Comparison of Section 11 "Incomes not included in total income" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ers, tax practitioners, and the tax department as it defines categories and conditions for tax-exempt incomes. Effective date or decision date: Not stated in the document. Background & Scope Statutory hook: Clause 11 of Chapter III of the Income Tax Bill, 2025 (Old Version), titled "Incomes not included in total income." The clause enumerates the schedules (II, III, IV, V and VI) whose items are not to be included in computing total income, subject to conditions specified in those Schedules. It also addresses persons in Schedule VII who may not be chargeable to tax for a tax year, subject to conditions in Schedule VII. The clause empowers the Central Government to make rules or notifications for the purposes of this section as specified i....

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....sons are excluded from "total income" only upon fulfillment of conditions specified in the referenced Schedules. The presence of sub-sections (2) and (4) indicates a default rule: failure to meet conditions results in taxability. The provision's structure contemplates administrable conditions and the need for rule-making by the Central Government to operationalise the Schedules. Specific legislative intent beyond this structure: Not stated in the document. Exceptions/Provisos The clause itself incorporates the exceptions: the exclusion of incomes/persons is conditional. Specific provisos, thresholds, or exceptions applicable to particular incomes or persons are not contained in Clause 11 but are to be found in Schedules II-VII. Theref....

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....nditions are not satisfied, such income "shall be charged to tax under this Act for that tax year." The passed version states such income "shall be charged to tax under this Act on the total income for that tax year." * Practical impact: the passed version expressly clarifies that the income will be included in "total income" for that tax year. This is a clarification of basis of charging (inclusion in total income) rather than a substantive change in taxability; it may reduce ambiguity about the tax base into which the income is to be placed. * Sub-section (3) wording - persons in Schedule VII: Old Version: "not be chargeable to tax under this Act for a tax year." Passed version: "not be chargeable to tax under this Act on the total in....

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....lications * Compliance and risk areas: Clause 11 places the onus on taxpayers and persons benefited by schedule-based exclusions to ensure that conditions in the relevant Schedules are met each tax year. Failure to satisfy conditions converts an exclusion into taxable income for that tax year-thus risk of unintended tax liability exists where compliance with schedule-conditions is insufficient or not documented. The specifics of compliance duties are set out in the Schedules and rules (Not stated in the document). * Record-keeping/evidence: Given the conditional nature of exclusions, stakeholders should expect to maintain evidence demonstrating fulfillment of schedule conditions (nature of evidence, forms, timelines: Not stated in the d....