Comparison of Section 88 "Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... Bill, 2025, titled "Exemption of capital gains on transfer of assets in cases of shifting of industrial undertaking from urban area to any Special Economic Zone." It matters because it prescribes conditions under which capital gains arising from transfers related to relocation of industrial undertakings to SEZs are exempted or deferred. The provision affects taxpayers operating industrial undertakings in urban areas contemplating relocation to Special Economic Zones, and the revenue authorities administering capital gains taxation. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 88 of the Income Tax Bill, 2025 and section 87 (referred to as containing a meaning for "urban area" and ....

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....ncome of the tax year in which the transfer occurred. Interpretation Legislative intent suggested by the text: to encourage relocation of industrial undertakings from urban areas to SEZs by providing exemption/deferral of capital gains when gains are reinvested in specified assets or used as per a notified scheme. The clause implements a rollover or reinvestment relief mechanism: if reinvestment equals or exceeds the capital gain, no capital gain tax is charged; if reinvestment is less, the difference is charged as income. The provision indicates that the cost basis for any later transfer of the new asset within three years is adjusted to reflect the relief (nil cost or reduced by the exempted/reinvested amount), thereby preventing immedi....

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....w asset. (Specific bank/institution and scheme details: Not stated in the document.) Interplay Interactions mentioned: reference to section 87 for meaning of "urban area"; reference to section 67 for charging unexempted amounts as income; procedural deposit and utilization subject to a scheme notified by the Central Government. References to "the said section" or "the said sub-section" in relation to filing due dates suggest interplay with return filing provisions in section 263(1) (Bill uses "sub-section (1) of the said section" in places). Other Rules/Notifications/Circulars: Not stated in the document beyond mention of a Central Government notified scheme and a specified bank or institution. Differences between (Document 1) ....

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....ction 67). * Temporal formulation for deposit if not utilised: Difference: Document 1 prescribes deposit "shall be made before the filing of the return and not later than the due date applicable in the case of the assessee for filing the return of income u/s 263(1); and the proof of deposit shall be submitted along with such return." Document 2 states deposit "shall be made not later than the due date for filing the return of income under sub-section (1) of the said section ... and the proof of deposit shall be submitted along with the return on or before the due date for filing the return." The Bill uses a slightly different cross-reference style and repeats "not later than the due date" twice. Practical impact: Both require deposit ....

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....d amount according to the said scheme." Practical impact: Substantively equivalent; the Act's phraseology is slightly more formal and references the specific sub-section, improving cross-referential clarity. No substantive change to taxpayer rights. * General drafting and cross-reference polish: Difference: Document 1 generally employs more explicit sub-clause lettering and cross-references (e.g., explicit mention of "sub-clauses (i) to (iv) referred to as 'new asset'") and adds some minor clarifications (e.g., deems combined utilised amount and deposited amount to be cost). Document 2 conveys the same scheme but with small differences in labelling and repetition. Practical impact: Changes are largely drafting refinements....