Comparison of Section 33 "Deduction for depreciation" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....sly excluding goodwill. The deduction applies to assets "owned wholly or partly by the assessee and used wholly and exclusively for the purposes of the business or profession." The clause sets out special rules for undertakings engaged in generation or generation and distribution of power, rules for blocks of assets, proportionate restriction where assets are partly used, limits when actual cost is allowed u/s 54, a 50% restriction for assets acquired and used for less than 180 days during the tax year, treatment in cases of succession/amalgamation/demerger, leasehold improvements, additional deduction for new machinery/plant in certain businesses, allowance on shortfall between WDV and sale/scrap proceeds, carry-forward of disallowed depre....

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....ing/production or power), first use by the assessee, non-use by any other person earlier, not being ship/aircraft/office appliances/road transport vehicle/office premises/residential accommodation, and not being of a class where whole cost is fully deductible. * Where profits before depreciation are less than allowable depreciation, the deduction is limited (no deduction if profits are a loss); unallowed amounts are carried forward to succeeding years with specified deemed treatment. Illustrations * Example 1: A manufacturing assessee purchases and installs qualifying new machinery on 1 July in the tax year and uses it wholly in the trade. If used for >180 days that year, the assessee is entitled to normal depreciation at prescribed ra....

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....3) uses the phrase "Deduction for depreciation" and repeatedly refers to "deduction" throughout. The Old Version (Clause 33) alternates between "deduction" and the term "depreciation" in provisions (e.g., sub-sections (2), (3)(a), (10), (11)). * Practical impact: Possible drafting inconsistency in the Bill that may affect interpretation of whether a provision addresses the allowable deduction or the accounting concept of depreciation; the As Passed text standardises on "deduction." * Scope of assets in sub-section (1)(b): Clause 33 (Old Version) omits the specific temporal phrase present in Section 33 (As Passed) that the intangible assets are "acquired on or after the 1st April, 1998." * Practical impact: The As Passed text narrows t....

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....tical impact: As Passed emphasizes particular tangible asset categories, whereas the Bill language is broader (any asset forming part of block). Possible interpretive impact on whether intangible assets in block could be subject to the same proportionate restriction under Clause 33 Bill language; As Passed confines it to tangible categories listed. * Succession/amalgamation/demerger aggregation rule (sub-section (5)): The As Passed text caps aggregate deduction for predecessor and successor (or amalgamating / amalgamated etc.) not to exceed deduction calculated at prescribed rates "as if the succession, amalgamation or demerger had not taken place," and specifies pro rata allocation. The Old Version states the allowable deduction calculat....

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....t cross-reference points in section 41 may alter the technical definition relied upon; this affects the computation base for written down value. The As Passed uses clause (c) whereas the Bill pointed to a table entry - potentially reconcilable but notable for practitioners verifying the exact definition source. * Minor drafting and consistency changes: Several clauses in the Old Version include slightly different sequencing of sub-clauses and different connective words (e.g., "further sum in addition" vs. "additional deduction," "money payable" vs. "moneys payable") whereas the As Passed uses more formalised terms. * Practical impact: Mostly interpretive clarity and internal consistency; the As Passed tends to be more precise in limitin....