Comparison of section 250 "Application of seized or requisitioned assets." 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

....The provision affects taxpayers from whose custody assets are seized, and the tax department (Assessing Officer/Principal Chief Commissioner etc.). Effective date or enactment date: Not stated in the document. Statutory Provision Mode Text & Scope Clause 250 (Old Version) in the Income Tax Bill, 2025 provides statutory authority for application of assets seized u/s 247 or requisitioned u/s 248 to satisfy tax liabilities. The provision empowers the Assessing Officer to recover "the tax liability (including penalty or interest payable other than advance tax)" from seized assets and defines the aggregate of such liability in four sub-clauses: (a) existing liabilities under this Act or specified other Acts; (b) liabilities determined up to c....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lty other than advance tax are included, while advance tax is excluded. Illustrations * Example 1: A search yields cash and jewellery. The AO, under clause 250(1)(b), applies cash first towards liabilities determined upon completion of assessment consequent to the search; if remaining liabilities persist, non-monetary assets may be sold and proceeds applied. (Illustration consistent with text.) * Example 2: After assessment completion, further discrepancies are discovered and additional tax is determined before the assets are released. Under clause 250(1)(c) the AO may apply seized assets to that additional liability until release. (Illustration consistent with Bill text.) * Example 3: The person applies for release within 30 days af....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion of assessment/reassessment/recomputation and for block period under Part B of Chapter XVI. * Practical impact: The enacted text appears narrower in explicitly covering liabilities arising after assessment completion up to release; the Bill's clause would have allowed continuing accruals determined after assessment to be recovered from seized assets until release. Removing that explicit clause reduces the revenue department's clear statutory authority to apply seized assets to liabilities determined post-assessment and may limit recovery in respect of liabilities that crystallise after assessment completion (unless covered elsewhere). This change shifts possible risk to the Department on post-assessment determinations and benef....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The enacted wording may strengthen procedural protections by making the taxpayer's statement central, but could also be read to formalize a strict documentary burden for release. * Authorisation and distraint mechanics (sub-section (5)): Both texts deem non-monetary assets to be under distraint and allow prescribed manner for recovery. The enacted Section explicitly references section 416(7) authorisation and says recovery shall be "effected in such manner as may be prescribed." The Bill uses nearly identical language ("in the manner as prescribed"). * Practical impact: Largely semantic; the enacted text's explicit cross-reference to section 416(7) underscores reliance on distraint procedures and may tighten administrative linka....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he text places importance on "satisfying" the AO about nature and source (Bill) or furnishing explanations (enacted). Parties should retain documentary proof of acquisition, chain of title, receipts, bank records, valuations and any contemporaneous material to substantiate source and nature. Maintain chronological records of assessments, notices, and any settlement applications (section 245C) that may affect the claimed liabilities. Key Takeaways * Clause 250 permits recovery of tax liabilities (including penalty/interest, excluding advance tax) from assets seized or requisitioned under the Bill. * The Bill expressly allowed application to liabilities determined after assessment up to release; the enacted version narrows or rephrases t....