clause 230 as it stands in the Bill.

259.

231.4

231

The Committee, after consideration of Clause 231 of the Bill, find the proposal reasonable and in keeping with the intent of Section 115VP, 115VQ, 115VR, and 115VS of the Income-Tax Act, 1961.The clause sets out the procedure for a qualifying company to opt for the tonnage tax scheme, the period of its validity, renewal conditions, and the circumstances under which the option may cease or be withdrawn. The justification furnished by the Ministry — that the provisions have been simplified and redundancy removed while retaining their main intent — is appropriate and desirable. Therefore, the Committee recommend retaining Clause 231 as it stands in the Bill.

260.

232.6

232

The Committee, after thorough deliberation upon the proposal made in Clause 232 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provision broadly acceptable.

However, the Committee observe a discrepancy arising from the use of the prefix “new” for inland vessels but not for ships. This may inadvertently allow more second-hand vessels to be chartered in, exceeding the intended 49% limit.

The Committee feel that this inconsistency should be addressed to reflect the true policy intent and to avoid confusion in application. It, therefore, consider it appropriate to recommend that the terminology be amended to apply the 49% limit uniformly to all chartered-in vessels — whether new or second-hand — in order to maintain fairness and policy consistency. The Committee, therefore, suggest that the Ministry consider this modification while finalizing the provisions of Clause 232 of the Bill.

261.

233.6

233

The Committee, after thorough deliberation upon the proposal made in Clause 233 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provision broadly acceptable.

However, the Committee observe a discrepancy arising from the use of the term “new inland vessel” in this context. The use of “new” may inadvertently create confusion and inconsistency in application, particularly when the policy intent applies uniformly to all inland vessels, regardless of whether they are new or second-hand.

The Committee feel that this inconsistency should be addressed to reflect the true policy intent and to avoid confusion in application. It, therefore, consider it appropriate to recommend that the terminology be amended to refer simply to “inland vessel” — thereby applying the provisions uniformly to all such vessels — in order to maintain fairness and policy consistency. The Committee, therefore, suggest that the Ministry consider this modification while finalizing the provisions of Clause 233 of the Bill.

262.

234.5

234

The Committee, after thorough deliberation upon the proposal made in Clause 234 under examination — including the views and suggestions of stakeholders and the justification provided by the Ministry of Finance — find the proposed provision broadly acceptable.

The Committee note that this clause aims to curb abuse of the tonnage tax scheme and to empower the Assessing Officer to exclude companies from the scheme where transactions or arrangements are entered into with the main purpose of avoiding tax. The provisions largely retain the intent of the existing sections 115VZB and 115VZC of the Income-Tax Act, 1961, while simplifying their language.

The Committee believe that this measure is reasonable and necessary to safeguard revenue and to maintain fairness in the application of the tonnage tax scheme. However, the Committee underscores the importance of proper safeguards — including a show-cause notice and the approval of the Principal Chief Commissioner or Chief Commissioner — to avoid arbitrary decisions and to provide companies with an opportunity to explain their transactions.

Therefore, the Committee find the proposal appropriate and broadly endorse its retention in the Bill.However, the Committee suggest that the Ministry and the Assessing Officer should apply these provisions judiciously, to deal with cases of abuse while not affecting bona fide transactions.The Committee, therefore, recommend that the Ministry consider this observation while finalizing the provisions of Clause 234 of the Bill.

263.

235.6

235

The Committee has carefully examined Clause 235 of the Income-Tax Bill, 2025, which sets out definitions for key terms used in the tonnage tax scheme. The Committee find these definitions broadly align with the existing provisions under Section 115V of the Income-Tax Act, 1961, and help streamline and consolidate all related definitions into a single clause for better readability and clarity. The Committee has taken note of a drafting inconsistency in Clause 235(a), where the word “new” has inadvertently been placed before “inland vessel”—a terminology not present in the principal Act and not required in this context. The use of “new” may confuse stakeholders and lead to interpretational issues. Therefore, in view of this oversight, the Committee recommend the deletion of the word “new” from Clause 235(a) to align it with the terminology used for “bareboat charter” under the principal Act. The rest of the definitions in this clause may be retained as originally drafted, given their clarity and utility in simplifying the tonnage tax framework. The Committee, therefore, endorses Clause 235 with this minor modification.

264.

236.4

236

The Committee, upon examination and the justification provided by the Ministry, note that the provisions proposed in the clause are in line with corresponding section of the 1961 Act. The Committee find the provisions to be a textual simplification and therefore accept the Clause as proposed.

265.

237.4

237

The Committee, upon examination and the justification provided by the Ministry, note that the provisions proposed in the clause are mere textual simplification of the existing provision of the 1961 Act. The Committee, therefore, accept the Clause as it stands.

266.

238.4

238

The Committee note the justification provided by the Ministry and find the provisions of the Clause 238 in line with the existing provisions of the 1961 Act. Being a textual simplification, the Committee accept the Clause as proposed.

267.

239.6.1

239

The Committee, upon detailed deliberations on various provisions of the Clause, find a missing reference to Clauses 288 and 408 in Clause 239(3)(a) and therefore recommend for insertion thereof for better clarity and to align it with the provisions of the Act.

268.

240.4

240

The Committee note the justification provided by the Ministry and find the provisions of the Clause 240 in line with the existing provisions and a textual simplification and therefore accept the Clause as proposed.

269.

241.4

241

The Committee, upon examination and the justification provided by the Ministry, find the provisions of the Clause 241, as a textual simplification of the existing provisions of the 1961 Act and therefore accept the Clause as it stands.

270.

242.6.1

242.6.2

242

(i) The Committee, upon deliberations on the Clause, note that there is a drafting error in sub-clause (6) which needed to be re-drafted for better clarity and the same is acceptable to the Ministry. The Committee, therefore, recommend that the phrase ‘if any,’ at Line No. 28 may be removed and be placed at Line no. 27 after ‘income’ so as to clearly explain the intent of the sub-clause.

(ii) The Committee further note a cross reference in sub-clause 4(c) to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently and accept the remaining portion of the proposed Clause 242 without any further change.

271.

243.4

243

The Committee note the justification provided by the Ministry and find the provisions of the Clause 243 in line with the existing provisions and a textual simplification and therefore accept the Clause as proposed.

272.

244.4

244

The Committee, upon examination and the justification provided by the Ministry, find the provisions of the Clause 244 in line with the corresponding provisions of the 1961 Act. Therefore, the Committee accept the Clause as proposed.

273.

245.4

245

The Committee, upon examination and the justification given by the Ministry, find the provisions of the Clause 245 to be in line with the existing provisions of 1961 Act and being a textual simplification, the Committee accept the Clause as proposed.

274.

246.6.1

246

The Committee, upon examination of the Clause, note that sub-clause (2)(b) requires an amendment to incorporate the concept of jurisdiction for the exercise of powers related to discovery and production of evidence. Accordingly, the Committee recommend that sub-clause (2)(b) be amended to retain the original language and intent of Section 131(1A) of the existing Income-Tax Act, while specifically including the jurisdictional concept, ensuring such powers are exercised by an officer within whose jurisdiction the assessee is situated.

275.

247.6.1

247

The Committee note certain drafting corrections needed to be carried out in some sub-clauses as under:

(i) In sub-clause(5)(b), the word "with" (Line No.46) needs to be removed from phrase “or the Director General, as per with such procedure, as prescribed.

(ii) In sub-clause 247(9) the word "value" needs to be replaced by "valuer" (Line No.42).

(iii) Further, in sub-clause (9), the word "enforce” (Line No.43) needs to be replaced by "in force" and the phrase “as may be approved by the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General” need to be added for better clarity.

276.

248.6

248

The Committee note the justification provided by the Ministry and find the provisions of the Clause 248 in line with the existing provisions and mere textual simplification and therefore accept the Clause as proposed.

277.

249.6

249

The Committee, upon deliberation on the Clause and the justification provided by the Ministry, find the provisions of the Clause 249 in line with the existing provisions of the 1961 Act and therefore accept the Clause as proposed.

278.

250.6

250

(i) The Committee, upon examination and the justification provided by the Ministry, find the provisions of the Clause 250 to be a textual simplification with no change in intent and in line with the existing provisions of the 1961 Act. The Ministry, under the Clause, has provided a formula to calculate the amount on which the central government shall pay the simple interest at the rate of 0.5% for every month, so as to eliminate the scope of any ambiguity. The Committee, therefore, accept the Clause as proposed.

(ii) The Committee further note in the Clause a cross reference to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently.

279.

251.3

251

The Committee note the justification provided by the Ministry and find the provisions of the Clause 251 to be mere textual simplification and in line with the corresponding provisions of 1961 Act and therefore accept the Clause as it stands.

280.

252.6

252

The Committee note that there is a need to amend Clause 252(1)(e) to clarify the application of the financial threshold for calling for information. The Committee observe that currently Clause 252(1)(e) empowers the income tax authority to require an assessee to furnish details of payments made for "rent, interest, commission, royalty or brokerage, or any annuity, not being any annuity taxable under the head 'Salaries' amounting to more than ten thousand rupees”. The phrase "amounting to more than ten thousand rupees" appears to qualify only "any annuity, not being any annuity taxable under the head 'Salaries'". The Committee observe that this may create an ambiguity, suggesting that for other payments like rent, interest, commission, royalty, or brokerage, there might not be a specified minimum limit for which information can be sought. Therefore, the Committee recommend that the sub-clause (1)(e) may be amended to ensure that the limit of ‘ten thousand rupees’, clearly applies to all the preceding categories of payments ‘"rent, interest, commission, royalty or brokerage, or any annuity, not being any annuity taxable under the head 'Salaries'”.

281.

253.6

253

The Committee, upon examination and justification provided by the Ministry, find the provisions of the Clause 253 in line with the existing provisions of the 1961 Act and therefore accept the Clause as

proposed.

282.

254.5

254

The Committee, upon examination and justification provided by the Ministry, find the provisions of the Clause 254 in line with the existing provisions of the 1961 Act and therefore accept the Clause as

proposed.

283.

255.4

255

The Committee note the justification provided by the Ministry and find the provisions of the Clause 255 to be textual simplification of the corresponding provisions of the existing Act and therefore accept the Clause as proposed.

284.

256.4

256

The Committee note the justification provided by the Ministry and find the provisions of the Clause 256 to be a textual simplification of the corresponding provisions of the existing Act and therefore accept

the Clause as proposed.

285.

257.4

257

The Committee note the justification provided by the Ministry and find the provisions of the Clause 257 to be textual simplification of the existing provisions with the same intent in this clause. The Committee, therefore, accept the Clause as it stands.

286.

258.4

258

The Committee note the justification provided by the Ministry and find the provisions of the Clause 258 to be textual simplification and in line with the existing provisions of the 1961 Act and therefore accept the Clause as proposed.

287.

259.4

259

The Committee note the justification provided by the Ministry and find the provisions of the Clause 259 to be a textual simplification of the existing provisions of the 1961 Act and therefore accept the Clause as proposed.

288.

260.4

260

The Committee, upon examination of the justification provided by the Ministry, find the provisions of the Clause 260 to be mere textual simplification of the existing provisions and therefore accept the Clause as proposed.

289.

261.4.1

261.4.2

261

(i) The Committee note in the Clause a cross reference to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently.

(ii) The Committee, upon examination of the provisions of the Clause and the justification provided by the Ministry find that this is a new clause which consolidates various definitions in the corresponding sections of the 1961 Act. For simplification, certain interpretations like approving authority, competent authority have also been provided. Apart from the above recommendation, the Committee find the clause to be adequate and in line with the corresponding section of the 1961 Act and accept the same as it stands.

290.

262.6

262

The Committee, upon examination of the provisions along with justification provided by the Ministry, find the provisions of the Clause 262 to be corresponding and in line with the provisions of the existing Act. The Committee, therefore, accept the Clause in entirety.

291.

263.6.1

263

(i) The Committee observe that Clause 263(1) of the Bill states that for persons other than companies or firms, the ITR filing obligation is there if their total income exceeds the basic exemption limit without giving effect to deductions allowable under "Chapter IV-E (Capital Gains)." However, the Committee note that referring to the entire "Chapter IV-E" is too broad as this Chapter covers not only specific exemptions  but also fundamental elements of capital gains computation such as the cost of acquisition, indexed cost, and exempt transfers. Also, the broad phrasing might be misinterpreted to mean that all these computational elements (cost, exempt transfers, etc.) are to be ignored when calculating total income for the ITR filing threshold. Therefore, the Committee recommend that in order to prevent potential litigation, avoid ambiguity and ensure clarity, the provisions of the Bill may be amended to align with the existing Act by explicitly specifying only those particular deductions within Chapter IV-E that are to be disregarded when determining the ITR filing threshold, rather than the entire chapter.

(ii) The Committee observe that the current mandatory requirement to file a return solely for the purpose of claiming a refund could inadvertently lead to prosecution, particularly for small taxpayers whose income falls below the taxable threshold but from whom tax has been deducted at source. In such scenarios, the law should not compel a return merely to avoid penal provisions for non-filing. The Committee, therefore, recommend to remove Sub-Clause (1)(ix) to Clause 263 to provide flexibility for allowing refund claims in cases where the return is not filed in due time.

(iii) The Committee further note that there is an error in cross-referencing in sub-clause 8(a). Therefore, the Committee recommend to remove '(4)' from referred Section '239(4)(3)(b)' in sub-clause (8)(a) to Clause 263.

(iv) The Committee recommend that to provide better clarity regarding due date of filing returns, in the Table in Clause 263 for company with Transfer Pricing transactions, the due date 30th November may be added.

292.

264.6

264

The Committee, upon examination and the justification provided by the Ministry, find the provisions of the Clause 264 in line with the existing provisions with retention of the same intent and therefore accept the Clause as proposed.

293.

265.4

265

The Committee note the justification provided by the Ministry and find the provisions of the Clause 265 to be textual simplification of the existing provisions of the 1961 Act with no change in policy and intent and therefore the Committee accept the Clause as it stands.

294.

266.4

266

The Committee, upon examination and the justification provided by the Ministry and find the provisions of the Clause 266 corresponding to the existing provisions and therefore accept the Clause as proposed.

295.

267.6

267

The Committee, upon examination of the provisions of the Clause, note a drafting error in sub-clause 267(12) and therefore recommend to re-draft the said sub-clause so as to improve its clarity and precision, aligning it with the overall scheme of updated returns, especially when it is the first return filed. The Committee, other than recommending the Ministry to carry out the necessary change, find the provisions to be a textual simplification and accept the Clause as proposed.

296.

268.6.1

268

The Committee, upon examination of the Clause, note a drafting correction and therfore recommend to replace the phrase ‘in the such form’ with ‘in the prescribed form’ in sub-clause (5)(i) so as to bring more clarity in meaning and intent.

297.

269.6

269

The Committee, upon examination and the justification given by the Ministry, find the provisions of the Clause 269 in line with the existing provisions therefore accept the Clause as proposed.

298.

270.6.1

270

The Committee observe that the proposed Clause 270(1)(a)(v) stipulates a broad disallowance of deduction under Chapter VIII if the return is furnished beyond the due date. However, the existing Income- Tax Act, 1961, does not have such a blanket disallowance for the entire Chapter VIII instead such a restriction was limited to deductions claimed under under Heading C – "Deductions in respect of certain incomes" within Chapter VIII. Therefore, to align the provision with the current law, the Committee recommend that Clause 270(1)(a)(v) be modified to restrict the disallowance only to deductions under Heading C of Chapter VIII.

299.

