Comparison of Section 85 "Capital gains not to be charged on investment in certain bonds." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ty and the tax department's assessment of deferred gains. Effective/decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 85 of the Income Tax Bill, 2025. The provision addresses treatment of long-term capital gains arising from the transfer of land or building (original asset) when reinvested into certain long-term bonds (new asset). Definitions/explanations: Clause 85(6) defines "new asset" as any bond redeemable after five years and as notified by the Central Government for the purposes of this section with such conditions (including a condition for providing a limit on the amount of investment by an assessee in such bond). No other statutory cross-references or definitional elaborations are included....

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....mited roll-over-like relief (deferment of tax) for long-term capital gains from immovable property where the gains are reinvested into specified long-term bonds. The six-month reinvestment window, five-year holding requirement for the bond, and a monetary cap (Rs. 50 lakh) indicate a legislative balance between incentivising certain public/sector bonds and preventing indefinite tax avoidance. The statutory language indicates a legislative policy to treat the reinvestment as a basis for not charging gains immediately, subject to temporal and monetary safeguards. No explicit legislative history or purposive statement beyond the clause text is provided. Not stated in the document: any legislative note, explanatory memorandum, or policy rationa....

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....orate how computations under those sections are to be adjusted. No Rules, Notifications or Circulars are incorporated into the clause beyond the delegation to the Central Government to notify bonds (Clause 85(6)). Not stated in the document: specific interactions with other provisions such as indexation rules, computation of cost of acquisition for the reinvested asset, or the income-tax return disclosure requirements. The clause contemplates notifications with "such conditions" - potential interplay will depend on subsequent notifications issued under that power. Differences between Section 85 (Income-tax Act, 2025) and Clause 85 (Income Tax Bill, 2025 - Old Version) and practical impact * Definition / Scope of "new asset"/"long-term sp....

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....vance." * Practical impact: The Bill treats a secured loan/advance as a "regarded" transfer (language typically used to attribute a transfer-like consequence), while the Act treats it as a deemed conversion into money. Both create similar fiscal consequences (loss of exemption), but the Act's "deemed conversion into money" language may better align with triggering chargeability as capital gains and with consequential computations; the Bill's phrasing could raise interpretive questions about whether other modes of transfer treatment apply. * Terminology and cross-references: * Bill and Act: Both refer to charging u/s 67 and denial of deduction u/s 123 when investment is claimed. The Act's text substitutes "long-term specifi....