Comparison of Section 84 "Capital gains on compulsory acquisition of lands and buildings not to be charged in certain cases." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ndustrial undertaking are compulsorily acquired and the assessee reinvests proceeds to shift/re-establish or set up another industrial undertaking within three years. It affects taxpayers whose industrial land/buildings are compulsorily acquired and the revenue department with respect to deferred taxation and deposits. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 84 is drafted as part of the Income Tax Bill, 2025 (Old Version). The provision addresses "capital gains arising from the transfer by way of compulsory acquisition under any law" where the asset is land, building or any right therein forming part of an industrial undertaking used in the two years preceding transfer. The c....

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....ansfer of the new asset within three years, the cost shall be reduced by the amount of the capital gains. Interpretation Legislative intent and interpretive principles indicated by the text: The clause intends to afford a deferral/exemption-like relief for compulsory acquisition of industrial land/buildings where proceeds are reinvested in replacing the undertaking, thereby reducing immediate tax burden to the extent of reinvestment. The three-year period is a temporal qualification for reinvestment. The drafting prescribes a mechanism (either tax the excess or reduce cost basis) to reflect the extent of reinvestment. Principles: The provision treats reinvested proceeds as effectively continuing the capital asset's continuity for tax....

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....ontemplates a "scheme notified by the Central Government" and deposits into a "specified bank or institution." The clause itself does not reproduce or summarize those external provisions or the scheme; therefore details of interaction are limited to textual cross-references. Specific cross-rules and notifications: Not stated in the document. Differences between Section 84 of the Income-tax Act, 2025 and Clause 84 of the Income Tax Bill, 2025 (Old Version) and Practical Impact * Timing language for deposit and filing: The Act (Section 84) states at sub-section (2) that the unutilised amount "shall be deposited in a specified bank or institution and utilised as per the scheme notified by the Central Government;" and more specific....

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....e u/s 67. * Minor drafting clarity in the Act's reference to section 263 may reduce interpretive friction about the applicable return-filing deadline; the Bill's duplication could have created uncertainty. Thus the Act's wording is marginally clearer for compliance timing, but there is no substantive change in taxpayer obligation. * No new procedural obligations, alternative remedies, or altered timelines are introduced by the Act vis-`a-vis the Bill's old version; compliance efforts remain the same in practice. Practical Implications * Compliance and risk areas: Timeliness - the three-year reinvestment window is critical. The clause conditions tax neutrality on reinvestment within that period and on deposit of unutil....