271.4

271

The Committee, upon examination of the justification provided by the Ministry, find the provisions of the Clause 271 to be in line with the existing provisions of the 1961 Act. The Committee note that the Clause is mere textual simplification with retention of the same intent and therefore accept the Clause as it stands.

300.

272.6

272

The Committee, upon detailed deliberations of the provisions of the Clause along with justifications provided by the Ministry, find the provisions of the Clause 272 to be mere textual simplification and corresponding to the existing provisions of the 1961 Act. The Committee, therefore, accept the Clause in entirety.

301.

273.6

273

The Committee, upon detailed deliberaton on the various provisions of the Clause along with justification provided by the Ministry, find the provisions of the Clause 273 to be corresponding and in line with the existing provisions of the 1961 Act. The Committee, therefore, accept the Clause as proposed.

302.

274.6

274

The Committee, upon examination and the justification provided by the Ministry, find the provisions of the Clause 274 to be textual simplification, retaining the intent of the existing provisions of the 1961 Act and therefore accept the Clause as proposed.

303.

275.6

275

The Committee, upon examination and the justification given by the Ministry, find the provisions of the Clause 276 in line with the existing provisions therefore accept the Clause as proposed.

304.

276.6

276

The Committee note the justification provided by the Ministry and find the provisions of the Clause 276 to be mere textual simplification of the corresponding provisions of the existing Act with no change in intent and therefore accept the Clause as proposed.

305.

277.6

277

The Committee note the justification provided by the Ministry and find the provisions of the Clause 277 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

306.

278.4

278

The Committee note the justification provided by the Ministry and find the provisions of the Clause 278 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

307.

279.6.1

279.6.2

279

(i) The Committee note a drafting correction in Sub-Clause(1) at Line No.11 and recommend to put a missing bracket in clause 279(1).

(ii) The Committee recommend for the merging of income escaping assessment clause 279(2)(a) and 279(2)(b) of the Bill.

308.

280.6

280

The Committee note the justification provided by the Ministry and find the provisions of the Clause 280 to be corresponding to the existing provisions with textual simplification and therefore accept the Clause as proposed.

309.

281.6.1

281

The Committee observe that in sub-clause (1) to Clause 281, the purpose for issuing show-cause notice is not provided. That was there in the earlier wording in the Act of 1961 which said ‘Serving upon him a notice to show cause as to why a notice under Section 148 should not be issued’. Therefore, the Committee recommend to align Clauses 281(1) & 281(2) with the IT Act, 1961.

310.

282.6.1

282

The Committee note that adding the words 'in his possession' in sub-clause (1)(b) before ‘books of accounts’ at Line No.03 can bring the provision in alignment with the Act. The Committee, therefore, recommend the Ministry to align it with the existing Act.

311.

283.6

283

The Committee note the justification provided by the Ministry and find the provisions of the Clause 283 in line with the existing provisions with mere textual simplification and no change in intent and therefore accept the Clause as proposed.

312.

284.6

284

The Committee note the justification provided by the Ministry and find the provisions of the Clause 284 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

313.

285.6.1

285.6.2

285

(i) The Committee recommend to replace ‘may’ with the word ‘shall’ in sub-clause (2) to align the proposed provision with the existing Act.

(ii) The Committee further recommend that in Clause 285(2)(b) at Line No.46, reference may be amended to “original assessment order for the relevant tax year” not for “relevant year” for more clarity.

314.

286.6.1

286.6.2

286

The Committee note a drafting error in sub-clause (7) in its reference to sub-section (3)(k) at Line No.11 instead of (3)(j). Therefore, the Committee recommend to replace the usage ‘(3)(k)’ with ‘(3)(j)’ in sub-clause (7) to provide for correct referencing as per the intent of the provision.

The Committee note in the Clause a cross reference to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently.

315.

287.6.1

287.6.2

287

(i) The Committee observe that Clause 287(1) provides for amending any order and intimation within its context. However, in Clause 287(2), while referring to the above said sub-clause (1), the Bill refers to ‘order’ only. Therefore, to bring in more clarity, the Committee recommend that in sub-clause (2), the word ‘intimation’ may suitably be mentioned at Line No.33 after ‘order’. The Committee also recommend that similar reference to ‘intimation’ may also be suitably mentioned in sub-clause (8).

(ii) The Committee also recommend that the reference to Clause 271(1) dealing with best judgment assessment in Clause 287(1)(b) may be suitably replaced by “ Clause 270(1)” which actually deals with assessment.

316.

288.6.1

288

(i) The Committee note that the reference to Clause 271 dealing with best judgment assessment at sub-clause (12) of Clause 288 at Column B needs to be corrected. Therefore, the Committee therefore recommend that the correct reference may be amended to Clause 270 which deals with assessment.

(ii) The Committee note in the Clause a cross reference to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently.

317.

289.6

289

The Committee, upon detailed deliberation on the Clause along with the justification provided by the Ministry, note that the provisions of the Clause 289 are in line with the existing provisions of 1961 Act with textual simplification and therefore accept the Clause as proposed.

318.

290.4

290

The Committee note the justification provided by the Ministry and find the provisions of the Clause 290 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

319.

291.5

291

The Committee, upon examination along with justification provided by the Ministry, find the provisions of the Clause 291 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

320.

292.6.1

292.6.2

292

(i) The Committee recommend that amendments made by Finance Act, 2025 with respect to assessment of total undisclosed income pertaining to the block period may be incorporated in Clause 292.

(ii) The Committee observe that the Clause 292, which addresses the assessment of income for a block period, currently refers to “other than this chapter” at sub-clause (2). Given that Chapter XVI comprises Part A (procedure for assessment) and Part B (special procedure for assessment of search cases), this phrasing “other than this chapter” excludes both parts. The Committee observe that here the intent, however, is to exclude only Part B. Therefore, the Committee recommend to change the phrase "other than this Chapter" at sub-clause (2) to "Part B of this Chapter" in Clause 292 to accurately reflect the exclusion.

321.

293.6.1

293

(i) The Committee recommend that amendments made by Finance Act, 2025 may be suitably incorporated in Clause 293.

(ii) The Committee note in the Clause a cross reference to the 1961 Act, which is proposed to be repealed. Therefore, the Committee recommend the Ministry to remove the reference to the old Act, 1961 from the body of the Bill itself by clubbing it in the Savings clause coherently.

322.

294.6.1

294.6.2

294.6.3

294

(i) The Committee observe that the amendments made by Finance Act, 2025 are not incorporated in Clause 294. The Committee, therefore, recommend that amendments made by Finance Act, 2025 may be suitably incorporated in Clause 294.

(ii) The Committee note that the reference of ‘Section 259’ dealing with power to call for information by prescribed income-tax authority mentioned at Clause 294(1)(a)(ii), LineNo.12 is incorrect. The Committee observe that in the context of provisions in Clause 294 the correct reference should be to ‘Section 263’. The Committee recommend to replace the reference ‘Section 259’ at sub-clause(1)(a)(ii) with ‘Section 263’.

(iii) The Committee also note that the sub-clause (b) empowers the Assessing Officer to determine the total income including the undisclosed income of the block period in the manner laid down in the Act. Therefore, in this context, the references to sections ‘287 and 288’ are incorrect and need to be substituted with ‘sections 277 and 278’, relating to 'method of accounting in certain cases' and 'taxability of certain respectively. The Committee therefore recommend to replace references to sections ‘287 and 288’ with ‘sections 277 and 278’ in sub-clause (b).

323.

295.6.1

295

The Committee observe that the amendments made by Finance Act, 2025 are not incorporated in Clause 295. The Committee, therefore, recommend that amendments made by Finance Act, 2025 may be suitably incorporated in Clause 295.

324.

296.6.1

296

The Committee observe that the amendments made by Finance Act, 2025 are not incorporated in Clause 296. The Committee, therefore, recommend that amendments made by Finance Act, 2025 may be suitably incorporated in Clause 296.

325.

297.4

297

The Committee note the justification provided by the Ministry and find the provisions of the Clause 297 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

326.

298.6.1

298.6.2

298.6.3

298

(i) The Committee note that in the short tile, instead of ‘in certain cases’, it is read as ‘incertain cases’. The Committee, therefore, recommend to replace ‘incertain cases’ with ‘in certain cases’ at the short title.

(ii) The Committee further observe that in sub-clause (3) instead of referring to corresponding provision Clause 453, Clause 452 is mentioned and the Committee recommend to replace the reference to Clause 452 with Clause 453.

(iii) The Committee recommend that Financial Act, 2025 amendments may be incorporated in Clause 298 suitably.

327.

299.4

299

The Committee note the justification provided by the Ministry and find the provisions of the Clause 299 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

328.

300.4

300

The Committee note the justification provided by the Ministry and find the provisions of the Clause 300 in line with the existing provisions with mere textual simplification and therefore accept the Clause as proposed.

329.

301.4

301

The Committee note the justification provided by the Ministry and find the provisions of the Clause 301 in line with the existing provisions with textual simplification and therefore accept the Clause as proposed.

330.

302.6

302

The Committee observe Clause 302 of the Bill (mirroring Section 159 of the extant Act) regarding legal representatives in death cases. The Committee find a drafting error in sub-clause (5) where "sum" should be replaced with "tax," which the Department accepts. The suggestion to add "for less than adequate consideration" in sub-clause (5) is deemed untenable as it is an anti-abuse provision. The Committee, therefore, concur with the views of the Department of Revenue and recommend to amend the sub-clause (5) as accepted. Apart from this drafting correction, the Committee approve the clause as proposed.

331.

303.5

303

The Committee note that Clause 303 provides for representative assessee, aligns with the provisions of Section 160 of the Income-Tax Act, 1961. The Committee also note that the textual simplification of clause 303 is as per the objectives of the Bill and retaining the same intent. The Committee, therefore, accept the Clause as proposed.

332.

304.6

304

The Committee observe Clause 304 of the Bill, aking to Section 161 of the extant Act, provides for liability of representative assessee. The Committee find a drafting error in sub-clause (1) (a) of Clasue 304 where the phrase “"and any other proceedings' shall be deleted in order to align the provision of the Bill with the Act which the Department has accepted. The suggestion to add a proviso regarding recovery against the representative or tax payer is impractical as it is not possible for both parties to be taxed separately on the same income. The Committee, therefore, concur with the views of the Department of Revenue and recommend only the above-mentioned drafting correction in Clause 304(1)(a); and accept the clause as proposed.

333.

305.5

305

The Committee note that Clause 305 is in consonance with objectives of the Bill, therefore, the Clause may be made part of the Bill, as proposed by the Department.

334.

306.6

306

Clause 306 defines who may be regarded as an agent. The Committee note that this Clause is simplified textual version of existing Section 163 maintaining Government original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 306 as proposed.

335.

307.5

307

The Committee note that Clause 307, a textual simplification of Section 164 of the Income-Tax Act, 1961, provides for change of tax where share of beneficiaries unknown. As no policy changes are incorporated, the Committee accept Clause 307 as proposed by the Department of Revenue.

336.

308.5

308

The Committee note that Clause 308 of the Bill sets forth the special tax provision for oral trusts, akin to Section 164A of the Income-Tax Act, 1961. The Committee further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

337.

309.6

309

Clause 309 of the Income-Tax Bill 2025 outlines the method for computing a member’s share in income of association of persons or body of individuals, corresponding to Section 67A of the Income-Tax Act, 1961. The Committee find that this Clause has been reformulated by paraphrasing the existing provisions to enhance clarity and comprehension. Furthermore, noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 309 as proposed.

338.

310.5

310

The Committee observe that Clause 310 of the Bill provides for share of member of an association of persons or body of individuals in income of association or body which corresponds to Section 86 of the extant Act. The Committee note that, apart from textual simplification, no policy change has been introduced in this Clause. The Committee, therefore, accept Clause 310 as proposed by the Department of Revenue.

339.

311.5

311

The Committee note that Clause 311 of the Bill provides for charge of tax where shares of members in association of persons or body of individuals unknown etc. is similar to the provisions of existing Section 167B of the Income-Tax Act, 1961 with no policy change. The Committee, therefore, approve the Clause 311 as proposed by the Department of Revenue.

340.

312.5

312

The Committee note that Clause 312 of the Income- Tax Bill, 2025, which corresponds to Sections 168 and 169 of the Income-Tax Act, 1961, provides for Executor, in whose hands income of the estate of a deceased person shall be chargeable to tax. Given that this Clause is similar to the existing Sections 168 and 169 with no policy change, the Committee recommend its inclusion as is in the proposed legislation.

341.

313.6

313

The Committee note that Clause 313, which addresses succession in business or profession (excluding succession by death), mirrors Section 170 of the Income-Tax Act, 1961. In the course of examination of the Bill, the Committee deliberated upon the suggestions received from the stakeholders and the responses from the Department of Revenue. The Committee also note the Department’s agreement to reinstate the word "whatsoever" in the clause, replacing "in any manner." This change aligns with the Committee's suggestion and the existing Income- Tax Act, 1961. After considering the viewpoints of both the stakeholders and the Department, the Committee recommend that sub-clause (6) (a) of Clause 313 be amended to incorporate the word "whatsoever," as agreed by the Department. Beyond this specific drafting correction, the Committee accept Clause 313 as proposed by the Department.

342.

314.6

314

The Committee note that Clause 314 of the Bill, which addresses how tribunal or court orders affect business reorganization, streamlines the existing Section 170A of the Act while preserving its core intent. Following receipt and deliberation on suggestions from stakeholders and experts, the Committee observe that the Department of Revenue has agreed to specific textual revisions within Sub-Clauses (2)(a) and (2)(b). These involve replacing "in accordance with such order" with "in accordance with such order in respect of business reorganisation" in Clause 314(2)(a), and substituting "order of the business reorganisation" with "order in respect of business reorganisation" in Clause 314(2)(b). The Department deems these as drafting corrections that do not alter the Bill's provisions relative to the Act. Therefore, sub-clauses (2)(a) and (2)(b) of Clause 314 may be redrafted as follows:

2) Where the assessment or reassessment proceedings for a tax year to which the order in respect of the business reorganisation applies,––

(a) have been completed on the date of furnishing of the modified return as per the provisions of sub-section (1), the Assessing Officer shall pass an order modifying the total income of the relevant tax year determined in such assessment or reassessment, in accordance with such order inrespect of business reorganisation and taking into account the modified return so furnished;

(b) are pending on the date of furnishing of the modified return as per sub-section (1), the Assessing Officer shall pass an order assessing or reassessing the total income of the relevant tax year as per the order in respect of the business reorganisation and taking into account the modified return so furnished.”

After a thorough review of the perspectives shared by stakeholders and the Department, the Committee approve Clause 314, contingent upon the aforementioned drafting corrections.

343.

315.6

315

The Committee note that Clause 315 of the Bill, which provides for the assessment process following the partition of a Hindu Undivided Family (HUF), mirrors Section 171 of the existing Income-Tax Act. The Committee also note that the provisions of the current section have been textually simplified and carried forward into this new clause with no intended policy changes. After carefully considering the views presented by various stakeholders and the responses from the Department, the Committee approve Clause 315, as proposed.

344.

316.5

316

The Committee note that Clause 316 of the Bill provides for shipping business of non-residents, aligns with Section 172 of the Income-Tax Act, 1961. The Committee concurs with the Department’s justification for retaining this clause with the same intent, incorporating only textual simplification. The Committee, therefore, accept the Clause in its current form.

345.

317.5

317

The Committee note that Clause 317 of the Income- Tax Bill, 2025, mapped to Section 174 of the Income- Tax Act, 1961, provides for assessment of persons leaving India. The Committee approve Clause 317 as proposed, noting its simplified approach to existing provisions.

