TaxTMI 
TaxTMI 
Comparison of section 355 "Interpretation." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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....t state an effective date. Background & Scope Statutory hooks: Clause 355 of the Income Tax Bill, 2025. The clause supplies definitions that operate "In this Part," indicating these are interpretive provisions for the Part of the Bill dealing with registered non-profit organisations and the taxation framework applicable to them. Coverage: definitions of terms such as "anonymous donation," "approval," "donation," "commercial activity," "registration," "registered non-profit organisation," "related person," "relative," "residual income," "specified asset," "specified person," "specified provision," "substantial interest," and "value." The text contains certain cross-references to the Income-tax Act, 1961 (notably sections 10(23C), 11, 12, 1....
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....ers; relatives of certain persons; and concerns where specified persons have substantial interest. * "Relative": enumerated categories including spouse, siblings, siblings of spouse, lineal ascendants/descendants (no maternal/paternal qualifier in old text), spouses of those persons, and lineal descendants of siblings. * "Residual income": defined as "the total income, as reduced by regular income and specified income." * "Specified asset": an asset established to be directly acquired by the specified person out of income of the nature in Schedule II (Sl. No.1); or acquired during specified pre-registration periods depending on whether benefits were claimed; or transferred to another specified person within twelve months from the end ....
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....ity. Exceptions/Provisos The clause itself contains internal carve-outs: e.g., "registration" explicitly excludes approvals under the second proviso to section 80G(5) and section 354; specified-asset treatment depends on whether benefits were claimed or whether certain provisos applied u/s 12A(2) or the eighth proviso to section 10(23C). No additional provisos beyond those cross-references are contained. Procedural exceptions or threshold adjustments are Not stated in the document. Illustrations * Example 1: A donor gives Rs. 1.2 lakh to a registered non-profit during the tax year. Under the clause, that donor would qualify as a "related person" by exceeding the one lakh rupee tax-year threshold. * Example 2: A trust runs a tuition c....
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....s effected by this Part (i.e., treat income before applying the Part's special rules), which narrows interpretive ambiguity and can affect the taxable base for residual income calculations. * Definition of "anonymous donation" (clause a): Old version uses "as prescribed"; newer text uses "as may be prescribed." * Practical impact: Largely stylistic, but "may be prescribed" is the more conventional enabling formulation; practical difference is minimal unless prescription power is contested. * Related person - scope (clause h(vi)): Old version limits concerns where the person referred to in sub-clauses (i), (iii) or (iv) has substantial interest. Newer version expands the list to include sub-clause (v) as well. * Practical impact:....
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....in the newer text: The newer Section 355 includes clause (p) defining "wholly for charitable or religious purposes." This clause is absent in the old Bill text. * Practical impact: The addition supplies an express definition clarifying that "wholly for charitable or religious purposes" can mean charitable, religious, or both. Its absence in the old text left potential interpretive uncertainty. Practical Implications * Compliance and risk areas: Entities must track donor amounts against the defined related-person thresholds (one lakh per year; ten lakh aggregate) to identify related-person rules. Commercial activities are broadly captured, meaning many fee-generating services by non-profits will be within scope irrespective of applicati....