TaxTMI 
TaxTMI 
TaxTMI 
Evolution of Executive Scheme-Making Powers in Indian Income Tax Law : Clause 532 of the Income Tax Bill, 2025 Vs. Section 293D of the Income-tax Act, 1961
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....xpand the scope of the existing Section 293D of the Income-tax Act, 1961, which was introduced in 2020 to facilitate faceless approval or registration processes within the income-tax regime. The introduction of Clause 532 must be viewed in the context of the government's sustained efforts to modernize and digitize tax administration. Over the last decade, tax authorities have initiated several schemes-such as faceless assessment, faceless appeals, and e-proceedings-to minimize the physical interface between taxpayers and tax officials, thereby reducing the scope for discretion, subjectivity, and potential malpractices. Clause 532 appears to further institutionalize this approach, providing a statutory basis for a wider array of schemes,....
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....ve largely been well received and are now being codified and expanded through legislative means. Detailed Analysis of Clause 532 of the Income Tax Bill, 2025 Sub-section (1): Power to Frame Schemes Clause 532(1) grants the Central Government the power to "make a scheme for any of the purposes of this Act," with the express aim of imparting greater efficiency, transparency, and accountability. The sub-section identifies two principal modes for achieving these objectives: - Eliminating the interface with the assessee or any other person to the extent technologically feasible: This provision seeks to minimize or eliminate the need for face-to-face interactions between taxpayers and tax officials, thereby reducing opportunities for co....
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....ts of taxpayers. Sub-section (3): Modification of Existing Schemes under the 1961 Act Clause 532(3) addresses the continuity and modification of schemes notified under the Income-tax Act, 1961, particularly those aimed at eliminating the interface with the assessee. It allows the Central Government to amend or modify such schemes in accordance with the powers conferred by sub-section (1), and provides that the provisions of sub-section (2) shall apply accordingly. This ensures a seamless transition and legal continuity as the new Act supersedes the old, and provides a statutory mechanism for updating or refining existing schemes without legal uncertainty. Sub-section (4): Parliamentary Oversight Clause 532(4) mandates that every notific....
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....ernment to modify or suspend the application of statutory provisions "for the purpose of giving effect to the scheme," but includes a sunset clause: "no direction shall be issued after the 31st day of March, 2022." * This limitation is absent in Clause 532, which contains no sunset or expiry provision, suggesting that the power is intended to be permanent and ongoing. Both provisions require that notifications be laid before Parliament, ensuring a measure of legislative oversight. Transitional Provisions * Clause 532(3) specifically addresses the transition from schemes notified under the 1961 Act, allowing for their amendment or modification under the new regime. Section 293D, being a relatively recent insertion, does not contain such....
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....ication, subject only to the requirement of laying the notification before Parliament. While this is not unprecedented, the breadth of the power raises questions about the balance between legislative and executive authority. Judicial scrutiny may be required to ensure that the core features of the Act are not subverted by executive action. Absence of Sunset Clause * Unlike Section 293D, Clause 532 does not contain a sunset clause. This means that the government's power to issue modifying notifications is ongoing, with no temporal limitation. While this provides flexibility, it also increases the risk of overuse or abuse of the power, especially in the absence of detailed procedural safeguards. Technological Feasibility and Access ....
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....on-Based Administration: The reliance on notifications for framing and modifying schemes means that stakeholders must remain vigilant and updated on changes in procedures and requirements. * Adaptation and Modification: The ability to adapt and modify statutory provisions for scheme implementation introduces a layer of complexity, as the legal landscape may change dynamically in response to administrative needs. * Parliamentary Oversight: While notifications are subject to parliamentary laying, the effectiveness of oversight depends on the diligence of legislative committees and the transparency of executive action. Conclusion Clause 532 of the Income Tax Bill, 2025 marks a pivotal shift in the architecture of tax administration in In....