346.

318.5

318

The Committee note that Clause 318 of the Bill, dealing assessment of association of persons or body of individuals or artificial judicial person formed for a particular event or purpose, aims to simplify the existing provisions of Section 174A. The Committee concur with the Department’s justification for this simplification and, therefore, accept Clause 318 as proposed.

347.

319.6

319

The Committee observe that Clause 319 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 175 of the Income-Tax Act, 1961 regarding assessment of persons likely to transfer property to avoid tax. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 319 as proposed.

348.

320.6

320

The Committee note that Clause 320 of the Bill addresses the provisions for discontinued businesses, directly corresponding to Section 176 of the existing Income-Tax Act. The Committee observe that while there is no intended policy change, the provisions of the original section have been textually simplified and carried forward with the same core intent into this new clause. After extensive deliberation on the views of the stakeholders as well as the response of the Department, the Committee accept Clause 319 as proposed.

349.

321.5

321

The Committee note that Clause 321, a simplified text of the existing Section 177, relating to association dissolved or business discontinued and involves no policy shift. The Committee, therefore, accept Clause 321 as proposed by the Department of Revenue.

350.

322.6

322

Clause 322 of the Bill specifies provisions concerning a company in liquidation. The Committee note that this Clause is simplified textual version of existing Section 178 of the Income-Tax Act, 1961 maintaining Government original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 322 as proposed.

351.

323.6

323

The Committee note that Clause 323 deals with liability of directors of private company, aligns with the provisions of Section 179 of the Income-Tax Act, 1961. The Committee also note that the textual simplification of clause 323 is as per the objectives of the Bill and retaining the same intent. The Committee, therefore, accept the Clause as proposed.

352.

324.5

324

The Committee note that Clause 324 of the Bill pertains to charge of tax in case of a firm, aligns with existing Section 167A of the Income-Tax Act, 1961; but features simplified linguistic construction. Expressing their concurrence with the justification given by the Department of Revenue in this regard, the Committee accept Clause 324 as it is.

353.

325.6

325

The Committee observe Clause 325 of the Bill (mirroring Section 184 of the 1961 Income-Tax Act) on partnership firm assessments. They note a discrepancy in Clause 325(6)(b), which incorrectly references "section 26(2)(f)" instead of the correct "section 26(2)(g)," as per the corresponding Section 184(5) of the 1961 Act. The Ministry of Finance has accepted this correction. The Committee, thus, advise amending Clause 325(6)(b) to rectify this, while accepting the rest of the clause.

354.

326.5

326

Noting that Clause 326 of the Bill, dealing with consequences in the assessment of a partnership firm in case of non-compliance to the conditions made by rules, is a textual simplification of Section 185 of the Income-Tax Act, 1961 with the same intent, the Committee accept the Clause in its present form.

355.

327.5

327

The Committee note that Clause 327 of the Bill addresses assessment of a partnership firm in cases where there is a change in constitution of the firm, aligns with the existing Section 187 and involves no policy shift. The Committee, therefore, accept Clause 327 as proposed by the Department of Revenue.

356.

328.5

328

The Committee note that Clause 328 of the Bill prescribing provisions for taxation in the hands of the predecessor and successor in the case of succession of one firm by another firm, aligns with existing Section 188 of the Income-Tax Act, 1961 but features simplified linguistic construction. Expressing their concurrence with the justification given by the Department of Revenue in this regard, the Committee accept Clause 328 as it is.

357.

329.5

329

Noting that Clause 329 of the Bill, dealing joint and several liability of partners for tax payable by firm, is a textual simplification of Section 188A of the Income- Tax Act, 1961 with the same intent, the Committee accept the Clause in its present form.

358.

330.5

330

The Committee note that Clause 330 outlines the framework for assessment and liability in the hands of the firm even after its dissolution or discontinuance of the business, aligns with the existing Section 189 of the extant Act and involves no policy shift. The Committee, therefore, accept Clause 330 as proposed by the Department of Revenue.

359.

331.6

331

Clause 331 of the Bill governs the conditions of liability of partners of limited partnership in liquidation. The Committee note that this Clause is simplified textual version of existing Section 167C of the Income-Tax Act, 1961 maintaining Government original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 331 as proposed.

360.

332.6.1

332.6.2

332

The Committee notes that Clause 332 of the Bill, intended to simplify the registration of non-profit organizations by using consistent terminology, aligns with Sections 12A and 12AB of the existing Act. However, a significant concern has emerged among Non-Profit Organizations (NPOs), particularly those with mixed charitable and religious objectives, regarding the interpretation of "wholly for charitable or religious purposes" in Clause 332. Despite Ministry assurances that mixed-object trusts are intended to be included, the current wording creates confusion. This ambiguity could lead to uncertainty for existing trusts seeking renewal, issues for those established after 1961, and a heightened risk of litigation. Concerns also exist about the inadvertent exclusion of legitimate trusts with minor related activities, and a lack of clarity on how "wholly" will be defined and applied, especially for trusts with evolving activities.

The Committee acknowledge the Ministry of Finance's recognition of this confusion and its commitment to redraft Clause 332 to remove ambiguity, viewing this as a positive and necessary step. In view of this, the Committee recommend to redraft the Clause 332 suitably.

361.

333.5

333

Clause 333 of the Income-Tax Bill 2025, which provides for switching over of regimes by a registered non-profit organization, corresponding to Section 11(7) of the Income-Tax Act, 1961. The Committee find that this Clause has been reformulated by paraphrasing the existing provisions to enhance clarity and comprehension. Furthermore, having been assured that no policy change has been incorporated in this Clause, the Committee approve Clause 333 as it is.

362.

334.5

334

The Committee note that Clause 334 of the Bill consolidates provisions of the Income-Tax Act 1961 which provides for taxability of income of a registered non-profit organization. Recognizing textual simplification, no policy change and retaining original intent in this Clause, the Committee accept the Clause as proposed by the Department of Revenue.

363.

335.6.1

335.6.2

335.6.3

335

The Committee observe that Clause 335 of the Bill introduces the concept and meaning of "regular income" for registered non-profit organizations, a provision currently absent from the Income-Tax Act, 1961. This new concept is designed to streamline the taxability of such entities.

The Committee. during deliberations, carefully considered various suggestions from stakeholders and experts regarding this clause. Following a review of these suggestions and the Ministry's response, the Committee note that the Bill uses the term "receipts" where the existing Income-Tax Act, 1961, used "income." The Committee express strong concern that taxing "receipts" contravenes the principle of real Income-Taxation, as "receipts" can include capital recoveries or gross inflows, which do not necessarily represent net income. For the purposes of taxation and accumulation, the Committee firmly believe that rules should ideally apply to net income, not gross receipts. Therefore, the Committee recommend the reintroduction of the term "income" in Clause 335. This amendment is critical to ensure that only the net income of a registered non-profit organization is considered for taxation and accumulation.

Subject to this amendment, the Committee approve Clause 335 of the Bill, underscoring the necessity for appropriate modifications to align with this recommendation.

364.

336.6

336

The Committee observe that Clause 336 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 11(1) of the Act regarding the taxable regular income of a registered non-profit organization. After considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 336 as proposed.

365.

337.6.1

337

The Committee's examination of Clause 337 of the Bill, which pertains to the "specified income" of registered non-profit organizations (NPOs) and mirrors Section 115BBI of the existing Income-Tax Act, 1961, reveals a significant divergence in the treatment of anonymous donations. While the Bill's stated aim is textual simplification, the Committee
observe a critical omission concerning religiouscum-charitable trusts, which could have substantial adverse impacts on a large segment of India's NPO sector.

337.6.2

Under the proposed Clause 337 (read with its "Table of Specified Income"), a flat 30% tax is imposed on anonymous donations received by all registered nonprofit organizations, with a narrow exemption extended only to those established wholly for religious purposes. This marks a stark departure from the current Section 115BBC of the Income-tax Act, 1961. The existing law provided a more comprehensive exemption: anonymous donations were not taxed if received by any trust or institution created or established wholly for religious and charitable purposes, unless such a donation was specifically directed towards a university, educational institution, hospital, or medical institution run by that same trust or institution.

337.6.3

The Committee emphasize that the classification within the erstwhile Section 115BBC was highly pertinent to the Indian context, acknowledging the prevalent hybrid nature of numerous trusts that seamlessly blend religious and charitable activities. This previous provision legitimately recognized these "religious-cum-charitable" entities as a distinct and
valid class eligible for concessions on anonymous donations, understanding that such organizations often receive contributions through traditional means (like donation boxes) where donor identification is practically impossible.

337.6.4

Therefore, to maintain consistency with the historical understanding of NPO operations in India, prevent unintended taxation burdens on genuine organizations, and uphold the intent of supporting both religious and charitable endeavors, the Committee strongly urge the reintroduction of a provision analogous to the explanation found in Section 115BBC of the 1961 Act. This reintroduction would explicitly recognize religious-cum-charitable trusts as a legitimate category eligible for concessions on anonymous donations. Subject to this recommendation, the Committee approve Clause 337 as proposed.

366.

338.6

338

The Committee note that Clause 338 of the Bill addresses the income categories that are specifically excluded from the "regular income" of a registered non-profit organization. This clause corresponds directly to Section 11(1)(c) of the existing Income-Tax Act, 1961. The Committee also note that the Bill has textually simplified the provisions of the corresponding existing section while retaining its original intent. After thoroughly considering the viewpoints presented by both stakeholders and the Department, the Committee accept Clause 338 as proposed.

367.

339.6

339

The Committee note that Clause 339 of the Bill defines "corpus donation" for registered non-profit organizations, directly aligning with Section 11(1)(d) of the existing Income-Tax Act, 1961. The Committee also note that the Bill simplifies the language of the corresponding section while preserving its original intent. Having thoroughly reviewed the perspectives of both stakeholders and the Department, the Committee accept Clause 339 as proposed.

368.

340.5

340

The Committee note that Clause 340 of the Bill provides for deemed corpus donation of a registered non profit organisation, corresponding to directly aligning with section 11(1) Explanation 3A of the existing Income-Tax Act, 1961. The Committee also note that the Bill simplifies the language of the corresponding section while preserving its original intent. After examining the perspectives of both stakeholders and the Department, the Committee accept Clause 340 as proposed.

369.

341.6.1

341

The Committee note that Clause 341 of the Bill, which deals with the application of income for a registered non-profit organization, corresponds to Explanations 4 and 5 of Section 11(1) of the existing Income-Tax Act, 1961. The Committee acknowledge that the Bill has textually simplified these provisions while intending to retain their original meaning.

341.6.2

During deliberations, the Committee considered various suggestions from stakeholders and experts, as well as the Department's responses. A significant concern raised by a stakeholder was that the new clause on the application of income does not provide for "deemed application" as was present under Explanation 2 of Section 11 of the Income-Tax Act, 1961. The stakeholder emphasized the critical need to include this deemed application provision, as it addressed situations where NPOs could not receive amounts (e.g., due to disputes) or received them very late in the financial year, making it impossible to "apply" such income within the prescribed timeframe. The absence of this clause, it was argued, would create significant practical difficulties for NPOs.

341.6.3

In response, the Department stated that the stakeholder's suggestion implies allowing registered NPOs to treat donations made to other registered NPOs out of accumulated income as applied, at least for the first year of accumulation. The Department highlighted that consolidating the income accumulation regime into a single mode aims to
reduce administrative burdens and simplify compliance. They further explained that the previous framework's distinct one-year and five-year accumulation procedures often led to denials due to erroneous entries. However, the Department has noted the stakeholder's suggestion for further consideration. The Committee, therefore, recommend to retain the existing provision of Explanation 2 of Section 11 of the Income-Tax Act, 1961 related to deemed application in Clause 341.

370.

342.6

342

The Committee note that Clause 342 of the Bill, which pertains to the accumulated income of a registered non-profit organization, aligns with Section 11(2) and Section 11(3A) of the existing Income-Tax Act, 1961. The Bill aims to simplify these provisions while retaining their original intent. Given the views of stakeholders and response of the the Ministry of Finance (Department of Revenue), the Committee accept the clause as proposed.

371.

343.6

343

The Committee note that Clause 343 of the Bill addresses "deemed accumulated income" for registered non-profit organizations. While not directly corresponding to a single section of the existing Income-Tax Act, 1961, this clause consolidates provisions previously found in Section 11(1)(a), 11(1)(b), and Section 13(1)(d), which allowed the setting aside or accumulation of up to 15% of income from property held under trust. The Bill aims to simplify this by retaining the original intent through textual simplification. After reviewing stakeholder and Department viewpoints, the Committee accept Clause 343 as proposed.

372.

344.6

344

The Committee note that Clause 344 of the Bill provides for business undertaking held as property of a registered non-profit organisation. The clause corresponds to section 11(4) of the Act. The provisions of the existing section have been textually simplified and retained with the same intent in this clause. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 344 as proposed.

373.

345.6.1

345

The Committee observe that Clause 345 of the Bill addresses restrictions on commercial activities for registered non-profit organizations, directly aligning with Section 11(4A) of the existing Income- Tax Act, 1961. The Bill aims to simplify the text of the existing section while maintaining its original intent.

345.6.2

In the course of examination of the Bill, the Committee considered stakeholders suggestions and the Department's response. One stakeholder proposed rewording the clause to state: "No registered non-profit organisation, other than a registered non-profit Organization carrying out advancement of any other object of general public utility, shall carryout any commercial activity unless—(a) such commercial activity is incidental to the attainment of the objectives of the registered non- profit organisation; and (b) separate books of account are maintained for such activities." The Department has acknowledged this drafting error in the original Bill, agreeing to remove the comma after "other than a registered non-profit organisation" to rectify it.

345.6.3

The Committee, therefore, recommend implementing this specific drafting correction. Aside from this amendment, the Committee approve Clause 345 as proposed.

374.

346.5

346

The Committee note that Clause 346 of the Income- Tax Bill, 2025, mapped to Section 13(8) of the Income- Tax Act, 1961, provides for restriction on commercial activities of a registered non-profit organisation which has advancement of any other object of general public utility as any of its objects. The Committee approve Clause 346 as proposed, noting its simplified approach to existing provisions.

375.

347.6

347

The Committee note that Clause 347 of the Bill simplifies and maintains the intent of Section 12A(1)(b) of the Act, which governs the books of account for registered non-profit organizations. Stakeholders have raised concerns about the stringent requirement to record the name and address for every credit or payment, even for petty expenses below a suggested threshold of Rs. 10,000 (e.g., auto fares, water, small pooja items, vegetables from street vendors, milk for Annadhan). They argue that this is practically unfeasible. The Department clarifies that this suggestion pertains to Rule 17AA, a matter of delegated legislation and thus outside the Bill's purview. The Committee, therefore, accept the Clause 347 as proposed.

376.

348.6

348

The Committee note that Clause 348 of the Bill provides for audit of a registered non-profit organisation. The clause corresponds to Section 12A(1)(b) of the Income-Tax Act, 1961. The provisions of the existing section have been textually simplified and retained with the same intent in this clause. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 348 as proposed.

377.

