TaxTMI 
TaxTMI 
Comparison of Section 102 "Unexplained credits." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....2 is part of the Bill dealing with "Aggregation of Income" and is the Bill-version counterpart of Section 102 as enacted. The provision targets sums "found credited in the books of account maintained by the assessee for any tax year." It distinguishes between (a) absence of any explanation and (b) explanation not being satisfactory in the Assessing Officer's opinion. Definitions: the Bill does not provide formal definitions of "credit," "books of account," "satisfactory," or "Assessing Officer" within the clause; therefore, existing meanings under the income-tax law and general usage would be applied. Not stated in the document: legislative intent beyond the text; threshold tests for "satisfaction"; procedural safeguards; burden of proo....
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....y where the person in whose name the credit is recorded is a "venture capital fund or a venture capital company as referred to in Schedule V (Table: Sl. No. 6)." The text does not further elaborate on Schedule V within the clause. Interpretation The clause operates as an anti-evasion/anti-avoidance charging provision: where credits lack credible explanation, the taxing authority may convert them into taxable income. The statutory language vests significant evaluative discretion in the Assessing Officer ("in the opinion of the Assessing Officer," "has been found to be satisfactory"), signalling an administrative fact-finding role. The provision invokes a deeming negative: explanations are "deemed to be not satisfactory" in specified contex....
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....icable. The clause does not state whether sub-section (1) still applies in full; the text suggests the special deeming provisions are disapplied while the general unexplained-credit charge remains available. (Interplay ambiguous - see below.) Interplay The clause itself does not cite other rules, notifications or procedural provisions. It relies on the Assessing Officer's evaluative power, which ordinarily will interact with assessment procedure provisions, evidence rules, search/seizure provisions, and appellate remedies elsewhere in tax law. Not stated in the document: how Clause 102 interfaces with provisions on burden of proof, requisition of documents, summons, or the treatment of explained credits under other anti-abuse rules. T....
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....ngs and certain company receipts require supporting explanation by the person in whose name the credit is recorded; venture capital funds/companies referred in Schedule V are excluded. * Practical impact: the policy and effect are the same under both versions; differences are limited to drafting and clarity. Practical Implications * Compliance and risk areas: Taxpayers should ensure contemporaneous documentary evidence for credits recorded in books-loan agreements, bank transfers, board resolutions for corporate receipts, identity and residence details of counterparties. Absent satisfactory explanation, the AO may convert credits into taxable income. * Third-party corroboration: For loans/borrowings and private-company share receipts....