Comparison of section 341 "Application of income." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....use 341 of the Income Tax Bill, 2025 (Old Version) addressing "Application of income" of a registered non-profit organisation. Context: governs what sums may be treated as application of income for non-profit organisations to ascertain compliance with conditions for tax treatment. Coverage: sums applied for charitable/religious purposes in India, donations to other registered non-profits, corpus donations, reinvestment of corpus in permitted modes u/s 350, repayment of loans/borrowings, and exclusions. Definitions or further explanations: Not stated in the document beyond references to sections 35(b)(i), 36(4)-(7), and section 350. Statutory Provision Mode Text & Scope Clause 341, Income Tax Bill, 2025 (Old Version) sets out what sums ar....

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....ting corpus transfers as qualifying applications. The Bill articulates a cross-reference approach whereby existing tax-law tests (sections 35 and 36 provisions) determine allowability. The inclusion of a prescribed percentage treatment for donations to other registered organisations (85%) indicates a legislative policy to permit a substantial portion of inter-charity donations to count as application while retaining a residual disallowance (15%). Exceptions/Provisos Explicit exceptions in the Bill text: corpus donations to other registered non-profit organisations are treated as nil for application purposes. Sub-section (3) excludes depreciation/allowances already claimed and set off of earlier excess applications. Sub-section (4) exclude....

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....)(i), 36(4)-(7) and section 350 for determining allowable payments and permitted modes of investment. It also cross-refers to "this Part" and corresponding provisions of the Income-tax Act, 1961 for compliance history. Specific rules, notifications or circulars beyond these textual cross-references are Not stated in the document. Differences between the two provisions and practical impact * Explicit treatment of corpus donations paid to other organisations: * Bill (Clause 341, Document 2): sub-clause (1)(c) expressly states "nil, with respect to any sum paid as a corpus donation to any other registered non-profit organisation." * Act (Section 341, Document 1): sub-section (3)(c) provides that "any sum paid as a corpus donation to a....

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.... application mechanics): * Bill (Document 2): does not contain provisions comparable to Section 341(5)-(8) of the Act concerning the 85% of regular income requirement, shortfall treatment as deemed application, timing for application of deemed application, and exercise of option. * Act (Document 1): contains sub-sections (5)-(8) establishing an 85% regular income normative target, permitting registered organisations to elect to treat shortfall as deemed application, specifying timing rules for application, and prescribing exercise of option on or before the due date u/s 263(1) for furnishing return of income. Practical impact: The Act introduces a compliance mechanism (85% of regular income) and a deemed application regime with proced....

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.... * Express exclusions and structuring differences: * Bill (Document 2): The exclusions list in sub-section (3) comprises clauses (a) and (b) (depreciation/allowance previously claimed as application; set off of excess application), but does not include clause (c) of the Act (which there is included in Act sub-section (3)(c)). * Act (Document 1): explicitly includes three exclusions (a), (b), (c) in sub-section (3), making the treatment of corpus donations as excluded clearer within the exclusions list. Practical impact: The Act's exclusions list is more exhaustive. The Bill's omission (as presented) could cause interpretive uncertainty until clarified by other provisions or parliamentary amendments. Practical Implications ....