349.6

349

The Committee note that Clause 349 of the Bill, which pertains to the return of income for registered non-profit organizations, aims to simplify the text of the existing Section 12A(1)(ba) of the Income-Tax Act, 1961 while maintaining its original intent. However, a stakeholder pointed out an omission: when a non-profit's income (prior to applying certain provisions) exceeds the tax-exempt threshold, its return should be furnished not only as per Section 263(1)(a)(iii) and within the timeline of Section 263(1)(b), but also in the manner prescribed by Section 263(2) to enable online filing. The the Ministry of Fiannce (Department of Revenue) has acknowledged this as a drafting error, confirming that Clause 263(2) specifies the form and manner of return submission, a detail missing in the current corresponding section for NPOs (formerly Section 139(4A) of the IT Act). Consequently, the Committee approve Clause 349 as proposed, with a specific recommendation to incorporate this necessary drafting correction.

378.

350.6

350

The Committee note that Clause 350 of the Bill provides for permitted modes of investment. The clause corresponds to section 11(5) of the Act. The modes of investing or depositing the money has been specified in Schedule XVI of the Bill. This Schedule consolidates modes of investing or depositing appearing in section 11(5), rule 17C, section 13(1)(d) and section 10(23C) of the Act. Further, the provisions of the existing section have been textually simplified and retained with the same intent in this clause. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 350 as proposed.

379.

351.6

351

The Committee note that Clause 351 of the Bill addresses specific violations by registered non-profit organizations. It simplifies and retains the original intent of sections 12AB(4), the Explanation to section 12AB(4), and section 12AB(5) of the Income-Tax Act, 1961. After reviewing stakeholders inputs and the Department's response, the Committee approve Clause 351 as proposed.

380.

352.6

352

The Committee note that Clause 352 of the Bill addresses the tax on "accreted income" of registered non-profit organizations, consolidating and simplifying the provisions of Sections 115TD, 115TE, and 115TF of the existing Income-Tax Act, 1961. The Bill retains the original intent while rationalizing provisions to clearly specify chargeability, due dates for payment, and applicability of collection/recovery proceedings for such income. After considering stakeholders’ and Department’s viewpoints, the Committee accept Clause 352 as proposed.

381.

353.6

353

The Committee note that Clause 353 of the Bill provides for other violations of a registered non-profit organizations, aligns with Section 13(10) and Section 13(11) of the Income-Tax Act, 1961. Stakeholders have suggested incorrect referencing in Clause (28) and a limited scope in Clause (30, leading to recommendations for modifications to refer to Clauses (26) and (27) and Clauses (1) to (29) respectively. The Ministry has accepted this, clarifying the correct clause in the Bill is 350 and not 353. Furthermore, the stakeholder suggested either deleting the 14-day period reference or adding "whichever is later" to remove the ambiguity created by multiple due dates. The Ministry has also accepted this for clarity, noting the correct clause in question is Section 352(5). The Committee, therefore, recommend implementing these amendments and approve Clause 353 subject to these changes.

382.

354.6

354

The Committee observe that Clause 354, which pertains to exemption for donations and largely retains the intent of Section 80G(5) of the existing Act with textual simplification, has a drafting error in Sub-Clause (1) where Schedule III is incorrectly referenced instead of Schedule VII, an error the Department has acknowledged. Therefore, the Committee approve the Clause 354 subject to the aforesaid drafting correction.

383.

355.6

355

The Committee acknowledge that Clause 355, which defines various terms within Chapter XVII-B, does not have corresponding section in the Income-Tax Act, 1961. This new clause serves to centralize and streamline definitions pertinent to registered non- profit organizations. After careful deliberation of both stakeholder and Departmental perspectives

384.

356.6

356

The Committee note that Clause 356 of the Bill seeks to provide for appeals to Joint Commissioner (Appeals) against certain orders, aligns with the provisions of Section 246 of the Act, 1961. The Committee also note that the textual simplification of Clause 356 is as per the objectives of the Bill and retaining the same intent of existing Section. The Committee, after consideration of views of stakeholders and the Department’s responses, accept the Clause as proposed.

385.

357.6

357

The Committee note that Clause 357 of the Bill seeks to provide for appeals to Commissioner (Appeals) against certain orders, corresponding to Section 246A of the Act, 1961. The Clause has been textually simplified while retaining the intent. Some important suggestions on the Clause 357 have been received viz. option for physical CIT appeal rather than faceless appeal for faster disposal of appeal; facility for video hearings and a study for evaluating the faceless system of CIT (Appeal). The Ministry has noted these suggestions. The Committee also note that the Department of Revenue has accepted the suggestion to define the term “status” in Clause 357 as well in the line of Clause 356. The Committee find merit in the suggestion that term “status” should be defined in Clause 357 for appeal before CIT(A). Therefore, the Committee recommend to amend the Clause as accepted by the Department. Apart from the above drafting correction, the Committee accept the Clause as proposed.

386.

358.6

358

The Committee note that Clause 358 of the Bill prescribes form of appeal and limitation, aligns with Section 249 of the existing Act. The Department justifies this as textual simplification, not a policy change. However, the drafting error i.e. omission of the word “rupees” after the words “five hundred” in Clause 358(2)(b), as pointed out by the Committee, has been accepted by the Department of Revenue. They, therefore, recommend the Department to carry out the aforesaid drafting correction. Apart from the above drafting correction, the Committee accept the Clause as proposed.

387.

359.6

359

The Committee observe that Clause 468 of the Income-Tax Bill, 2025, which outlines the procedure for appeals, largely mirrors Section 250 of the Income-Tax Act, 1961, with no substantive policy changes introduced beyond textual simplification. After extensive and in-depth deliberations, the Committee have considered various perspectives and proposals from stakeholders and experts, alongside justifications and clarifications provided by the Department of Revenue regarding Clause 359 of the Bill. Accordingly, the Committee accept Clause 359 as originally proposed.

388.

360.6

360

The Committee note that Clause 360 of the Income- Tax Bill, 2025, a textual simplification of Section 251 of the Income-Tax Act, 1961, deal with the powers of Joint Commissioner (Appeals) or Commissioner (Appeals). They also note that, apart from textual simplification, no policy change has been introduced in this Clause. They, therefore, accept Clause 360 as proposed by the Department of Revenue.

389.

361.6

361

The Committee note that Clause 361, a textual simplification of Section 252 of the Income-Tax Act, 1961, seeks to provide for constitution of Income-Tax Appellate Tribunal. After thorough deliberations, and having considered various suggestions from stakeholders and experts, as well as the rationales and clarifications submitted by the Department of Revenue, the Committee recommend accepting the Clause in its entirety without any changes.

390.

362.6

362

The Committee note that Clause 362 of the Income- Tax Bill, 2025 seeks to provide for appeals to the Income-Tax Appellate Tribunal, akin to Section 253 of the Income-Tax Act, 1961. They further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

391.

363.6

363

The Committee note that Clause 363 of the Income- Tax Bill, 2025 seeks to provide for the orders passed by the Income-Tax Appellate Tribunal which corresponds to Section 254 of the extant Act. The Committee also note that, apart from textual simplification, no policy change has been introduced in this Clause. Having held comprehensive deliberations on this Clause, and taking into account all suggestions and comments received from stakeholders and experts, along with the Department of Revenue's justifications, the Committee accept Clause 363 as proposed by the Department.

392.

364.6

364

The Committee note that Clause 364 of the Income- Tax Bill 2025, mirroring Section 255 of the extant Income-Tax Act, 1961, defines the powers and functions of the Income-Tax Appellate Tribunal (ITAT). Currently, it allows the ITAT to dispose of cases where the Assessing Officer's computed total income does not exceed fifty lakh rupees. The Committee, note that there is no policy change in this regard and after considering the views of the stakeholders as well as the response of the Department, accept Clause 364 as originally proposed.

393.

365.6

365

The Committee observe that Clause 365 of the Bill, 2025 textually simplifies and retains the intent of Section 260A of the Act, 1961 regarding provision for appeals to the High Court. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee
accept Clause 365 as proposed.

394.

366.6

366

The Committee note that Clause 366 of the Bill, a textual simplification of Section 260B of the existing Act, stipulates that appeals to the High Court to be heard by not less than two judges, with no change in underlying policy. The Committee have considered stakeholder suggestions for this clause but ultimately found them unfeasible, aligning with the Department's rationale. As a result, the Committee accept the Clause in its current format.

395.

367.6

367

The Committee observe that Clause 367 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 261 of the Act regarding appeals to Supreme Court. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 367 as proposed.

396.

368.5

368

The Committee observe that Clause 368 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 262 of the Act regarding hearing before the Supreme Court. They also note that no policy change has been effected by the Department; and only a textual simplification of the current Act. The Committee, therefore, accept Clause 368 as proposed.

397.

369.5

369

The Committee note that Clause 369 of the Income- Tax Bill, 2025 seeks to provide that tax to be paid irrespective of filing of appeal before High Court or Supreme Court, aligns with Section 265 of the Income-Tax Act, 1961. The Department confirms this is a rephrasing, not a policy change. The Committee, therefore, accept Clause 369 as proposed.

398.

370.5

370

The Committee note that Clause 370 of the Income- Tax Bill, 2025, which seeks to provide for execution for costs awarded by Supreme Court, is in consonance with objectives of the Bill, therefore, the Clause may be made part of the Bill, as proposed by the Department.

399.

371.5

371

The Committee note that Clause 371 of the Income- Tax Bill, 2025 provides for amendment of assessment on account of appeal in certain cases, akin to Section 267 of the Income-Tax Act, 1961. They further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

400.

372.5

372

The Committee observe that Clause 372 of the Income-Tax Bill, 2025 seeks to provide for exclusion of time taken to obtain copy of the order by the assessee which corresponds to Section 268 of the current Act. The Committee further note that, apart from textual simplification, no policy change has been introduced in this Clause. The Committee, therefore, accept Clause 372 as proposed.

401.

373.6

373

The Committee note that Clause 373 of the Income- Tax Bill, 2025 seeks to provide for filing of appeals by Income-Tax authority and empowers the Central Board of Direct Taxes to issue instructions from time to time. This Clause is similar to the provisions of existing Section 268A of the Income-Tax Act, 1961 with no policy change. After considering all viewpoints, the Committee accept Clause 373 as proposed by the Department.

402.

374.5

374

The Committee note that Clause 374 of the Income- Tax Bill, 2025 provides for the definition of “High Court” for the purpose of filing of appeal under Chapter XVIII of the Bill, akin to Section 269 of the Income-Tax Act, 1961. They further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

403.

375.5

375

The Committee observe that Clause 375 of the Income-Tax Bill 2025, mirroring Section 158A of the current Act, provides for procedure when assessee claims identical question of law is pending before High Court or Supreme Court. The Committee further note that, apart from textual simplification, no policy change has been introduced in this Clause. The Committee, therefore, accept Clause 375 as proposed by the Department of Revenue.

404.

376.5

376

The Committee note that Clause 376 of the Income- Tax Bill 2025, akin to Section 158AB of the current Act, seeks to prescribe procedure when an identical question of law is pending before High Court or Supreme Court. The Committee concurs with the Department’s justification for retaining this clause with the same intent, incorporating only textual simplification. The Committee, therefore, accept the Clause in its current form.

405.

377.6

377

The Committee note that Clause 377 of the Income- Tax Bill, 2025, which corresponds to Section 263 of the Income-Tax Act, 1961, provides for revision of orders prejudicial to Revenue by Principal Commissioner or Commissioner. After considering all viewpoints; and given that this Clause is similar to the existing Section 263 with no policy change, the Committee recommend to accept the Clause as proposed by the Department in the proposed Act.

406.

378.6

378

The Committee observe that Clause 378 of the Bill, 2025 textually simplifies and maintains the intent of Section 264 of the current Act which allows for revision of orders not prejudicial to revenue. Currently the time limit for filing revision application is one year. While the current time limit for filing a revision application is one year, a stakeholder suggested extending this to two years for uniformity with Clause 377. The Department have, however, stated this constitutes a policy change beyond the Bill's scope. The Committee further note the inclusion of sub-clause (9) of Clause 378 in this Bill, which is absent in the current Act. The Department have clarified that this sub-section ensures a minimum of 60 days for passing an order after receiving a court order. After considered the views of the stakeholder as well as the response of the Department, the Committee accept Clause 378 as proposed.

407.

379.6

379

The Committee notes that Clause 379 of the Income- Tax Bill, 2025, textually simplifies Section 245MA of the Income-Tax Act, 1961, provides for constitution of Dispute Resolution Committee (DRC) to resolve disputes in certain cases, with no policy change. The Committee, after considering the views of the stakeholder as well as the response of the Department, accept Clause 379 as originally proposed.

408.

380.5

380

Clause 380 of the Income-Tax Bill 2025, which seeks to define certain expressions used in the context of Advance Rulings, corresponding to Section 245N of the Income-Tax Act, 1961. The Committee find that this Clause has been reformulated by paraphrasing the existing provisions to enhance clarity and comprehension. Furthermore, having been assured that no policy change has been incorporated in this Clause, the Committee approve Clause 380 as it is.

409.

381.6

381

Clause 381 provides for constitution of Board for Advance Rulings. The Committee note that this Clause is simplified textual version of existing Section 245-OB maintaining Government original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 381 as proposed.

410.

382.5

382

The Committee note that Clause 382 of the Bill dealing with proceeding in case of vacancies in the Board for Advance Rulings, aligns with existing Section 245P but features simplified textual construction. Expressing their concurrence with the justification given by the Department of Revenue in this regard, the Committee accept Clause 382 as it is.

411.

383.6

383

The Committee observe that Clause 383, textually simplifies Section 245Q of the Income-Tax Act, 1961, outlining procedures for filing of application before the Board for Advance Rulings. The Committee also note that while Rule 44E(4) currently prescribes fees, a suggestion to remove the archaic term 'quadruplicate' from sub-clause 2 of Clause 383 (already removed from Rule 44E with effect from 5 May, 2022) has been accepted by the Department. Furthermore, the Committee have identified an ambiguity between sub-clause (2) of Clause 383, which stated 'a fee of ten thousand rupees or such fee, as prescribed,' and the corresponding Section 245Q(2) of the Act, which specified 'ten thousand rupees or such fee as may be prescribed... whichever is higher.' Upon the Committee's insistence to clarify this ambiguity, which posed risks of revenue loss and misinterpretation, the Department has agreed to remove the phrase 'ten thousand' from Clause 383(2), ensuring fees are prescribed by Rule only. Accordingly, the Committee recommend to carry out the drafting correction and amend the sub-clause (2) of Clause 383 as under:-

“(2) The application shall be made accompanied by such fee, as prescribed”.

Apart from the above drafting correction, the Committee accept Clause 383 as proposed by the Department.

412.

384.6

384

The Committee note that Clause 384 of the Income- Tax Bill, 2025, mapped to Section 245R of the Income- Tax Act, 1961, seeks to provide for procedure to process the application made for advance rulings. The Committee approve Clause 384 as proposed, noting its simplified approach to existing provisions.

413.

385.6

385

The Committee note that Clause 385 of the Bill, which seeks to provide that certain authorities not to proceed to decide in certain cases where application for advance ruling has been made, aims to simplify the existing provisions of Section 245RR. The Committee concur with the Department’s justification for this simplification and, therefore, accept Clause 385 as proposed.

414.

386.5

386

Noting that Clause 386 of the Income-Tax Bill, 2025, which governs when an advance ruling becomes void, is a textual simplification of Section 245T of the Income-Tax Act, 1961, retaining its original intent. The Committee, therefore, accept the Clause in its present form.

415.

387.5

387

The Committee note that Clause 387, which defines the powers of the Board for Advance Rulings, aligns with the existing Section 245U and involves no policy shift. The Committee, therefore, accept Clause 387 as proposed by the Department of Revenue.

416.

