TaxTMI 
TaxTMI 
Comparison of section 293 "Computation of total undisclosed income of block period." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....atment for international/specified domestic transactions, firm-level adjustments, and carry-forward of losses. It matters to taxpayers subject to searches or requisitions, assessing authorities, and tax practitioners. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 293 operates under the draft Income Tax Bill, 2025 and references section 292(1) (definition of block period), and multiple provisions of the Income-tax Act, 1961 (including sections 143, 144, 147, 153A, 153C, 270, 271, 279, 166, 33(11) etc. mentioned elsewhere). The provision covers computation of "total income" for the block period arising in the context of search, survey or requisition proceedings under the Bill. Defini....
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....ck period as reduced by specified sub-items. Clause (6) directs that certain loss situations shall be ignored for the purposes of subsections (1) and (5). Clauses (7)-(8) restrain set-off of brought-forward losses and allow carry-forward after the block period. The clause spans aggregation, exclusion, computation methodology, and loss treatment. Interpretation The text indicates legislative intent to assemble a composite tax base for the block period from declared undisclosed amounts, incomes already assessed/declared prior to search, and incomes determinable from books. It distinguishes incomes that must be excluded from block assessment (notably certain transfer-pricing-type transactions for a restricted period) and contemplates AO dete....
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....urring between 1st April and the execution date of the last authorisation is detected from requisitioned documents, that income must be excluded from the block-period computation and assessed under other provisions per clause (3). Interplay The clause cross-references multiple assessment and procedural provisions of the Income-tax Act, 1961 and the Bill itself: notably sections concerning prior assessments (270, 271, 279, 143, 144, 147, 153A/153C), procedure for declarations (section 294), specified domestic/international transaction provisions (section 166), and carry-forward/set-off provisions (Chapter VII and section 33(11)). The clause directs certain matters (transfer-pricing-type incomes) out of block assessment into ordinary assess....
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....ection (4). The Act moves much of the Bill's list into exclusions in subsection (2). Practical impact: The Act's reorganisation clarifies that the "total undisclosed income" comprises two components - declared and AO-determined - while specifying many previously listed categories as exclusions. This reordering makes the scope of block assessment narrower and more precise for practitioners calculating the taxable base. * Exclusions/ignored items: The Bill (Doc 2) contains explicit clauses (1)(b) and (c) listing incomes assessed under specified sections prior to the search and incomes declared in response to certain notices. It also has a separate sub-section (6) listing categories to be ignored when they are losses. The Act (Doc....
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....nsfer-pricing-type items): The Bill (Doc 2) places the non-consideration rule in subsection (3) with a three-part condition list (a) and (b)(i)-(iii). The Act (Doc 1) places a similar rule in subsection (5) but phrases it negatively: if such income pertains to specified shorter period and arises from search/requisition or books entries, then irrespective of section 292(6) (i) such income shall not be considered for block undisclosed computation; (ii) it shall be considered in assessment under other provisions. Practical impact: Both texts exclude certain international/domestic specified transactions from block computation for a limited period, but the Act's drafting emphasises "irrespective of provisions of section 292(6)" and separate....
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....ve reorientation that benefits taxpayers by limiting the charge to undisclosed components only. Practical Implications * Compliance and risk areas: Taxpayers must identify and segregate declared undisclosed income, incomes previously assessed or returned before search, and book-based incomes for the three temporal windows to determine block-period exposure. Particular care is required to identify international/specified domestic transactions that may be carved out and assessed separately. * Record-keeping/evidence points: Maintenance of books and contemporaneous documents for the three delineated periods is critical to support income determinations made on the basis of entries "maintained in the normal course." Copies of prior assessme....