Comparison of section 397 "Compliance and reporting." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....ns, and procedures for government offices and payments to non-residents. The provision primarily affects deductors/collectors, payees/collectees, banks and government pay-and-accounts officers. Effective date or enactment timing: Not stated in the document. Background & Scope Statutory hooks: Clause 397 is within the chapter dealing with Deduction and collection at source. It interacts with sections 392-395 and cross-refers to section 393 and section 200 of the Income-tax Act, 1961 (as cited in specific places). The clause regulates (i) TAN allotment and mandatory quoting, (ii) PAN furnishing by persons entitled to receive or paying amounts subject to TDS/TCS, (iii) prescribed consequences for non-furnishing of PAN (higher deduction/colle....

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....* Exceptions for certain non-residents (sub-clauses (2)(c) and (2)(d)). * Limits on rent deduction for last month where higher rates apply (sub-clause (2)(e)). * Invalidity of declarations/applications where PAN is not furnished and consequences for deductor/collector behaviour (sub-clauses (2)(f)-(g)). * Payment of deducted/collected tax to the credit of the Central Government within prescribed time; obligation to deliver prescribed statements after payment (sub-clauses (3)(a)-(b)). * Specific reporting to buyer/licensor/lessee u/s 394(1) (sub-clause (3)(c)). * Obligations to furnish information on payments to non-residents (sub-clause (3)(d)). * Government office reporting where payments are credited without production of a ch....

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....ong-term bond interest and other prescribed payments (sub-clause (2)(c)). * Non-application of higher collection rates where the non-resident lacks a permanent establishment in India (sub-clause (2)(d)). * Limit on deduction in rent cases to the rent payable for the last month of the tax year or tenancy (sub-clause (2)(e)). * Board's discretion to require statements from payers beyond the specified banking/co-operative/public companies (sub-clause (3)(g)(ii)). Illustrations * Example 1: A new contractor required to deduct tax who has not been allotted a TAN must apply to the Assessing Officer for TAN within the prescribed time; until that allotment the contractor is still bound by PAN furnishing and deduction rules. (Factual sp....

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....7 of Income-tax Act, 2025) and Document 2 (Clause 397 of the Income Tax Bill, 2025 (Old Version)) * Table references in exemptions (sub-clause (1)(c)(i)): Document 1 references Table: Sl. No. 2(i), 3(i) and 6(ii); Document 2 references Table: Sl. No. 2(i), 3(i) and 5(ii). * Practical impact: a change in the table entry number alters which categories of payers are exempted from the application requirement for a tax deduction and collection account number (TAN). This may expand or narrow the exemption pool depending on the substantive content of the referenced table entries (Not stated in the document). * Use of the term "valid" in relation to PAN (sub-clause (2)(a) and (2)(f)): Document 1 requires furnishing of a "valid Perma....

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....ctical impact: the difference between "not exceeding" and "less than" may affect inclusivity of boundary amounts (i.e., whether the exact threshold value is included). The practical effect depends on the numerical threshold (Not stated in the document). * Minor drafting/terminology variations: Several small textual differences (e.g., "apply for allotment... to the Assessing Officer" vs "apply to the Assessing Officer for allotment..."; "amount collected" vs "sum collected") appear. * Practical impact: largely stylistic, unlikely to alter substantive meaning; however, drafting precision may affect interpretation in marginal cases (Not stated in the document). * Reference to section 200 of the Income-tax Act, 1961: Document 1 expressly ....