388.5

388

The Committee note that Clause 388 of the Income- Tax Bill 2025 empowers the Board for Advance Rulings to regulate its own procedure, corresponds to Section 245V of the Income-Tax Act, 1961, and introduces no policy change beyond textual simplification. The Committee, therefore, approve Clause 388 as it is.

417.

389.6

389

The Committee note that Clause 389 of the Income- Tax Bill, 2025, a simplified textual version of existing Section 245W, provides for appeals to the High Court against rulings by the Board for Advance Rulings, maintaining the Government's original policy. After considering the viewpoints of both stakeholder and the Department, the Committee accept Clause 389 as proposed.

418.

390.6.1

390(2)

The Committee note that Clause 390 of the Bill pertains to the deduction or collection of tax at source and advance payment. A stakeholder has suggested rephrasing sub-clause (2) of Clause 390, as its current wording in sub-sections (1) and (2) could create ambiguity when income paid spans multiple years. The concern is that the provision might be interpreted as limiting tax deductions or payments to a single tax year, despite income often covering several tax periods. The Department has agreed to redraft the clause and align with the existing provisions of the Act. Therefore, the Committee desire that the Clause 390(2) be rephrased to make the language lucid and unambiguous, clarifying that tax provisions apply to multi-year income and can be assessed in the corresponding tax years.

419.

390.6.2

390(4)

The Committee note a stakeholder's suggestion to replace "collection" with "recovery" in Clause 390(4) of the Bill. The rationale is that "recovery" more accurately conveys the mandatory nature of tax payments, encompassing both voluntary and involuntary payments due post- assessment. The Department of Revenue has acknowledged this as a drafting issue. Given that "recovery" is already used in Section 226 of the Income-tax Act, 1961, and Clause 416 of the Income- tax Bill, 2025, the Committee recommend the Department to implement this change to ensure uniformity in language and to emphasize the mandatory aspect of tax payments.

Apart from the above mentioned drafting corrections, the Committee accept Clause 390 as proposed by the Department.

420.

391.6

391

The Committee note that Clause 391 of the Bill provides for direct tax payment by assessees when no deduction provision exists or tax hasn't been deducted under Chapter XIX, mirroring Section 191 of the current Act with simplified, yet retained, intent. A stakeholder suggested incorporating a provision in this Clause to offer relief to persons responsible for tax deduction when the assessee has already directly paid the un-deducted tax. However, the Department clarified that Clause 398(2) of the Bill already addresses this situation. Satisfied with the Department's contention, the Committee proposeno change to Clause 391(3). The Committee, therefore, approve Clause 391 as proposed.

421.

392.6.1

392

The Committee, having examined Clause 392 of the Bill (corresponding to Sections 192 and 192A of the Act concerning TDS on salary and accumulated provident fund balances), and considering stakeholder input on sub-clause 7(a), has identified a critical omission. While simplifying the text, the Department has inadvertently excluded a crucial 'Non obstante' clause. The Committee believe this oversight could lead to unnecessary speculation and ambiguity regarding the applicable TDS rate on accumulated balances from a recognized Provident Fund. Noting the Department's acceptance of this suggestion, the Committee recommend the Department to insert appropriate wording into the Clause 392(7)(a) to eliminate any such ambiguity.

422.

392.6.2

392

The Committee note numerous stakeholder suggestions highlighting the Department's omission of the crucial Section 192(6) of the existing Act from the current Clause of the Income-Tax Bill, 2025, which creates ambiguity regarding the valuation of salary paid in foreign currency. Section 192(6) of the Act clarifies that for residents receiving salary in foreign currency, the taxable amount for TDS is determined by converting the currency at prescribed rates. The Committee believe this lack of clarity on conversion rates will cause unnecessary confusion and ambiguity, potentially leading to litigation. Therefore, the Committee recommend incorporating this vital provision into the Clause of the Bill to explicitly define applicable forex conversion rates for salary income.

Apart from the above mentioned amendment, the Committee accept Clause392 as proposed by the Department.

423.

393.6

393

The Committee note that numerous suggestions have been received from various stakeholders concerning Clause 393 of the Bill, which provides for tax deduction at source on various payments. All sections in the Income-Tax Act, 1961 specifying various sums liable to TDS have been merged into a single section in the Bill providing 3 tables based on three broad categories of Payees: (i) Residents, (ii) Non-residents, and (iii) any person. The Committee observe that the clause primarily exhibits certain inconsistencies attributable to drafting oversights. After detailed, in-depth deliberation, and having considered both the views of stakeholders and the response of the Department, the Committee recommends the following revisions:-

(i) Duplication Rectification (Clause 393(1)(4)(ii)): The Committee note that "Serial Number 4 of Schedule V in the Table under the Head 'Income from Capital Market' has been referred to twice. As agreed to by the Department, this duplication may be rectified.

(ii) Threshold Limit Clarification (Clause 393(1)(6)(iii)): The Committee note that stakeholders suggested providing an independent threshold of ₹50,000 for five different sums referred to in Clause 393(1) Table Sl. No. 6(iii). While the threshold limits have been changed by Finance Act, 2025, there is a drafting error as limits have not been provided for 3 out of 5 sums. Since the threshold limits,as accepted by the Department,are to be aligned with the existing provisions of the Act, the Committee recommend to amend the clause suitably.

(iii) Tax Deduction Basis Correction (Clause 393(1) & 393(1)(8)(ii)): The Committee note that a stakeholder pointed out a contradiction: Clause 393(1) requires deduction of tax at source on the entire amount of such income or sum where it exceeds the specified threshold, while Clause 393(1)(8)(ii) specifies the rate of tax to be applied only on such sum exceeding ₹50 lakhs. The Department has acknowledged this as an inadvertent drafting error which requires redrafting to provide that TDS shall be deducted only on the sum exceeding ₹50 lakhs. Accordingly, the Committee recommend that the same may be redrafted.

(iv) "Benefit or Perquisite" Definition (Clause 393(1)(8)(iv)): The Committee note that stakeholders pointed out the ambiguity in Note 2 appended to Serial No. 8(iv) in the Table, with respect to the nature of the “benefit or perquisite” mentioned therein, as it does not explicitly clarify whether such benefits include monetary payments effected through non- cash modes like cheque, demand draft, or bank transfer. The Department has concurred with the view of the stakeholder and agreed to make drafting corrections appropriately. The Committee approve the same.

(v) Missing Notes Incorporation: The Committee observe that all sections in the Act specifying various sums liable to TDS have been merged into a single section providing 3 tables based on three broad categories of Payees. There are Notes supplied in the table itself which provide explanations specific to a clause. However, the Committee note that the following notes, as pointed out by the stakeholders, are missing, which creates ambiguity:

(a) Non-Resident Deduction Rate (Clause 393(2)): Note 2 as mentioned in Serial No. 10 and 15 in Column E of the Table under Clause 393(2), which specifies the rate of deduction of income tax when such income is credited to a non-resident.

(b) Winnings in Kind (Clause 393): Note 3 in Column D of the Table in Clause 393 related to tax deduction when the winnings are in kind.

In this regard, the Department has admitted that “Three Notes below the table in Clause 393(2) and Clause 393(3) respectively have inadvertently been missed.” The Committee, therefore, recommend rectifying this anomaly by incorporating Notes suitably in Clause 393(2) and Clause 393(3) respectively as proposed.

(vi) Inclusion of "Circular" (Clause 536(2)(j)): Responding to the suggestion that circulars/notifications providing exemption from TDS need to be incorporated in the table in Clause 393(4) of the Bill, the Department has clarified that notifications/instructions etc. have already been covered in Clause 536(2)(j) of the Bill, and the word “circular” will be considered for inclusion. As agreed to by the Department, the Committee recommend including the word "circular" in Clause 536(2)(j).

(vii) Zero Tax Liability for Senior Citizens (Income-Tax Bill, 2025): It has been brought to the notice of the Committee that provisions similar to Section 197A(1C) of the current Act for zero tax liability benefit to senior citizens are missing in the Income- Tax Bill, 2025. The Department has admitted to the inadvertent drafting error (Clause 393(6)). The Committee, therefore, recommend the Department to rectify this drafting error.

(viii) Redundant Senior Citizen Reference (Clause 393(6)): Clause 393(6) deals with entitlement for no deduction at source for such persons. A stakeholder has suggested removing the reference to senior citizens in Sl. No. 2(a) of the table below Clause 393 as senior citizens are already covered in Sl. No. 2(b) of the table. The Department has admitted to the inadvertent drafting error. Accordingly, the Committee recommend carrying out this drafting correction.

(ix) Typographical error: For Clause 393(3) in Column D at Serial No. 3 the word ‘lilmit’ may be replaced with ‘limit’.

(x) The reference of the repealed Act viz. Income-Tax Act, 1961 may be removed from the Table at sl.no.7(c)(i) in sub-clause (3) of Clause 393 and incorporated in Clause 536 which provides for Repeals and Savings.

Apart from the above drafting corrections, the Committee accept Clause 393 as proposed by the Department.

424.

394.6

394

The Committee note that Clause 394(1) of the Bill corresponds to Section 206C(1G) of the Income- Tax Act, 1961, which mandates Tax Collection at Source (TCS) on remittances for educational purposes where the funds are sourced from loans obtained from specified financial institutions. However, a stakeholder has identified a significant oversight: the Bill fails to incorporate the exemption from TCS on educational remittances that was introduced by the Finance Act, 2025.

The Committee is cognizant that, under the Liberalized Remittance Scheme, educational loans procured from specified financial institutions (as defined in Clause 129(3)(b) of the Income-Tax Bill) are exempt from TCS. Furthermore, as per the substitution made by the Finance Act, 2025, Section 206C(1G) of the Income-Tax Act, 1961, effective from April 1, 2025, explicitly states that an authorized dealer is not required to collect tax if the remitted amount is a loan obtained from a financial institution for educational pursuits.The Department has acknowledged this omission, confirming the necessity of this amendment in the Income-Tax Bill, 2025. Consequently, the Committee strongly recommend that the Departmentincorporate this crucial provision into the Bill.

Apart from this essential addition, there is a typographical error in Clause 394(1)(c) where in the phrase “cheque of a draft” the word ‘of’ may be replaced with ‘or’ . Besides the above changes, the Committee accept the Clause 394 as proposed.

425.

395.6

395

The Committee note that Clause 395 of the Bill, which simplifies and merges several Sections (195(2), 197, 197A, 203, 206C (9), 206C (10)) of the current Income Act, 1961 concerning certificates for lower tax deduction or collection. The intent remains the same.A key change in this simplification is the removal of the term "Nil deduction," previously found in Section 197 of the Act. The Department's rationale is that "Nil" is already encompassed within "lower deduction." The Committee however feel that the Department's clarification that "lower certificate" includes "Nil" creates ambiguity and could lead to administrative difficulties for taxpayers. While the Department has agreed to issue administrative instructions to clarify this, the Committee believe that simply adding the word "NIL" back into Clause 395 would more effectively resolve this confusion. After considering stakeholder input, departmental views, and extensive deliberation the Committee therefore recommender in statement of term "NIL” in the Clause.

Apart from this, the Committee accept Clause 395 as proposed

426.

396.6

396

The Committee note that Clause 396 of the Income-Tax Bill, 2025, mapped to Section 198A of the Income-Tax Act, 1961, seeks to provide the certain sums which shall be deemed as income received for the purposes of computing the income of the assessee. The Committee approve Clause 396 as proposed, noting its simplified approach to existing provisions.

427.

397.6.1

397

The Committee note that Clause 397 of the Bill, which consolidates and simplifies the compliance and reporting requirements for Tax Deducted at Source (TDS) and Tax Collected at Source (TCS), is a merger of provisions from existing Sections 200, 203A, 206AA, and 206CC of the current Act, streamlining them into a single, independent clause. Notably, the separate Tax Deduction Account Number (TAN) and Tax Collection Account Number (TCSAN) have been merged into a single "tax deduction and collection account number." The Committee also notethat the intent of the original provisions has been retained despite the textual simplification.Stakeholders, however, have raised concerns about certain discrepancies within this Clause. After considering these views and the Department's responses, the Committee recommend the following:

i. Clarity on TAN Quoting: The current drafting of Clause 397(1) (b )requires quoting the Tax Deduction and Collection Account Number (TAN) on all challans, statements, and certificates without explicitly linking it to relevant TDS and TCS provisions. The Department has acknowledged this as an inadvertent drafting error and has agreed to re-draft these provisions to align them with the current Act. The Committee concur with the Department's commitment to rectify this.

ii. Correction of Table Reference: In Clause 397(1)(c)(i), there's an incorrect reference to Sl. No. 5(ii) in the Table, which should be 6(ii). This corresponds to Section 194M of the Income-tax Act, 1961. The Department has admitted this drafting error, and the Committee expect the necessary correction to be made.

iii. Inclusion of "for such period" in Statements: Clause 397(3)(b) currently omits the phrase "for such period" when referring to the filing of TDS/TCS statements, a phrase present in Section 200(3) of the current Act. The Department has acknowledged this inadvertent drafting error and agreed to add "for such period" into Clause 397(3(b). The Committee recommend this proposed correction.

Besides these drafting corrections, the Committee approve Clause 397 as proposed.

428.

398.6

398

The Committee note that Clause 398 provides relaxation from being considered an assessee in default if the recipient of income or the buyer has taken into account that transaction in their income return; this provision, previously in Sections 201 and 206C(6A) of the existing Act, has been merged into 398(2)(b)(ii). The Committee further note two drafting errors in Clause 398. Firstly, while Clause 398(2)(b)(ii) aims to prevent an assessee from being in default, the Committee agree with stakeholders that the subsection needs to clearly specify the "amount" to be taken into account for this exemption. The Department of Revenue has acknowledged this as an inadvertent drafting error, and the Committee, therefore, recommend redrafting this clause to remove any ambiguity.

Secondly, the Committee note that Clause 398(5)(b) incorrectly refers to "Section 393(3)(f)" for filing correction statements; this should be corrected to "397(3)(f)." The Committee, therefore, recommend that the reference in Clause 398(5)(b) be replaced accordingly.

Apart from these drafting corrections, the Committee approve Clause 398 as proposed.

429.

399.5

399

The Committee note that Clause 399 seeks to provide for processing of statements of tax deduction at source and tax collection at source filed, akin to Section 200A and 206CB of the Income-Tax Act, 1961. They further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

430.

400.5

400

The Committee observe that Clause 400 of the Bill grants the Central Government the authority to ease Tax Deduction at Source (TDS) and Tax Collection at Source (TCS)regulations. This clause aligns with several current provisions in the existing Act. Specifically, the provisions allowing for the exemption of certain persons or classes of persons from TDS/TCS, previously detailed in sections 195(7), 197(2A), 197A(1F), 206C(11), and 206C(12) of the Act, have been unified into this new Clause 400. As a result of this merger of TDS and TCS provisions within this single clause, the Committee approve Clause 400 as proposed by the Department of Revenue.

431.

401.6

401

The Committee note that Clause 401 of the Income-Tax Bill, 2025 aims to simplify the text while preserving the original intent of Section 205 of the Income Act, 1961, which bars the demand on an assessee to the extent tax has been deducted. After considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 401 as proposed.

432.

402.6

402

The Committee note that Clause 402 of the Bill aims to consolidate and simplify definitions for expressions used in the chapter on collection and recovery of tax, improving readability while retaining the original intent of existing provisions. However, based on feedback from stakeholders and experts, the Committee recommend following to improve clarity:-

(i) The Committee note that the definition of "an incorrect claim apparent from any information in the statement" in Clause 402(3) is incomplete due to the omission of TCS statements, an acknowledged drafting error by the Department. The Committee, therefore, recommend that this definition be suitably amended to include TCS-related provisions, aligning with Section 206CB of the Income-tax Act, 1961.

