Comparison of Section 32 "Other deductions" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... explicit effective date or enactment date. Not stated in the document. Background & Scope Statutory hooks: Clause 32 is framed as a provision of the Income Tax Bill, 2025, dealing with deductions from income u/s 26 (Profits and gains of business or profession). The provision enumerates categories of deductible amounts (sub-clauses (a)-(k)) and provides definitions and scope for certain specialised deductions (notably clause (e) dealing with a special reserve for specified entities and clause (d) dealing with pro rata discount on zero coupon bonds). The Bill text supplies several intra-clause definitions (e.g., "specified entity", "eligible business", "infrastructure facility", "discount", "period of life of bond") and cross-references t....

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....al plus general reserves; detailed definitions of "specified entity", "eligible business" and "infrastructure facility" are supplied. * Deductions for non-capital expenditure incurred by statutory corporations/body corporates established by Central/State/Provincial Acts, if notified by Central Government and incurred for authorised objects (sub-clause (f)). * Expenditure by co-operative sugar manufacturers on purchase of sugarcane at prices not exceeding government-fixed/approved prices (sub-clause (g)). * Marked-to-market loss or other expected loss as computed per income computation and disclosure standards u/s 276(2) (sub-clause (h)); the Bill expressly adds that no deduction or allowance for such loss shall be allowed under any ot....

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....(b)(i)). * Deductions in clause (e) are subject to a 20% cap and an accumulated ceiling tied to equity and reserves; excess is not deductible. * Family planning capital expenditure allowed by phased deduction and subject to application of specified cross-sectional provisions (clause (i)). * Marked-to-market/expected losses allowed only as computed under specified standards and not elsewhere (clause (h)). Illustrations * Example 1: A bank (a specified entity) derives eligible business profits of INR 100 crore in a tax year. It places INR 25 crore into the special reserve. Under clause (e)(i) the deduction shall not exceed 20% of profits (i.e., INR 20 crore) - therefore INR 20 crore deductible; INR 5 crore excess not allowed. (This f....

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....utation and disclosure standards means entities must adopt those standards precisely and avoid claiming the same loss under other provisions. * Record-keeping/evidence: For special reserve claims (clause (e)), records establishing computation of "profits derived from an eligible business", paid-up share capital and general reserves are essential; for mutual benefit societies (clause (b)(ii)) documentation proving recurring subscriptions and satisfaction of prescribed conditions will be necessary; for family planning expenditures, capital/non-capital characterization and amortisation schedules should be maintained. Key Takeaways * Clause 32 consolidates a range of sector-neutral and sector-specific deductions under business income, comb....

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.... cited sections. Exact practical consequence depends on the substantive definitions in the cited provisions (Not stated in the document). * Language and referential adjustments in definitions: Old Bill uses the phrase "as prescribed" in several places; the As-Passed text uses "as may be prescribed" or "as may be notified" in certain instances. * Practical impact: Minor drafting differences; "as may be prescribed" is conventionally broader/future-oriented, but documents do not set out legislative intent or differing legal effect beyond wording. Not stated in the document. * Marked-to-market/expected loss clause (h): Old Bill expressly adds that "no deduction or allowance for such loss shall be allowed under any other provision of this ....