TaxTMI 
TaxTMI 
The Evolution of Tax Return Preparer Schemes : Clause 264 of the Income Tax Bill, 2025 Vs. Section 139B of the Income Tax Act, 1961
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....y navigate the complexities of income tax return filing. The legislative intent behind these provisions is to institutionalize a mechanism that enables certain classes of taxpayers to avail professional assistance in return preparation, while simultaneously ensuring regulatory oversight and accountability of TRPs. This commentary provides a detailed analysis of Clause 264, elucidates its objectives, interprets its key provisions, and examines its practical implications. A comparative analysis is then undertaken with Section 139B, highlighting substantive changes, continuities, and the broader policy rationale. The discussion also explores potential areas of ambiguity and suggests avenues for reform or clarification. Objective and Purpose ....
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....gible classes and operationalizing the scheme. The non-obstante reference to section 263 (which deals with revision of orders prejudicial to revenue) ensures that the scheme's operation is independent of the powers of revision u/s 263, thus ring-fencing the return preparation process from subsequent revisional proceedings. 2. Definitions Clause 264(2) provides statutory definitions: * Tax Return Preparer: An individual (excluding those referred to in section 515(3)(a)(ii) or employees of specified persons) authorized under the scheme. * Specified class or classes of persons: Any person, other than a company or a person whose accounts are required to be audited u/s 63 or any other law, who is required to file a return under the Act....
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.... 2. For Tax Return Preparers TRPs are positioned as intermediaries, with their authorization, qualifications, and conduct to be regulated by the scheme. While Clause 264 does not specify these aspects in the primary legislation, it is expected that the scheme will address them, drawing from the experience u/s 139B. The authority to exclude certain individuals (e.g., those referred to in section 515(3)(a)(ii)) ensures that only suitable candidates are authorized, maintaining the integrity of the process. 3. For the Tax Administration The provision empowers the CBDT to design and update the scheme as needed, facilitating responsiveness to technological or operational challenges. The requirement to notify the scheme and (presumably) lay it ....
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....ional detail to the scheme itself. This marks a shift towards greater reliance on subordinate legislation, potentially increasing flexibility but also raising concerns about legal certainty and stakeholder awareness. * Legislative Oversight: Section 139B(5) mandates the laying of the scheme before both Houses of Parliament for scrutiny and potential modification or annulment. Clause 264(3) simply refers to notification as per section 534, the contents of which are not detailed in the provided text. The extent of Parliamentary oversight under the new regime will depend on the provisions of section 534. * Exclusions and References: The exclusionary references differ. Section 139B excludes persons referred to in section 288(2)(ii)-(iv), wh....
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....e can lead to inconsistencies, lack of predictability, and challenges in judicial review. The absence of express statutory requirements for TRP qualifications, conduct, and accountability may weaken the regulatory framework unless robustly addressed in the scheme. * Oversight and Accountability: The mechanism for Parliamentary oversight of the scheme under Clause 264 hinges on section 534, the details of which are not provided. If oversight is diluted, there may be concerns regarding transparency and democratic control. * Exclusion Criteria: The reference to section 515(3)(a)(ii) in defining eligible TRPs is not self-explanatory. Clarity is required to ensure that the exclusion operates as intended, preventing conflicts of interest and ....