(ii) The Committee also note a stakeholder's concern regarding the clarity of the "unladen weight" definition in Clause 58(10)(d) and the suggestion to restrict its application to road rollers and tractors. The Department has accepted this concern; and agreed to add the words “as the case may be” to provide better clarity and to align it with the existing provisions of the Act. The Committee concur with the Department's submission.

(iii) The Committee further note the inadvertent insertion of the definition of "authorized person" in Clause 402(27)(g)(iii), which appears to be a typographical error. As agreed by the Department, the Committee recommend omitting this definition from Clause 402(27)(g)(iii).

(iv) The phrasing of Clause 402(27)(b), which defines "person responsible for paying" for "Interest on securities" (excluding government payments), is incorrect and unclear, likely causing confusion. A stakeholder provided a re-drafted versionas: "in the case of payments of income chargeable under the head “Interest on securities”, other than payments made by or on behalf of the Central Government or State Government- (i) local authority (ii) corporation or (iii) company, including the principal officer thereof”, which the Department has agreed to adopt. Accordingly, the Committee recommend that Clause 402(27)(b) be rephrased.

(v) Typographical error: For Clause 402(2 )(a) the word ‘situate’ may be replaced with ‘situated.’

Besides these recommended drafting corrections, the Committee accept Clause 402 as
proposed.

433.

403.6

403

The Committee observe that Clause 403 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 207 of the Income-Tax Act, 1961 regarding liability for payment of advance tax. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 403 as proposed

434.

404.5

404

The Committee observe that Clause 404 of the Bill provides for conditions of liability to pay advance tax which corresponds to Section 208 of the extant Act. They note that, apart from textual simplification, no policy change has been introduced in this Clause. They, therefore, accept Clause 404 as proposed by the Department of Revenue.

435.

405.5

405

The Committee note that Clause 405 of the Bill provides for computation of advance tax, akin to 209 of the Income-Tax Act, 1961 with no policy change. They, therefore, approve Clause 405 as proposed by the Department of Revenue.

436.

406.5

406

The Committee observe that Clause 406 deals with payment of advance tax by assessee on his own accord which corresponds to Section 210 of the extant Act. They note that, apart from textual simplification, no policy change has been introduced in this Clause. They, therefore, accept Clause 406 as proposed by the Department of Revenue.

437.

407.6

407

The Committee observe that Clause 407 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 210 of the Income-Tax Act, 1961, with no policy change, regarding payment of advance tax by assessee in pursuance of order of Assessing Officer. Further, the Committee notice that the Department of Revenue has accepted the drafting error concerning replacement of “and” with “or” in the sub-clause (9) in Clause 407. The Committee, therefore, recommend that this drafting correction be made in the Clause.

438.

408.5

408

The Committee note that Clause 408, which outlines the installments of advance tax and due dates, aligns with Section 211 of the Income-Tax Act, 1961. The Committee concurs with the Department’s justification for retaining this clause with the same intent, incorporating only textual simplification. The Committee, therefore, accept the Clause in its current form.

439.

409.6

409

Clause 409 prescribes condition when assessee is deemed to be in default, aligns with Section 218 of the existing Act. From the justification submitted by the Department of Revenue, the Committee observe that no policy change has been proposed in this Clause. Only textual simplification has been carried out while retaining the intent. However, the Committee find an error in the margin title of Clause 409, which incorrectly states "when assessee is considered to be in default" instead of "When assessee is deemed to be in default." The Department has acknowledged and accepted this drafting error. Therefore, the Committee recommend that this specific drafting correction be made in Clause 409. Apart from this drafting correction, the Committee approve the Clause 409 as proposed.

440.

410.6

410

The Committee observe that Clause 410 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 219 of the Act regarding credit for advance tax. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 410 as proposed.

441.

411.6

411

The Committee has examined Clause 411 of the Income-Tax Bill, 2025, which addresses the credit for advance tax. They observe that this clause textually simplifies Section 219 of the existing Act while maintaining its original intent. No policy change is introduced in this provision. The reference of the repealed Act viz. Income-Tax Act, 1961 may be removed from sub-clause (6) of Clause 411 and incorporated in Clause 536 which provides for Repeals and Savings. After having considered feedback from stakeholders and the Department's response, the Committee concur with the views of the Department and accept Clause 411 subject to the above drafting corrections.

442.

412.5

412

The Committee note that clause 412 corresponding to tion 221 of the Income-Tax Act,1961,seeks to provide penalty payable when tax in default. Recognizing ual simplification, no policy change and retaining inal intent in the Clause, the Committee accept the se as proposed by the Department of Revenue.

443.

413.5

413

The Committee note that Clause 413 of the Income- Tax Bill 2025, mirroring Section 222 of the Income- Tax Act, 1961, deals with provisions for certificate by Tax Recovery Officer and Validity thereof. The Committee further note that, beyond textual simplification, no policy change has been introduced in the provisions of this Clause. They, therefore, approve Clause 413 as proposed by the Department.

444.

414.5

414

The Committee note that Clause 414 of the Bill dealing with provisions for the Tax Recovery Officer by whom recovery is to be effected, aims to simplify the existing provisions of Section 223 of the current Act with no policy change. In place of words “by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner”, the words “by an income-tax authority not below the rank of Commissioner” have been substituted for simplification. The Committee, therefore, accept Clause 414 as proposed as it meets its objectives.

445.

415.5

415

The Committee note that Clause 415 provides for stay of proceedings in pursuance of certificate and amendment or cancellation thereof, aligns with the existing Section 225 and involves no policy shift. They, therefore, accept Clause 415 as proposed by the Department of Revenue.

446.

416.6

416

The Committee observe that Clause 416 provides for other modes of recovery. aligning with Section 226 of the Income-Tax Act, 1961. The Clause has been only textually simplified, retaining its original intent. However, the Committee note that inadvertent omission of “clause (g)” in sub-clause 416(5)(h) has been accepted by the Department of Revenue. The Committee, therefore, recommend the Department to amend Clause 416 accordingly.

447.

417.5

417

The Committee observe that Clause 417, which deals with recovery through State Governments, corresponding to Section 227 of the existing Act, and incorporates no policy changes. Given this, the Committee recommend that the Clause be retained as proposed.

448.

418.5

418

The Committee note that Clause 418 provides for recovery of tax in pursuance of agreements with foreign countries. They observe that the Department’s submission indicates no policy change has been occurred; rather the provisions have been merely simplified textually from the existing Section 228A. The Committee, therefore, recommend that the Clause may be made part of the Bill, as proposed by the Department.

449.

419.6

419

The Committee note that Clause 419 of the Bill, which addresses the recovery of penalties, fines, interest, and other sums, corresponds to Section 229 of the existing Act. The Committee also note that there is no policy change proposed, and the existing provisions have been textually simplified while retaining their original intent.

Regarding the suggestion from expert/stakeholder to specifically include the word "fee" in Clause 419, the Committee are given to understand that the phrase "Any sum imposed by way of interest, fine, penalty, or any other sum" is consistent throughout the Bill and represents a settled position of law with no documented litigation concerning the non-inclusion of "fee." The Department has further stated that "any other sum" is broad enough to cover any unmentioned sums, given the dynamic nature of the economy. However, the Department is also committed to examine the suggestion further in consultation with the Ministry of Law and Justice. Given the Department's assurance that "any other sum" adequately covers "fee" and their commitment to further examination with the Department of Law, the Committee, for now, accept Clause 419 as proposed.

450.

420.5

420

The Committee note that Clause 420 of the Bill ides for tax clearance certificate, corresponding to tion 230 of the existing Act. They also note that no cy change has been effected by the Department; and a textual simplification of the current Act. The mittee, therefore, accept Clause 420 as proposed.

451.

421.5

421

Clause 421 of the Income-Tax Bill 2025, corresponding to Section 232 of the Income-Tax Act, 1961, seeks to provide that recovery by suit or under other law will not be affected notwithstanding tax due being recovered under any mode prescribed in the proposed legislation. The Committee further note that, beyond textual simplification, no policy change has been introduced in the provisions of this Clause. They, therefore, approve Clause 421 as proposed by the Department

452.

422.5

422

Noting that Clause 422 of the Bill, which seeks to provide for recovery of tax arrears from a non- resident from his assets, is a textual simplification of Section 173 of the Income-Tax Act, 1961 with the same intent, the Committee accept the Clause in its present form.

453.

423.5

423

The Committee note that Clause 423 of the Bill, prescribing interest for defaults in furnishing return of income, aligns with existing Section 234A of the Income-Tax Act, 1961; but features simplified linguistic construction. Expressing their concurrence with the justification given by the Department of Revenue in this regard, the Committee accept Clause 423 as it is.

454.

424.5

424

The Committee note that Clause 424 of the Bill, cribing interest for defaults in payment of advance aims to simplify the existing provisions of Section B of the Act by providing formula to calculate the rest for defaults in payment of advance tax for better prehension. The Committee concur with the artment’s justification for this simplification and, efore, accept Clause 424 as proposed.

455.

425.5

425

The Committee note that Clause 425 of the Income-Tax Bill, 2025, mapped to Section 234C of the Income-Tax Act, 1961, prescribes interest for deferment of advance tax. The Committee approve Clause 425 as proposed, noting its simplified approach to existing provisions.

456.

426.5

426

The Committee observe that Clause 426 of the Bill prescribes interest on excess refund which corresponds to Section 234D of the extant Act. They note that, apart from textual simplification, no policy change has been introduced in this Clause. They, therefore, accept Clause 426 as proposed by the Department of Revenue.

457.

427.6

427

The Committee observe that Clause 427 of the Bill, which provides for fees for default in furnishing statements and corresponds to Section 234E of the Income-Tax Act, 1961, requires a drafting correction. A stakeholder highlighted that Clause 427(1) omits a necessary reference to Section 394(1)(c), which deals with tax collection, despite Clause 427(2)(a) using the term "collectible." The Department has accepted this as a valid correction, agreeing to add the reference to Section 394(1)(c) in Clause 427(1), and the Committee therefore recommend to carry out the drafting correction. Apart from this, they accept the Clause 427 as proposed.

458.

428.5

428

The Committee note that Clause 428 of the Bill pertains to refunds, aligns with the provisions of Section 234F of the Income-Tax Act, 1961. The Committee also note that the textual simplification of clause 428 is as per the objectives of the Bill and retaining the same intent. The Committee, therefore, accept the Clause as proposed.

459.

429.5

429

The Committee note that Clause 429 is in consonance objectives of the Bill, therefore, the Clause may be e part of the Bill, as proposed by the Department.

460.

430.6

430

Clause 430 of the Bill deals with fee for default relating to intimation of Aadhaar number. The Committee note that this Clause is simplified textual version of existing Section 234H of the extant Act and retaining the same intent. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 430 as proposed.

461.

431.4

431

The Committee note that Clause 431 pertains to refunds and aligns with the provisions of Section 237 of the Income-Tax Act, 1961. The Committee also note that the textual simplification of Clause 431 is as per the objectives of the Bill and retains the same intent. The Committee, therefore, accept the Clause as proposed.

462.

432.6

432

The Committee note that Clause 432 textually simplifies and retains the same intent of Section 238 of the extant Act. However, few typographical errors in Clause 432 (1) which has been accepted by the Department of Revenue, necessitates an amendment. Therefore, the Committee recommend to amend the Clause accordingly. The amended Clause may be read as under:

432(1) Where the income of one person is included in total income of any other person under any provision of this Act, the latter shall be eligible for a refund under this Chapter in respect of such income.

463.

433.6

433

The Committee note that the suggestion to allow refunds in case of late/revised income tax returns filed due to exceptional/emergency circumstances such as medical emergency, natural calamity, death in the family, etc. has been accepted by the Department. Accordingly, the Committee recommend to carry out suitable modification in Clause 263 to enable refunds in case of filing belated or revised returns.

The Committee further note that Clause 433 of the Bill corresponds to Section 239 of the Income-Tax Act, 1961 dealing with form of claim for refund and limitation. They find that in Clause 433 ‘part’ has been mentioned inadvertently while the intended word is ‘Chapter’. They also find that this drafting error has been accepted by the Department in case of drafting of Clause 436 as well. The Committee, therefore, recommend that the same drafting correction may also be carried out in Clause 433.

464.

434.6

434

The Committee note that Clause 434 of the Income- Tax Bill 2025, which deals with refund for denying liability to deduct tax, corresponds to Section 239A of the Income-Tax Act, 1961. While Clause 434 primarily addresses for refunds where no tax liability exists, there is no clarity regarding refund of deduction made at a rate higher than required. The ambiguity, in this regard, has been not only admitted by the Department of Revenue during their oral evidence before the Committee; but they also agreed to examine Clause 434 if the wording is causing any problem in this regard. The Committee, therefore, recommend the Department to look into the Clause and amend/rephrase the same to bring clarity even at the cost of few more words, if required, to make the proposed legislation clear and reduce potential disputes.

465.

435.4

435

The Committee note that Clause 435 is in consonance with objectives of the Bill and therefore, recommend that the Clause may be made part of the Bill, as proposed by the Department.

466.

436.6

436

The Committee note that the provisions of Clause 436 corresponding to Clause 242 of the extant Act have been only textually simplified while retaining its intent. The Committee, however, find that there is a drafting error in the provisions of Clause 436 as it mentions ‘Part’ instead of ‘Chapter’, which has been accepted by the Department of Revenue. Therefore, the Committee recommend to amend the Clause as under:

436. “In a claim under this Chapter, it shall not be open to the assessee to question the correctness of any assessment, or other matter decided which has become final and conclusive, or ask for a review of the aforesaid assessment or matter; and the assessee shall not be entitled to any relief on such claim except refund of tax wrongly paid or paid in excess.”

467.

437.6

437

The Committee note that Clause 437, relating to interest on refunds, corresponds to Section 244A of the Income-Tax Act, 1961. They find that besides simplification of the language and prescription of interest on refund in a tabular format, no policy change has been effected. They acknowledge the demand for interest rate parity for both dues and refunds. However, after considering the Department’s contention that (i) more interest burden on dues and (ii) interest on refunds being more than commercial rate of interest on short-term deposits and comparable with long-term return of fixed deposits; are required for tax payment discipline, the Committee are of the view that status quo may be maintained. Nevertheless, they recommend the Department to incorporate the accepted drafting corrections for Clause 437, as pointed out in various suggestions.

468.

438.4

438

The Committee note that Clause 438 relating to ‘Set off and withholding of refunds in certain cases’ is a textual simplification of Section 245 of the existing Act. The Ministry of Finance (Department of Revenue) have confirmed no policy change during its drafting.As the proposed Clause is in consonance with the objectives of the Bill, the Committee are of the view that it may be made part of the Bill, as proposed by the Department.

469.

439.6

439

The Committee note that proposed definitions of under-reporting and misreporting of income along with other respective penalties under Clause 439 are consistent with the extant Income-Tax Act, 1961. They, however, note that a reasonable opportunity of being heard has been provided separately in Clause 471 governing procedure for penalty, not within each penalty Clause. After taking into consideration the views and suggestions of various stakeholders and the Department’s justification of no major policy change, the Committee find that provisions of Clause 439 aligns with the objectives of the Bill. However, in view of the Department’s admission of a drafting error in the use of the word ‘considered’ in Sub-Clause (11) (f) of Clause 439, the Committee recommend to amend the proposed Clause accordingly.

