Comparison of Section 105 "Unexplained expenditure." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... be deemed income for that tax year and shall not be allowed as a deduction. The provision affects taxpayers and the assessing authority; no effective date is stated in the texts. Background & Scope Statutory hook: Section/Clause 105 titled "Unexplained expenditure" under the heading "AGGREGATION OF INCOME" in the Income-tax Act/Bill, 2025. The provision addresses circumstances in which expenditure incurred by an assessee in a tax year will be treated as income by deeming it unexplained and not deductible. No definitions (for example, of "expenditure", "source", "assessee", "satisfactory", or "Assessing Officer") are supplied in either document. No cross-references to other sections, rules, or schedules are included in the texts provided.....

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....os, thresholds, monetary limits, or procedural safeguards are included in either text. There is no provision for appeals, burden of proof allocation, evidentiary standards, or requirement that the Assessing Officer record reasons in writing in the texts supplied. There is no provision for partial acceptance beyond the deeming of "amount covered by such expenditure or part thereof" (which allows proportional deeming), but the criteria for apportionment are not stated. Illustrations * Example 1: A taxpayer incurs expenditure of Rs. 10 lakhs in a tax year and offers no explanation as to the source. Under sub-section (1)(a) Rs. 10 lakhs shall be deemed to be the taxpayer's income for that year and, under sub-section (2), shall not be a....

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....t does not specify that taxpayers should retain documentary evidence relevant to the source of expenditure (bank records, invoices, contracts, receipts). Specific records required, standards of proof, or timelines to produce evidence are Not stated in the document. Differences Between the Two Provisions & Practical Impact Topic Clause 105 of the Income Tax Bill, 2025 - Old Version Section 105 of the Income-tax Act, 2025 Sub-section (1)(b) wording "the explanation offered by the assessee is not satisfactory in the opinion of the Assessing Officer," (no express reference to "about the source") "the explanation offered about the source of such expenditure by the assessee is not satisfactory in the opinion of the Assessing Officer,....