Comparison of Section 135 "Deduction in respect of certain donations for scientific research or rural development." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....stitutions. It matters to donors (individuals and entities) considering donations to such bodies and to tax administration when verifying claims. Effective date or decision date: Not stated in the document. Background & Scope Statutory hook: Clause 135 of the Income Tax Bill, 2025 (Old Version) sets out a deduction in computing total income for amounts paid in the tax year to certain research associations, universities, colleges or other institutions approved u/s 45(3)(a)(i) or 45(3)(a)(ii) for use in scientific research or research in social science/statistics. The clause is placed under "Deductions in respect of certain payments." Definitions: Not stated in the document beyond the references to "research association", "University, colle....

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....-science/statistical research by providing a tax deduction subject to prescribed eligibility and evidentiary requirements. The denial of the deduction where the donor has business/profession income suggests a policy decision to exclude commercial donors from this benefit, potentially to avoid conflation with business expenditure. The cash payment threshold reflects a preventative measure against untraceable cash donations. The verification provision places reliance on information supplied by the recipient institution and internal risk-based checks by the tax Board. The clause does not expressly state the quantum or ceiling of deduction; Not stated in the document. Exceptions/Provisos Carve-outs: Clause 135(2) contains two explicit excepti....

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....ot include an express anti-double-claim provision present in the enacted Section 135 (Not stated in the document for the Bill), nor does it specify whether the deduction is subject to any overall ceiling or percentage limit (Not stated in the document). Differences between the two provisions and practical impact * Presence of an additional subsection: The enacted Section 135 (Document 1) contains a subsection (5) which is absent from Clause 135 in the Bill (Document 2). Subsection (5) in the enacted text provides: "Where a deduction for any tax year has been claimed and allowed in respect of any payment of the nature referred to in this section, no deduction in respect of such payment shall be allowed under any other provision of this Ac....

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....ct: Minor grammatical difference-does not change the core rule that deduction shall not be denied merely because approval to the recipient was later withdrawn. Practical Implications * Compliance and risk areas: Donors must ensure that recipient institutions are approved under the referenced section, that donations are not in cash exceeding Rs 2,000, and that the donor's gross total income does not include business/profession income if intending to claim deduction. The verification mechanism under Clause 135(4) places significance on the accuracy and timely furnishing of information by recipients to the tax authority; donors may face disallowance if the recipient fails to furnish required information or if verification raises queries....