470.

440.6

440

The Committee observe that Clause 440 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 270AA of the Act regarding immunity from penalty. Noting that there is no policy change in this regard and having considered the views of the stakeholders as well as the response of the Department, the Committee accept Clause 440 as proposed.

471.

441.6

441

The Committee note that Clause 441 prescribes a penalty of Rupees Twenty-five thousandfor failure to keep, maintain or retain books of accounts, documents, etc. corresponding to Section 271A of the Act. In this regard, they note that the Department of Revenue have accepted the suggestion to substitute the word ‘shall’ with ‘may’ in the Clause on the lines of existing Income-Tax Act, 1961. The Committee find merit in the suggestion that replacement of the word ‘shall’ with ‘may’ will address the cases of non- compliance of the provisions due to genuine reasons/reasonable cause. Therefore, the Committee recommend to amend the Clause as under:

441. A penalty of twenty-five thousand rupees may be imposed on a person by the Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals), if he fails to—

(a) keep and maintain the books of account and other documents as per section 62 or the relevant rules, in respect of any tax year; or

(b) retain such books of account and other documents for the period specified in the said rules.

472.

442.6

442

The Committee observe that Clause 442, corresponding to Section 271AA of the existing Act, prescribes a penalty of 2% of the value of each international transaction or specified domestic transaction for failure to keep and maintain information and documents in certain cases. Noting no policy change regarding the prescribed penalty or amount,the Committee recommend to retain the Clause as proposed.

473.

443.6

443

Clause 443 of the Income-Tax Bill, 2025 relates to penalty in respect of certain income, which has been prescribed as 10% of the tax payable under section 195(1)(i). The Committee note that Clause 443 corresponds to section 271AAC of the Income-Tax Act, 1961 and no policy change has been made in the said Clause. However, they note that the Department of Revenue have accepted the omission of Sub-Clause 5 of Clause 443 as it is redundant given the applicability of Clauses 471 and 472 to Chapter XXI. Therefore, the Committee recommend the Department to amend Clause 443 for brevity and simplicity.

474.

444.6

444

The Committee observe that Clause 444 empowers Assessing Officer or the Joint Commissioner (Appeals) or the Commissioner (Appeals) to impose penalty equal to the aggregate amount of false or omitted entry in books of account, aligning with Section 271AAD of the Income-Tax Act, 1961. The Clause has been only textually simplified, retaining its original intent. However, the Committee note that inadvertent omission of sub section (1) in Clause 444 has been accepted by the Department of Revenue. The Committee, therefore, recommend the Department to amend Clause 444 accordingly.

475.

445.6

445

The Committee observe that penalty for filing of specified income by a registered non-profit organization, which is chargeable to tax as per Section 337, for the benefit of related persons, has been provided under Clause 445. In this regard, they notice that the term ‘related person’ has been defined under Clause 355 (h), while the term ‘relative’ has been defined under Clause 355(i). Therefore, apropos suggestion received and agreed by the Department of Revenue, the Clause 445 may be amended. Further, the Committee note that there is a drafting error in this Clause akin to Clause 449 where there is no sub clause besides only one. Therefore, Clause 445 may be amended as under:

445. If during any proceedings under this Act, it is found that a registered non-profit organisation has any specified income which is chargeable to tax as per Section 337 (Table: Sl. No. 2), the Assessing Officer may impose on such person, a penalty of—

(a) a sum equal to the aggregate amount of income applied, directly or indirectly, by such person, for the benefit of any related person referred to in section 355(h), if the violation is noticed for the first time during any tax year; and

(b) a sum equal to 200% of the aggregate amount of income of such person applied, directly or indirectly, by that person for the benefit of any related person referred to in section 355(h), if the violation is noticed again in any subsequent tax year.

476.

446.4

446

The Committee note that Clause 446 prescribes a penalty for failure to get accounts audited for tax year or years, corresponding to Section 271B of the existing Act. They also note that no policy change has been effected by the Department; and only a textual simplification of the current Section has been made. The Committee, therefore, accept Clause 446 as proposed.

477.

447.6

447

The Committee note that Clause 447 addresses penalty for failing to submit an accountant’s report as mandated by Section 172.They observe that the Department’s submission indicates that no policy change has been made; rather the provisions have been merely simplified textually from the existing Section 271BA for the same violation. The Committee, therefore, recommend that the Clause may be made part of the Bill, as proposed by the Department.

478.

448.7

448

The Committee note that Clause 448, relates to penalty for failure to deduct tax at source, corresponding to Section 271C of the existing Act. The Department justified this Clause as textual simplification, not a policy change. As the Department of Revenue have acknowledged a drafting error in the cross-referencing for this Clause, the Committee recommend to carry out the minor correction in Clause 448.

479.

449.6

449

Clause 449 relates to penalty for failure to collect tax at source and aligns with Section 271CA of the existing Act. From the justification submitted by the Department of Revenue, the Committee observe that no policy change has been proposed in this Clause. Only textual simplification has been carried out while retaining the intent. Further, the Committee notice that the Department of Revenue have accepted the drafting error concerning sub-clause (1) in Clause 449. The Committee, therefore, recommend that this drafting correction be made in the proposed Clause.

480.

450.6

450

The Committee note that Clause 450, corresponding to Section 271D of the existing Act prescribes penalty for failure to comply with provisions of section 185. This Clause represents textual simplification with no change in policy. The Committee concur with the Department’s rationale for discouraging cash transactions. The Committee, therefore, accept the Clause in its current format.

481.

451.4

451

The Committee note that Clause 451, corresponding to Section 271DA of the existing Act, prescribes penalty for failure to comply with provisions of section 186 with intention of restricting cash transactions and also to curb the flow of black money on the lines of Clause 450. The Committee also note from the submissions of the stakeholder that explicit reference to an exception in Clause 451 is redundant as Clause 470 already provides for an exception from penalty in cases where a reasonable cause for non-compliance exists. The Committee, therefore, recommend to amend the Clause as under:

451. “The Assessing Officer may impose on a person, a penalty equal to the sum received by him in contravention of the provisions of section 186.”

482.

452.6

452

The Committee note that Clause 452 of the Income-Tax Bill, 2025, which corresponds to Section 271DB of the Income-Tax Act, 1961, prescribes a penalty of Rs. Five Thousand per day for every day of duration of default to provide a facility for accepting payments through prescribed electronic modes. Given that this Clause is similar to the existing Section 271DB with no policy change, the Committee recommendits inclusion as it is in the proposed Act.

483.

453.6

453

The Committee note that Clause 453, which imposes a 100% penalty for non-compliance with provisions of section 188, aligns with Section 271E of the Income-Tax Act, 1961. The Committee concurs with the Department’s justification for retaining this clause with the same intent, incorporating only textual simplification. The Committee, therefore, accept the Clause in its current form.

484.

454.4

454

The Committee note that Clause 454 of the Income-Tax Bill 2025, mapped to Section 271FA of the Income-Tax Act, 1961, prescribes penalties for non- compliance in furnishing financial transactions or reportable amounts. The Committee approve Clause 454 as proposed, noting its simplified approach to existing provisions.

485.

455.4

455

The Committee note that Clause 455, dealing with penalty for furnishing inaccurate statement of financial transaction or reportable account, aims to simplify the existing provisions of Section 271FAA. The Committee concur with the Department’s justification for this simplification and therefore, accept Clause 455 as proposed.

486.

456.6

456

The Committee note that Clause 456, a simplified text of the existing Section 271FAB, relates to penalty for failure to furnish statement or information or document by eligible investment fund. As the Department of Revenue have agreed to remove the reference to Section 9A(5) of the Income- Tax Act, 1961 in Clause 456 of the Bill, the Committee recommend to carry out the drafting correction accordingly.

487.

457.4

457

The Committee note that Clause 457 prescribing penalty for failure to furnish information or document under section 171, aligns with existing Section 271G but features simplified linguistic construction. Expressing their concurrence with the justification given by the Department of Revenue in this regard, the Committee accept Clause 457 as it is.

488.

458.4

458

Noting that Clause 458 of the Bill, dealing with penalty for failure to furnish information or document under section 506 by an Indian concern, is a textual simplification of Section 271GA of the Income-Tax Act, 1961 with the same intent, the Committee accept the Clause in its present form.

489.

459.4

459

The Committee note that Clause 459, stipulating penalties for not submitting report or providing inaccurate report under section 511, aligns with the existing Section 271GB and involves no policy shift. They, therefore, accept Clause 459 as proposed by the Department of Revenue.

490.

460.4

460

Clause 460 of the Income-Tax Bill 2025, which deals with penalties for failure to submit statement under section 505, corresponds to Section 271GC of the Income-Tax Act, 1961. The Committee find that this Clause has been reformulated by paraphrasing the existing provisions to enhance clarity and comprehension. Furthermore, having been assured that no policy change has been incorporated in this Clause, the Committee approve Clause 460 as it is.

491.

461.6

461

Clause 461 prescribes a penalty ranging from Rs. Ten Thousand to Rs. One lakh for failure to furnish a statement as required by section 397(3)(b). The Committee note that this Clause is simplified textual version of existing Section 271H maintaining Government’s original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee are of the view that Clause 461 may be included in the new Act as proposed.

492.

462.6

462

The Committee observe that Clause 462 seeks to impose penalty of Rs. One lakh for failure to furnish information or furnishing inaccurate information under section 397(3)(d) and aligns with Section 271I of the Income-Tax Act, 1961. They note that the Department have confirmed that this is a rephrasing, not a policy change. After considering all viewpoints, the Committee accept Clause 462, as proposed, as it meets its objectives.

493.

463.4

463

Clause 463 of the Income-Tax Bill 2025, corresponding to Section 271J of the Income-Tax Act, 1961, stipulates penalty of Rs. Ten Thousand for providing incorrect information in any report or certificate under this Act or the rules made thereunder. The Committee further note that, beyond textual simplification, no policy change has been introduced in the provisions of this Clause. They, therefore, approve Clause 463 as proposed by the Department.

494.

464.4

464

The Committee note that Clause 464, corresponding to Section 271K of the Income-Tax Act, 1961, seeks to provide for imposition of penalty for failure to furnish statement by certain institutions or funds. Recognizing textual simplification, no policy change and retaining original intent in this Clause, the Committee accept the Clause as proposed by the Department of Revenue.

495.

465.6

465

The Committee observe that Clause 465, simplifying Section 272A of the Income-Tax Act, 1961, imposes penalties for non-compliance (eg. failure to provide information or allow inspections) with no policy change. However, the drafting errors viz. omission of Section 268(2) and incorrect reference to 389(5)(a) instead of 392(5)(a) in sub-clause (2) of Clause 465, as pointed out by stakeholders, have been accepted by the Department of Revenue. They, therefore, recommend the Department to carry out the aforesaid drafting correction.

496.

466.4

466

The Committee note that Clause 466 prescribing penalty for failure to comply with the provisions of section 254 is similar to the provisions of existing Section 272AA of the Income-Tax Act, 1961 with no policy change. They, therefore, approve the Clause 466 as proposed by the Department of Revenue.

497.

467.4

467

The Committee note that Clause 467, a textual simplification of Section 272B of the Income-Tax Act, 1961, seeks to impose penalties for non-compliance with the provisions of section 262. As no policy changes are incorporated, the Committee accept Clause 467 as proposed by the Department of Revenue.

498.

468.4

468

The Committee observe that Clause 468 deals with penalty for failure to comply with the provisions of section 397(1) which corresponds to Section 272BB of the extant Act. They note that, apart from textual simplification, no policy change has been introduced in this Clause. They, therefore, accept Clause 468 as proposed by the Department of Revenue.

499.

469.4

469

The Committee note that Clause 469 grants power to reduce or waive penalties, etc., in certain cases, akin to Section 273A of the Income-Tax Act, 1961. They further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Department.

500.

470.6

470

The Committee observe that Clause 470 of the Bill, mirroring Section 273B of the extant Act, seeks to provide that penalty in certain cases shall not be imposed for reasonable cause. After considering stakeholders suggestions and Department’s responses, the Committee find that: (i) there is a drafting error in the reference part of the Clause, which the Department have accepted; (ii) the suggestion to condone misreporting of income on the grounds of reasonable cause is untenable as misrepresentation or suppression of facts cannot be permitted under any circumstances. The Committee concur with the views of the Department of Revenue. Accordingly, the Committee recommend that drafting correction be carried out in Clause 470 to include reference to clause 453.

501.

471.5

471

The Committee note that Clause 471, outlining penalty procedures, corresponding to Section 274 of the Income-Tax Act 1961, is a textual simplification consistent with the objectives of the Bill. The Committee, therefore, accept the Clause as proposed by the Department.

502.

472.4

472

The Committee observe that Clause 472, mapped to Section 275 of the extant Act, seeks to provide for a bar of limitation for imposing penalties. Noting that its provisions retain the same context and intent as the existing provision of the Income-Tax Act, 1961, with simplified language for greater insight, the Committee accept Clause 472 as proposed by the Department.

503.

473

473.6

The Committee while examining the Clause 473 of the Bill note that the Clause deals with ‘contravention of order made under section 247’ and corresponds to section 275A of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been retained with the same intent in the proposed clause. Having considered the views of both stakeholders and the Ministry, the Committee accept the Clause 473 as proposed.

504.

474

474.5

The Committee note that Clause 474 deals with ‘failure to comply with clause (ii) of section 247(1)(b)’, aligns with the provisions of Section 275B of the Income-Tax Act, 1961. The Committee also note that the textual simplification of clause 474 is as per the objectives of the Bill and retaining the same intent. The Committee, therefore, accept the Clause as proposed.

505.

475

475.6

The Committee note that clause 475 of the Bill, which mirrors Section 276 of the Income-Tax Act, 1961 concerning actions to prevent tax recovery (i.e., removal, concealment, transfer or delivery of Property), requires a minor amendment. Following a stakeholder's suggestion, and with the Department's agreement, the Committee recommend inserting "therein" after the word "interest" in Clause 475 to ensure consistency with the existing Act. Aside from this drafting Correction, the Committee approve the Clause as proposed.

506.

476

476.6

The Committee note that Clause 476 of the Bill addresses failure to pay tax to credit of Central Government under Chapter XIX-B, mirroring Section 276B of the Income-Tax Act, 1961. Deliberating on stakeholder suggestions, the Committee has identified a need for a drafting correction. The Committee, therefore, recommend that "Note 3 in Table in section 393(3)", as referenced in Clause 476(1)(b)(i), be incorporated into the relevant proposed section. Subject to this specific amendment, the Committee accept Clause 476 as proposed.

507.

477

477.6

The Committee note that Clause 477 deals with failure to pay tax collected at source, mirroring Section 276BB of the Income-Tax Act, 1961. The Committee observe that the intent of the existing section is retained in the proposed clause. After deliberating stakeholder suggestion, the Committee agree with the Ministry's rationale for maintaining penalty and prosecution provisions for deterrence, and therefore accept Clause 477 as proposed.

508.

478

478.6

The Committee, while reviewing Clause 478 of the Bill, which mirrors Section 276C of the Income-Tax Act, 1961, concerning wilful attempt to evade tax, etc., has identified two crucial drafting corrections. Firstly, the Committee recommend removing the reference to "payment of" in Clause 478(1) to avoid an unintended overlap with Clause 478(2) that could lead to inconsistent prosecution for tax evasion versus payment evasion. Secondly, to align with the existing Section 276C and prevent an overly broad interpretation of prosecution provisions, the Committee advise replacing "may" with "will" in Clause 478(4)(d). Subject to these precise drafting corrections, the Committee approve Clause 478 as proposed.

