Comparison of Section 124 "Deduction in respect of employer and assessee contribution to pension scheme of Central Government." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... It affects individual taxpayers who are salaried or otherwise employed, employers who contribute to such pension schemes, and guardians making deposits for minors. Effective date or enactment timing: Not stated in the document. Background & Scope Statutory hooks: Clause 124 is located within the Bill under the chapter heading "Deductions in respect of certain payments" and operates as a proposed tax deduction provision within the Income Tax framework. The text addresses employer contributions to pension schemes notified by the Central Government, individual contributions to the same schemes, deductions available in respect of deposits made for minors, and the tax treatment on receipt of accumulated amounts or annuity payments. Definiti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion Legislative intent and interpretive principles indicated by the text: The clause aims to incentivise pension savings by granting tax deductions for employer contributions (with different caps for government versus non-government employers) and to allow individuals and guardians to obtain tax relief for personal deposits into notified pension schemes. The 14%/10% split suggests a policy recognition of government employers' higher contribution norms. The clause also employs deeming provisions to tax withdrawals or annuity receipts where tax benefits were earlier claimed. The limitation on deductions overlapping with section 123 is an anti-double-dip measure. Exceptions/Provisos Carve-outs and conditions expressly provided in the Cl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r provisions explicitly mentioned: sub-section (5) cross-references section 123 to prevent overlapping deductions. No other specific Rules, Notifications or Circulars are referenced in the Clause. For links to other legislative or administrative instruments beyond section 123, Not stated in the document. Differences between Section 124 of the Income-tax Act, 2025 and Clause 124 of the Income Tax Bill, 2025 - (Old Version) * Parent/guardian terminology in sub-section (4): Clause 124 (Bill): refers to the assessee "being the guardian of such minor". Section 124 (Act): refers to the assessee "being the parent or guardian of such minor". Practical impact: Act explicitly includes parent (in addition to guardian) as a person permitted to ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... lacks these specifics. This is a substantive expansion of coverage in the Act to specific schemes and modes of transfer. * Definition/term clarification (sub-section (13)): Section 124 (Act) adds clause (13) defining "pool corpus" and "individual corpus" by reference to a specific Department of Financial Services Notification (F. No. FX-1/3/2024-PR dated 24 January 2025), and clarifies the meaning of "salary". Clause 124 (Bill) includes the "salary" definition but does not include clause (13) or the notification cross-reference. Practical impact: Act ties certain terms to an external notification, creating a linkage to administrative definitions and making the provision more scheme-specific; Bill is more generic. This affects interpr....