Comparison of Section 28 "Rent, rates, taxes, repairs and insurance" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ive date or decision date: Not stated in the document. Background & Scope Statutory hook: Clause 28 of the Income Tax Bill, 2025 dealing with "Profits and gains of business or profession." Scope: provides that specified amounts shall be allowed as deduction in respect of premises, machinery, plant or furniture "wholly and exclusively" used for business or profession. The clause enumerates categories (insurance premium, land revenue/local rates/municipal taxes, rent when tenant, current repairs when occupied otherwise than as a tenant, and cost of repairs when premises occupied by the assessee as a tenant). Definitions or further explanations: Not stated in the document. Statutory Provision Mode Text & Scope The provision covers deducti....

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....-by-case factual determination of proportionate business use. Exceptions/Provisos No express provisos, thresholds, or procedural conditions appear in Clause 28 beyond the "wholly and exclusively" condition and the exclusion of capital expenditure. Specific exceptions (e.g., measuring apportionment methods, documentation requirements) are Not stated in the document. Illustrations * Example 1: A manufacturing firm uses a factory building solely for manufacturing; premium paid for insurance on the building would be deductible under clause (a) because the premises are wholly and exclusively used for business. * Example 2: A proprietor runs a business from part of a building and uses part for private residence. Only a fair proportionate p....

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....n the premises occupied by the premises occupied by the assessee as a tenant" (contains a drafting repetition). The Passed Act's clause (e) clarifies that the deduction applies where the premises are occupied by the assessee as a tenant and "where he has undertaken to bear the cost of repairs to the premises." Thus the Passed Act adds an explicit requirement that the tenant has undertaken responsibility for repairs. * Wording on capital expenditure: The Old Version uses the phrase "not being capital expenditure"; the Passed Act uses "not being in the nature of capital expenditure." This is a drafting refinement but may have interpretive significance. * Assessing Officer determination: Both versions retain subsection (2) restricting ....

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....tes may shift from entitlement to apportionment methodology. Practical Implications * Compliance and risk areas: Taxpayers must establish that assets are "wholly and exclusively" used for business or profession to claim full deductions. Where use is mixed, subsection (2) exposes taxpayers to assessment-time apportionment. The exclusion of capital expenditure demands careful classification of spending as current repair versus capital improvement to avoid disallowance. * Record-keeping/evidence points: Although the clause does not prescribe records, the textual requirements imply that taxpayers should retain evidence of exclusive business use (floor plans, usage logs), invoices and nature-of-expenditure documentation to substantiate repa....