Comparison of Section 46 "Capital expenditure of specified business" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ovision primarily affects taxpayers carrying on the listed specified businesses, and interacts with other deduction provisions and procedural sections (as cross-referenced). Effective dates for different businesses are specified in the Table. Background & Scope This clause is framed under the head "Profits and gains of business or profession" and proposes a statutory allowance for the entire capital expenditure incurred "wholly and exclusively" for specified businesses in the tax year in which such expenditure is incurred (sub-sections (1) and (2)). The clause covers pre-commencement capitalisation (allowed in the year of commencement) and enumerates conditions to curb misuse (sub-section (3)). Definitions relevant to the clause are provi....

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....siness within eight years. The reference to "at his option" indicates a taxpayer elective regime (taxpayer may choose to claim the deduction in the relevant year). Exceptions/Provisos Key carve-outs and conditions: * Not applicable if business is set up by splitting up or reconstruction of an existing business (sub-section (3)(a)). * Not applicable to businesses set up by transfer of machinery or plant previously used for any purpose (sub-section (3)(b)), with a limited de minimis exception if transferred machinery value does not exceed 20% of total (sub-section (11)(f)). * For certain pipeline businesses and infrastructure projects, additional ownership, approval and common-carrier capacity conditions apply (sub-section (3)(c) and ....

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.... treated as "previously used" for the purpose of sub-section (3)(b) (sub-section (11)(e)). * Example 3: A taxpayer claims deduction under sub-section (1) for a sugar warehousing facility, then uses the asset for a different non-specified purpose in year 5. If the alternative use is not chargeable u/s 26(2)(k), recapture rules in sub-section (9)(b) make earlier deductions taxable after adjusting depreciation as if no deduction under this section was allowed. Interplay The clause expressly displaces certain other deductions for the same expenditure (section 144 and Chapter VIII-C). It ties the definition of "infrastructure facility" to section 80-IA(4) Explanation, thereby importing interpretative linkages with that provision. Procedura....

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.... reproduced here). * Definition of "infrastructure facility": Document 1 supplies an explicit list (roads, highways, water projects, ports, airports, etc.). Document 2 adopts the meaning assigned in the Explanation to section 80-IA(4) of the Income-tax Act, 1961. * Practical impact: The Bill ties the definition to an external, possibly broader or differently worded, statutory explanation; this may create reliance on section 80-IA(4) jurisprudence and any changes thereto, producing potential interpretive divergence from a self-contained list. * Table entries - notification/guidelines wording: Several entries differ in phrasing. Document 1 uses "notified by the Board in this behalf in accordance with the guidelines as may be prescribed"....

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.... * Sub-section (9)(b) wording: Document 1 states the proviso shall be "deemed to be the income chargeable under the head 'Profits and gains of business or profession' of the tax year" whereas Document 2 omits the phrase "shall be deemed to be" and states "shall be the income chargeable under the head..." * Practical impact: Largely stylistic; both produce the same legal outcome that the recaptured amount is taxable under business income. Practical Implications * Compliance and risk areas: Taxpayers must ensure the business is not a reconstruction or splitting of an existing enterprise and that machinery previously used is not transferred to the specified business (with the 20% de minimis exception). Where regulatory approvals....