Comparison of Section 19 "Deductions from salaries" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....round & Scope Statutory hooks: Clause 19 sets out deductions under the head "Salaries" and cross-references the Industrial Disputes Act, Payment of Gratuity Act, Civil Pensions (Commutation) Rules and Central Civil Services (Pension) Rules, 2021. Context and coverage: The clause enumerates categories of exempt or deductible receipts (tax on employment, standard deduction, various gratuities, commutation of pension, compensation on retrenchment/transfer/closure, voluntary retirement compensation, cash equivalent of leave encashment). Definitions: The text supplies operational definitions and computational formulas (e.g., for gratuity: Amount = 1/2 (A x B); definition of A and B), and notes when "salary" includes dearness allowance for spec....

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.... schemes qualifying under serial 12. Interpretation Legislative intent: The text aims to clarify which employee receipts are to be excluded from taxable salary income and to prescribe computation methods and ceilings. Interpretive principles evident: specificity (itemising categories), cross-referencing to other enactments for computation limits, limiting aggregation across years to prevent cumulative double benefit (A - B formula), and distinguishing government employees from others for certain benefits (e.g., leave encashment). The presence of formulas indicates intent to standardise computation rather than leave it to ad hoc interpretation. Exceptions/Provisos Carve-outs and conditions include: * Gratuity: When multiple gratuitie....

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....ct to notified limit if lower). * Example 3 - Voluntary retirement: Compensation received Rs.800,000; deduction capped at minimum of (compensation; Rs.5,00,000) = Rs.5,00,000. Interplay The clause expressly interacts with: * Payment of Gratuity Act, 1972 (for statutory gratuity limits under serial 5). * Industrial Disputes Act, 1947 (for definitions of employer/workman and calculations under retrenchment-compensation entries). * Central Civil Services (Pension) Rules, 2021 and Civil Pensions (Commutation) Rules (for pension commutation items). * Central Government notifications (for various notified limits referred to as A in aggregation formulas and for the schemes/specified institutions covered under serial 12 and serial 14 ....

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....-references. * Computation formulas and examples: Both contain the same formulas (for gratuity/leave salary computation). The As Passed version appears to present the formula for gratuity (Amount = 1/2 (A x B)) with explicit labelling of A and B in the same way as the Old Bill; any minor variation is editorial. Practical impact: None to taxpayers' entitlement computations. * Conditions and provisos to serial numbers (e.g., serial 12 schemes and serial 14 aggregation limits): Both texts include the same conditional language, but the Old Bill contains some typographical or parenthetical variations (e.g., punctuation and bracket placements, "inter alia" vs "including, inter alia"). Practical impact: No substantive change in complia....