Comparison of Section 44 "Amortisation of certain preliminary expenses" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....e primary stakeholders are Indian companies and other resident persons incurring preliminary/project-related expenses; the government's revenue administration is the other affected party. Effective date or enactment date: Not stated in the document. Background & Scope Statutory hooks: clause/section titled "Amortisation of certain preliminary expenses" appearing in the Income Tax Bill, 2025 (old version) and the Income-tax Act, 2025 (final). The provision sits in the head "Profits and gains of business or profession." Scope: resident Indian assessees (Indian companies and persons other than companies) who incur certain specified expenditures either (a) before commencement of business or (b) after commencement in connection with extens....

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....g/advertisement costs for prospectus); and (d) other prescribed items not eligible for allowance/deduction under any other provision of the Act. Interpretation Legislative intent (as indicated by the text): to permit spreading over five years of bona fide preliminary/project development costs that are incurred to establish, extend or set up business units, while preventing double tax relief under other provisions. The inclusion of an express cap tied to project cost or capital employed indicates a policy balance between allowing relief for start-up activity and protecting the revenue base by capping the quantum of such relief. Exceptions/Provisos Carve-outs and conditions in the text: deduction is permitted only for resident assessees; ....

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....prescribed form for the first year of claim. Not stated in the document: specific form number or due dates for filing the audit report. (Therefore: "Not stated in the document.") Interplay The text expressly prevents double relief under other provisions (sub-section (9)). It cross-refers to section 32(e) when defining eligible financial institutions (for long-term borrowings). References to prescribed forms, particulars and manner indicate delegated rules/notifications will fill in procedural specifics. Not stated in the document: specific rules/regulations and forms; interaction with other specific sections beyond section 32(e) (e.g., accounting standards, transfer pricing, or GST) is not addressed in the text. Differences between ....

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....Document 1 defines "cost of the project" as "the actual cost of the fixed assets ... and- (i) for cases under sub-section (1)(a), the actual cost as shown in the books of the assessee as on the last day ...; (ii) for cases under sub-section (1)(b), the actual cost as shown in the books ... in so far as such fixed assets have been acquired or developed ..." Document 2 uses more general phrasing: "the cost is calculated as of the last day ..." and adds "which only includes fixed assets acquired or developed in connection ..." * Practical impact: The Act's explicit reference to "actual cost as shown in the books" imposes an objective anchor (book values) that may reduce disputes as to valuation methodology; the Bill's wording is marg....

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....ve power to prescribe rules, forms and particulars. The practical effect is minor but reflects conventional statutory drafting; no substantive change in taxpayer obligations is apparent from this wording alone. * Minor wording/tense differences in amalgamation/demerger clauses. Document 1 uses "as if the amalgamation had not taken place." Document 2 uses "has not taken place." * Practical impact: Purely grammatical; no material legal consequence unless read in context of temporal effect. The Act's past-perfect phrasing is slightly clearer as to hypothetical treatment. Practical Implications * Compliance and risk areas: taxpayers must ensure eligible expenditure is not simultaneously claimed under other sections; for non-company....