Comparison of Section 104 "Unexplained asset." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....g Officers) and advisers in personal taxation and compliance. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: both texts appear as Clause/Section 104 under the heading "AGGREGATION OF INCOME" in the Income Tax Bill/Act, 2025. Both define circumstances under which an asset found to be owned by or belonging to an assessee, but not recorded (or where there is an excess over recorded amount), may be deemed income. Both texts provide a non-exhaustive definition of "asset" in a separate sub-paragraph, expressly including money, bullion, jewellery, virtual digital asset or other valuable article. No further definitions or explanations (for example, of "value", "found", "books of account" or "virtu....

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....ing the Assessing Officer's satisfaction with the explanation; no objective standards or burden-allocation rules are provided in the text. Exceptions/Provisos Not stated in the document. Illustrations * Example 1 (consistent with the text): An assessee is found to own unreported jewellery. The assessee cannot satisfactorily explain the source of acquisition; the value of that jewellery is therefore deemed the assessee's income for the tax year in which the jewellery was found. * Example 2 (illustrating the textual difference): Under the Bill language, if an asset's market value (amount of such asset) exceeded its recorded amount in books, the excess could be treated as income; under the Act language, the focus would b....

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....ments, sale/purchase agreements, or corroborating third-party records) is critical. The Act's emphasis on "amount expended in acquiring" (as compared with mere "amount of such asset" in the Bill) particularly suggests retaining evidence of acquisition cost or expenditure. Key Differences Between Bill (Old Version) and Enacted Section, and Practical Impact * Wording on measurement of asset: Bill-"amount of such asset"; Act-"amount expended in acquiring such asset." * Practical impact: The Bill language could be read to permit use of an asset's present or market value as the point of comparison with books; the Act restricts or narrows the comparison to the expenditure made to acquire the asset. This change tends to focus the asse....

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....xt supplies valuation mechanics or burdens (who proves what), practical disputes over valuation, timing, and satisfactory explanation are likely to arise and be resolved through assessment proceedings or appellate adjudication. Interpretive and Procedural Gaps (as per documents) * The document does not state valuation methodology for "value" or "amount expended in acquiring", nor does it provide rules for assets acquired by non-monetary means (gifts, inheritance, swaps) - Not stated in the document. * The document does not state the burden of proof, standard for "satisfactory" explanation, or requirements for notice and hearing before deeming income - Not stated in the document. * The document does not state how virtual digital asset....