Comparison of Section 205 "Conditions for tax on income of certain companies and co-operative societies." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....by laying down eligibility conditions and administrative safeguards. It matters to companies and co-operative societies seeking concessional tax rates under the cited provisions, and to revenue authorities supervising compliance. Effective date or decision date: Not stated in the document. Background & Scope The provision sits within the Bill's "New tax regime" and is a statutory hook for concessions referenced in sections 199(1)(c)(i)(C), 200(1)(a)(iii), 201(3)(a)(iii), 203(1)(a)(ii) and 204(3)(a)(ii). Clause 205 prescribes how "total income" is to be computed for these purposes by excluding certain deductions or exemptions (narrowly identifying sections from the principal Act such as sections 33(8), 45(3), 46, 47(1)(a), 48, 49 and 1....

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....itation of business activity to manufacture/production (plus related research/distribution). The AO is authorised, for purposes of section 201, to determine deemed profits where related-party or other arrangements yield more than ordinary profits, and where such arrangements involve a specified domestic transaction (section 164), the arm's length principle (section 173(a)) applies. Interpretation The text manifests a legislative intent to restrict the scope of preferential taxation by (a) mandating computation of total income without several specific deductions or exemptions, and (b) placing qualitative/quantitative conditions on the nature and origin of the business and on the use of assets. The inclusion of an AO power to determine ....

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....d in India; no depreciation was previously claimed for that machinery anywhere - it falls within "permitted machinery or plant used outside India." (Derived from sub-section (6)(b)(ii) as numbered in the Bill.) * Example 3: A group arranges intra-group transactions yielding above-ordinary profits; the AO may determine deemed excess profits and treat that excess as income chargeable u/s 201 at the specified concessional rate, applying arm's length pricing if the transaction is a specified domestic transaction. (Derived from sub-section (5).) Interplay The clause cross-references multiple provisions of the Income Tax Act, 1961: sections 33(8), 45(3), 46, 47(1)(a), 48, 49, 80-ID(6) meanings for "hotel" and "convention centre," section ....

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....on in sub-section (4) and expressly states it applies "for the purposes of sections 201 and 204." * Practical impact: in the Act the assessing officer's power to compute deemed profits is extended to both sections 201 and 204, broadening the circumstances where the AO may attribute excess profits and charge them at the specified concessional rates; taxpayers facing assessments u/s 204 may therefore be subject to these transfer-pricing style adjustments. * Reordering and numbering: Substantive topics (guidelines, parliamentary laying, AO powers, definitions) are presented in different sub-section order between the Bill and the Act. * Practical impact: reordering does not change substance (aside from the differences above) but may a....