Comparison of Section 4 “BASIS OF CHARGE” between the Income Tax Act, 2025 (as passed) and the Income Tax Bill, 2025 (as originally introduced).

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 4 is located in Chapter II ("Basis of Charge") of the Income Tax Bill, 2025 (Old Version). It articulates the foundational charge rule that links the rate-setting function (a Central Act enacting rates for a tax year) with the charging mechanism under this Bill. Definitions beyond the text of Clause 4 (for example, definitions of "tax year", "person", or procedural provisions) are not contained within Clause 4 and therefore: Not stated in the document. Clause 4 explicitly covers: (i) the triggering of rates enacted by a Central Act; (ii) that charge is on total income of the tax year of every person; (iii) that "income-tax" includes a....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... signals present in the text include: * A linkage between rate-setting (Central Act) and the charging operation under the Bill - the Bill does not itself set rates for tax years but gives effect to rates enacted by Central Act. * Taxable base is expressed in aggregate language ("total income of the tax year of every person"), indicating a comprehensive annual basis of charge rather than, for example, a transactional levy. * Inclusion of "additional income-tax" by whatever name called appears designed to encompass levy labels and avoid form-based avoidance. * Provision for periods other than tax year signals legislative flexibility to allow charging on other accounting or specified periods where the Act so provides. Beyond t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....al to Clause 4. Differences Between Section 4 (Income-tax Act, 2025 [As Passed]) and Clause 4 (Income Tax Bill, 2025 - Old Version) and Practical Impact * Wording and grammatical re-ordering in sub-section (1): Old Bill: "Income-tax for any tax year shall be charged as per the provisions of this Act at the rate or rates which are enacted by a Central Act for such tax year." Passed Act: "Where any Central Act enacts that income-tax shall be charged for any tax year at any rate or rates, income-tax for such tax year shall be charged at that rate or those rates in accordance with and subject to the provisions of this Act." Practical impact: Purely stylistic/clarificatory. The Passed Act places primacy on the Central Act's enactment....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... other than tax year where provided. Practical impact: No substantive change in core charging mechanism. Changes are drafting clarifications that may aid interpretation and application but do not introduce new concepts or taxpayer obligations beyond existing structure. Practical Implications * Compliance and risk areas: Clause 4 confirms that income-tax liability arises on the computation of total income for the tax year, and that withholding/collection/advance payment duties attach to chargeable income. Practical compliance therefore depends on the correct identification of the tax year, accurate computation of "total income" (as defined elsewhere), and adherence to withholding and advance payment schedules specified in other provision....