Comparison of Section 153 "Deduction for interest on deposits." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....eposits with banks, cooperative banks and Post Offices. Effective date or enactment timing: Not stated in the document. Background & Scope Statutory hooks: Clause 153 sits within the chapter heading "Deductions in respect of other incomes." It addresses deduction from gross total income where that income includes interest on deposits. The clause identifies assessees eligible for deduction: (a) individuals not being senior citizens, (b) individuals being senior citizens, and (c) Hindu undivided families. Eligible deposit takers are defined by reference to existing regulatory statutes - Banking Regulation Act, 1949 (for banking companies), cooperative societies engaged in banking (including cooperative land mortgage/development banks), and ....

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..../HUF). The deduction is account-specific: savings accounts are central to the non-senior/HUF benefit; the senior citizen provision explicitly refers to savings accounts but also states "including time deposits." This combination may require interpretive attention, as "savings account" and "time deposits" are traditionally distinct categories. The legislature's inclusion of "time deposits" within the senior citizen sub-clause signals an intent to extend benefit to interest from fixed-term deposits for senior citizens, but restricting the words "savings account" to both categories may create an internal tension requiring purposive construction. The restriction in sub-section (3) prevents pass-through of the concession to partners/members ....

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....A partner receives share of interest income from a savings account held by the firm. Clause 153(3) bars deduction in computing the partner's total income in respect of such income. (Direct textual application.) Interplay The clause references the Banking Regulation Act, 1949 and Post Office Act, 2023 for institutional definitions. Not stated in the document: any interaction with other specific sections of the Income-tax Code concerning income classification (e.g., treatment of interest as "income from other sources") or rules governing computation of gross total income. Not stated in the document: whether the clause displaces general provisions on deduction elsewhere in the Code or specific filing/conduct requirements in rules or noti....

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....e monetary ceiling and exclusion of time deposits. * Structure and placement of prohibitions when deposits are held by firms/AOPs/BOIs (sub-sections (3) and (4)): The Act separates prohibitions: (3) bars deduction for the non-senior/HUF category where income referred to in sub-section (2)(a) derives from deposits in a savings account held by/for a firm/AOP/BOI; (4) separately bars deduction for the senior citizen category where income referred to in sub-section (2)(b) derives from deposits held by/for such entities. The Bill consolidates the restriction into a single sub-section (3) referring to "where the income referred to in this section is derived from any deposit in a savings account held by, or on behalf of, a firm, an association o....

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....ding time deposits" for senior citizens) could give rise to disputes concerning eligibility of particular deposit types; taxpayers and practitioners should be prepared to justify characterization of accounts. The prohibition in sub-section (3) requires attention where deposits are held by firms/AOPs/BOIs to prevent incorrect claims by partners/members. * Record-keeping/evidence: Retain bank/postal account statements, deposit receipts, account opening documents identifying account type, and evidence of senior citizenship status (if claiming the senior citizen ceiling). Where deposit is held on behalf of a firm/AOP/BOI, retain documentation demonstrating beneficial ownership/arrangement to establish whether the bar in sub-section (3) applie....