Comparison of Section 8 "Income on receipt of capital asset or stock-in-trade by specified person" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....receives capital assets or stock-in-trade from a specified entity on dissolution or reconstitution. The most significant change in the As Passed text is removal of a two-year time-limit for the Board to issue guidelines with Central Government approval. Affected parties: firms, other associations of persons or bodies of individuals (non-companies, non-co-operative societies) and their partners/members; tax authorities. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Income-tax Act, 2025, Section 8 (As Passed) and the corresponding Clause 8 in the Income Tax Bill, 2025 (Old Version). Both provisions cover a deemed transfer for income-tax purposes when a specified person receives capital asse....

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....et value on the date of receipt is deemed full value of consideration for that deemed transfer; (6) Taxability: profits and gains arising from the deemed transfer are deemed income of the specified entity and chargeable under "Profits and gains of business or profession" or "Capital gains". Interpretation Legislative intent indicated by the text: The provision treats distribution of assets on dissolution/reconstitution as a deemed transfer by the entity, thereby pulling the tax incidence to the entity for profits/gains arising on such deemed transfer. This prevents tax-neutral distribution that would otherwise defer or avoid taxation on unrealised gains at entity level. The valuation method (fair market value on date of receipt) indicates....

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.... market value for tax purposes. Interplay Interactions with other provisions: The section calls out section 67(10) as a related provision for which the Board may issue guidelines to remove difficulties; the text anticipates procedural or interpretive interplay with that section. No other statutory cross-references or Rules/Notifications/Circulars are mentioned in the documents provided. Differences and Practical Impact Identify key differences between As Passed and Old Version Topic Clause 8 of the Income Tax Bill, 2025 (Old Version) Section 8 of the Income-tax Act, 2025 (As Passed) Guidelines - time limit Contains express sunset: "No guideline under sub-section (4) shall be issued after the expiration of two years from t....

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....ndefinitely. This increases administrative flexibility for the tax authorities and prolongs the period in which procedural or interpretive guidance may be promulgated; it may also raise concerns for taxpayers about continuing rule-making after enactment. * Renumbering/relocation of definitions and parliamentary laying clause: Largely formal; no substantive legal consequence beyond internal organization of the provision. * Practical impact: minimal for taxpayers; potential administrative housekeeping for drafters and citators. * Valuation phrasing change ("In this section" -> "For the purposes of this section"): Stylistic; intended effect appears the same - to make clear fair market value on date of receipt is the deemed full val....