Comparison of section 223 "Tax on income of unit holder and business trust." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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.... responsible for making payments on behalf of a business trust. Effective date or commencement is Not stated in the document. Background & Scope Statutory hook: Clause 223 of the Income Tax Bill, 2025 - titled "Tax on income of unit holder and business trust" and placed under "Special provisions relating to pass-through entities." The clause addresses (i) attribution of nature and proportion of distributed income to unit holders, (ii) charging of tax on business trusts' total income, (iii) treatment of certain distributed income items as unit holder income in the tax year, (iv) a specified exclusion from the deeming rule, and (v) a reporting obligation on the payer. Definitions or extended explanations of terms (for example, "business....

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....uch form and manner, as prescribed, giving the details of the nature of the income paid during the tax year and such other details, as prescribed. Interpretation The text indicates a legislative intent to treat pass-through distributions from business trusts transparently - attributing to unit holders the same character and proportion as enjoyed by the trust, and ensuring certain distributions are taxed in the hands of unit holders in the relevant tax year. The use of "irrespective of anything contained in any other provisions of this Act" signals a non-obstante clause that elevates the deeming rule over potentially conflicting provisions. The charging of the business trust's total income at the maximum marginal rate (subject to secti....

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....rescribed form/timelines (both Not stated in the document). The clause does not itself reproduce definitions or cross-refer to SEBI regulations, but a marginal note in the document indicates the clause provides for special taxation regime for Infrastructure Investment Trusts and Real Estate Investment Trusts under their respective SEBI regulations; however, the clause text does not incorporate or define those regulatory regimes. Any further interaction with rules, notifications or administrative guidance is Not stated in the document. Practical Implications * Compliance and risk areas: The deeming provision in sub-section (1) requires accurate characterisation by the trust of income streams so that unit holders are informed and taxed acc....

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.... in the document. * Definitions, Schedule V content, and procedural prescriptions (forms, timelines, prescribed authority) are Not stated in the document. * The clause is presented as a special regime for pass-through entities; the document notes an application to REITs/IITs, but the text of the clause does not itself define those entities or reference SEBI regulations. Differences between Clause 223 of the Income Tax Bill, 2025 (Old Version) and Section 223 of the Income-tax Act, 2025 Identified differences based strictly on the two provided texts: * Sub-section (2): Old Version references "sections 196 and 197"; the later Section 223 adds "and 198" (i.e., references to sections 196, 197 and 198). Practical impact: the le....