509.

479

479.6

Clause 479 deals with failure to furnish returns of income. The Committee note that this Clause is simplified textual version of existing Section 276CC maintaining Government original policy. After considering the viewpoints of both the stakeholders and the Department, the Committee accept Clause 479 as proposed.

510.

480

480.5

The Committee observe that Clause 480 of the Bill textually simplifies and retain the intent of section 276CCC of the Income-Tax Act, 1961 regarding failure to furnish return of Income in search cases. Noting that there is no policy change in this regard and having after considered the views of the stakeholder as well as the response of the Department, the Committee accept Clause 480 as proposed.

511.

481

481.6

The Committee note that Clause 481 of the Bill deals with failure to produce accounts and documents, and corresponds to section 276D of the Income-Tax Act, 1961. Recognizing textual simplification, no policy change and retaining original intent in this Clause, the Committee accept the Clause as proposed by the Department of Revenue.

512.

482

482.6

The Committee note that Clause 482 of the Bill deals with false statement in verification, etc., aligns with section 277 of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been textually simplified and retained with the same intent in the proposed clause. The Committee, therefore, accept the Clause 482 as proposed.

513.

483

483.5

Recognizing Clause 483's alignment with Section 277A of the Income-Tax Act, 1961, deals with the falsification of books or documents, the Committee observe it as a textual simplification that preserves the original intent. The Committee, therefore, accept Clause 483 in its proposed form.

514.

484

484.5

The Committee note that Clause 484, which deals with abetment of false return, etc. and corresponds to Section 278 of the Income-Tax Act, 1961, has been textually simplified while retaining its original intent and policy. The Committee, therefore, accept Clause 484 as proposed.

515.

485

485.5

The Committee note that Clause 485, which outlines punishment for second and subsequent offenses, aligns with Section 278A of the Income-Tax Act, 1961. For rationalization, it now also references Clause 480 (failure to furnish income returns in search cases). Observing that Clause 485 meets the Bill's objectives, the Committee accept it as proposed.

516.

486

486.6

The Committee observe that Clause 486 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 278AA of the Income-Tax Act, 1961 regarding punishment not to be imposed in certain cases. Noting that there is no policy change in this regard and having after considered the views of the stakeholder as well as the response of the Ministry, the Committee accept Clause 486 as proposed.

517.

487

487.4

The Committee while examining the Clause 487 of the Bill note that the Clause deals with offences by companies, and corresponds to section 278B of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the Clause 487 as proposed.

518.

488

488.5

The Committee note that Clause 488 of the Bill deals with offences by Hindu undivided family aligns with Section 278C of the Income-Tax Act, 1961. The Clause represents textual simplification, retention of same intent and no policy change. The Committee, therefore, accept the Clause 488 as proposed.

519.

489

489.5

The Committee note that Clause 489 deals with presumption as to assets, books of account, etc., in certain cases, corresponding to Section 278D of the existing Act. The Committee also note that no policy change has been effected by the Ministry; and only a textual simplification of the current Act. The Committee, therefore, accept Clause 489 as proposed.

520.

490

490.4

The Committee note that Clause 490 of the Bill provides for presumption as to culpable mental state, mirrors section 278E of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been retained with the same intent in this clause. The Committee, therefore, accept the Clause 490 as proposed.

521.

491

491.6

The Committee, while examining Clause 491 of the Bill, note that it addresses prosecution to be at instance of Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, aligning with Section 279 of the Income-Tax Act, 1961. A stakeholder suggested drafting correction to sub-clause (1), which places "Commissioner (Appeals)" before "Joint Commissioner (Appeals)," has been accepted by the Ministry. With this specific amendment, the Committee accept Clause 491 as proposed.

522.

492

492.5

The Committee note that Clause 492, which aligns with Section 279A of the Income-Tax Act, 1961, categorizes certain offences to be non-cognizable. The Committee also note that two rationalizations have been made in this clause viz. making offenses under Clause 480 (failure to furnish returns in search cases) non-cognizable; and updating the legal reference from the Code of Criminal Procedure, 1973, to the Bhartiya Nagarik Suraksha Sanhita, 2023. Given the Ministry's justification, the Committee accept Clause 492 as proposed.

523.

493

493.4

The Committee, while examining the Clause 493 of the Bill, note that the Clause provides for proof of entries in records or documents which mirrors section 279E of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the Clause 493 as proposed.

524.

494

494.5

Noting that Clause 494 of the Bill, dealing with Disclosure of particulars by public servants, is a textual simplification of Section 280 of the Income- Tax Act, 1961 with the same intent and no policy change, the Committee accept the Clause in its present form.

525.

495

495.5

The Committee note that Clause 495, which provides for special courts, is a textual simplification of Section 280A of the Income-Tax Act, 1961, retaining the same intent. Therefore, the Committee accept Clause 495 as proposed.

526.

496

496.4

The Committee note that Clause 496, deals with offences triable by Special Court, aligns with the existing section 280B of the Income-Tax Act, 1961. The Committee concur with the Ministry’s justification for retaining this clause with the incorporation of the words “Bharatiya Nagarik Surakasha Sanhita” in place “Code of Criminal Procedure, 1973. The Committee, therefore, accept the Clause 496 as proposed.

527.

497

497.6

The Committee observe that Clause 497, deals with Trial of offences as summons case, corresponds to the existing section 280C of the Income-Tax Act, 1961. The Committee concurs with the Ministry’s justification for retaining this clause with the incorporation of the words “Bharatiya Nagarik Surakasha Sanhita” in place “Code of Criminal Procedure, 1973. The Committee, therefore, accept the Clause 497 as proposed.

528.

498

498.5

The Committee note that Clause 498 of the Bill deals with application of Bharatiya Nagarik Suraksha Sanhita, 2023 to proceedings before Special Court, aligns with section 280D of the Income-Tax Act, 1961. The Committee also note that the words “Bharatiya Nagarik Surakasha Sanhita” have been incorporated in place of “Code of Criminal Procedure, 1973. Given the Ministry’s justification in this regard, the Committee accept the Clause 498 as proposed.

529.

499

499.6

The Committee note that Clause 499 of the Bill, addressing void transfers (mirroring Section 281 of the Income-Tax Act, 1961), now incorporates "virtual digital asset" into its definition of "asset." The Ministry has justified this inclusion as a rationalization aimed at aligning the provision with other sections of the Bill. The Committee also note that the Ministry has accepted two key drafting improvements suggested by stakeholders: first, in the clause 499(4)(a), changing "virtual digital asset" to the plural "virtual digital assets" for consistency with the broader definition of "assets"; and second, inserting "and" before the last item in Clause 499(4)(a), which enhances clarity and improves overall drafting. After considering the perspectives of both stakeholders and the Ministry, the Committee accept Clause 499 as proposed, incorporating these drafting corrections.

530.

500

500.6

The Committee note that Clause 500 of the Bill, which corresponds to Section 281B of the Income-Tax Act, 1961, addresses provisional attachment to protect revenue in certain cases. This clause maintains the same intent as the existing section, with no policy changes, only textual simplification. The Committee find that the Ministry has accepted a drafting correction for Clause 500(1)(a). The comma placed between "reassessment of any income" and "which has escaped assessment" will be removed. This change clarifies that "which has escaped assessment" directly modifies the preceding phrase, ensuring the text accurately reflects the intended meaning for assessments or reassessments of income. After considering the views of both stakeholders and the Ministry, the Committee approve Clause 500, incorporating the afore- mentioned drafting correction.

531.

501

501.6

The Committee observe that Clause 501 of the Bill, which addresses service of notice generally, corresponds to Section 282 of the Income-Tax Act, 1961. This clause carries forward the existing section's intent without policy changes, merely simplifying the text. However, a critical omission is identified in Clause 501(1). Unlike the existing Section 282(1), the new clause lacked the bracketed definition "(hereafter in this section referred to as "communication")" after listing various forms of communication. The Committee believe that addressing this omission, would provide a better clarity and achieve the intended applicability of the term "communication" in Clause 501(2). The Ministry has duly acknowledged and committed to rectifying this drafting oversight Having considered the views of both stakeholders and the Ministry, the Committee approve Clause 501 as proposed, contingent on the rectification of this drafting error. Aside from the above drafting correction, the Committee recommend to accept the Clause 501 as proposed.

532.

502

502.5

The Committee note that Clause 502 of the Bill provides for authentication of notices and other documents, aligns with existing Section 282A of the Income-Tax Act, 1961; but features simplified linguistic construction with no policy change. Expressing their concurrence with the justification given by the Ministry of Finance (Department of Revenue) in this regard, the Committee accept Clause 502 as it is.

533.

503

503.5

The Committee while examining the Clause 503 of the Bill note that the Clause deals with service of notice when family is disrupted or firm etc., is dissolved, and corresponds to section 283 of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the Clause 503 as proposed.

534.

504

504.5

The Committee note that Clause 504 stipulates service of notice in case of discontinued business, aligns with the provisions of Section 284 of the Income-Tax Act, 1961. The Committee also note that the textual simplification of Clause 504 is as per the objectives of the Bill and retaining the same intent. The Committee, therefore, accept the Clause as proposed.

535.

505

505.5

The Committee note that Clause 505, a textual simplification of Section 285 of the Income-Tax Act, 1961, deals with submission of statement by a non- resident having liaison office. As accepted by the Ministry, correction may be carried out in clause 505 as under:

‘within sixty days’ may be replaced with ‘within eight months’

Subject to the aforesaid correction, the Committee accept Clause 505 as proposed by the Department of Revenue.

536.

506

506.6

The Committee observe that Clause 506, which addresses the submission of information or documents by Indian concerns, mirrors Section 285A of the Income-Tax Act, 1961, without introducing any policy changes. A stakeholder pointed out a necessary drafting correction in Clause 506: "section 9(9)(a)" should be changed to "clause (a) of section 9(9)" for consistency with Section 285A. Given the Ministry's acceptance of this change, the Committee recommend redrafting Clause 506 to align with the current Act. Subject to this correction, the Committee approve Clause 506 as presented.

537.

507

507.4

The Committee note that Clause 507 of the Bill prescribing provisions for submission of statements by producers of cinematograph films or persons engaged in specified activity, aligns with existing Section 285B of the Income-Tax Act, 1961 but features simplified linguistic construction. Expressing their concurrence with the justification given by the Ministry of Finance (Department of Revenue) in this regard, the Committee accept Clause 507 as it is.

538.

508

508.5

The Committee while examining the Clause 508 of the Bill note that the Clause deals with obligation to furnish statement of financial transaction or reportable account, corresponds to section 285BA of the Income-Tax Act, 1961. The Committee observe that the provisions of the existing section have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the Clause 508 as proposed.

539.

509

509.5

Clause 509 of the Income-Tax Bill 2025, which provides for obligation to furnish information on transaction of crypto-asset, corresponding to Section 285BAA of the Income-Tax Act, 1961. The Committee find that this Clause has been textually simplified and retained with the same intent in this clause. Furthermore, having been assured that no policy change has been incorporated in this Clause, the Committee approve Clause 509 as it is.

540.

510

510.5

The Committee note that Clause 510 of the Bill, which outlines the annual information statement, aligns with Section 285BB of the Income-Tax Act, 1961. The Committee observe that the language of the existing section has been textually simplified in this new clause while retaining its original intent. Therefore, the Committee accept Clause 510 as proposed.

541.

511

511.6

The Committee observe that Clause 511 of the Income-Tax Bill, 2025 textually simplifies and retains the intent of Section 286 of the Act regarding immunity from penalty. Noting that there is no policy change in this regard and having after considered the views of the stakeholders as well as the response of the Ministry, the Committee accept Clause 511 as proposed.

542.

512

512.5

The Committee, upon reviewing Clause 512 of the Bill, acknowledge that it addresses the publication of information respecting assessees in certain cases, directly paralleling Section 287 of the Income-Tax Act, 1961. This Clause represents textual simplification, no change in policy. The Committee, therefore, approve Clause 512 in its current form.

543.

513

513.5

The Committee note that Clause 513 of the Bill addresses appearance of registered valuer in certain matters, corresponding to section 287A of the Income-Tax Act, 1961. Notably, the Committee find that the provisions of the existing Section 287A have been divided between Clause 513 and a newly introduced Clause 514. The new Clause 514 now outlines the method for registering valuers by specified Income-tax authorities. Acknowledging the Ministry's assurance that the proposed provisions in the Income-Tax Bill 2025 are a simplified version of their counterparts in the IT Act, 1961, the Committee accept Clause 513 as proposed.

544.

514

514.6

The Committee note the introduction of Clause 514 in the Bill, which establishes a framework for the registration of valuers by specified Income-tax authorities and addresses related procedural matters. The Committee also note that in response to a stakeholder's suggestion for prescribing specific qualifications for registered valuers to ensure expertise in valuing certain asset classes, the Ministry has concurred that this constitutes a necessary drafting correction. The Ministry has further assured the Committee that Section 247 of the Companies Act, 2013, and the NAFRA Companies (Registered Valuers and Valuation) Rules, 2017, will be thoroughly reviewed during the drafting of the relevant rules. Having considered the perspectives of both stakeholders and the Ministry, the Committee accept Clause 514 as proposed, subject to the incorporation of the aforementioned drafting correction.

545.

515

515.6

The Committee observe that Clause 515 of the Bill, which governs appearances by authorized representatives, aligns with Section 288 of the Income-Tax Act, 1961. The Ministry has asserted that this clause maintains the existing policy, merely simplifying the text. However, a stakeholder identified a drafting error in sub-clause (4)(b) of Clause 515, where it incorrectly refers to Section 275(1)(ii) instead of Section 271(1)(ii). The Ministry has acknowledged this error, and the Committee, therefore, recommend its correction.

The Committee note that in Clause 515 references have been made to Income-Tax Act, 1922 and Income- Tax Act, 1961. Considering the stated aims and objectives of the Bill, the Committee recommend that references to both the Acts may be omitted in Clause 515 and the relevant proviso may be incorporated under Repeals and Savings clause viz. Clause 536 of the Bill.

After having considered the views of stakeholders and the Ministry, the Committee accept Clause 515 as it stands, with the exception of the above recommendations.

546.

516

516.5

The Committee while examining the Clause 516 of the Bill note that the Clause deals with rounding off of amount of total income, or tax payable or refundable and corresponds to sections 288A and 288B of the Income-Tax Act, 1961. The Committee observe that there is no policy change, however, existing Sections 288A and 288B have been merged into single section considering that both the sections were related to rounding off. The Committee take note of Ministry’s justification that the provisions of the existing sections have been textually simplified and retained with the same intent in this clause. The Committee, therefore, accept the Clause 516 as proposed.

547.

517

517.5

The Committee note that Clause 517, which provides for receipt to be given, is in consonance with objectives of the Bill, therefore, the Clause may be made part of the Bill, as proposed by the Ministry.

548.

518

518.5

The Committee note that Clause 518 of the Bill outlines indemnity, akin to Section 290 of the Income- Tax Act, 1961. The Committee further note that this Clause is only a textual simplification, consistent with the objectives of the Bill. Therefore, the Committee accept the Clause as proposed by the Ministry.

549.

519

519.5

Clause 519 of the Income-Tax Bill 2025 which grants power to tender immunity from prosecution, corresponding to Section 291 of the Income-Tax Act, 1961. The Committee find that this Clause has been reformulated by paraphrasing the existing provisions to enhance clarity and comprehension. Furthermore, noting that there is no policy change in this regard, the Committee accept Clause 519 as proposed.

550.

520