TaxTMI 
TaxTMI 
Comparison of section 411 "When tax payable and when assessee deemed in default." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)
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.... waive or reduce interest, and special rules on foreign remittance constraints. It primarily affects taxpayers who receive notices of demand and tax authorities involved in collection and recovery. Effective date or decision date: Not stated in the document. Background & Scope Statutory hooks: Clause 411 of the Income Tax Bill, 2025 sits within Division D - Collection and Recovery, and cross-refers to section 289 (notice of demand) of the same Bill and to the Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 (11 of 1964). It also cross-refers to various sections (287, 288, 359, 363, 365(10), 368, 377, 378) and to section 245D(4) of the Income-tax Act, 1961 (43 of 1961) for consequences of subsequent orders affe....
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.... the portion after that date is to be calculated at 1.5% per month; (8) the Principal Chief Commissioner/Chief Commissioner/Principal Commissioner/Commissioner may, on application, reduce or waive interest if payment causes genuine hardship, default was due to circumstances beyond control, and the assessee has cooperated in inquiry/proceedings; (9) orders accepting or rejecting such applications are to be passed within twelve months from the end of the month in which application is received; (10) no rejecting order shall be passed unless the assessee is given an opportunity of being heard; (11) failure to pay at the place and to the person mentioned in the notice within specified/extended time renders the assessee in default; (12) defa....
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....ence of explicit waiver/reduction criteria and procedural safeguards (timeline, hearing) indicates an intent to balance revenue protection with taxpayer hardship considerations. Exceptions/Provisos Key carve-outs: (i) the Assessing Officer may shorten the payment period with prior Joint Commissioner approval; (ii) waiver/reduction of interest is available under specified hardship/cooperation conditions; (iii) instalment default rules deem full liability on single instalment default; (iv) where foreign law prevents remittance, the AO must not treat the taxpayer as in default for the non-remittable portion and must continue that treatment until removal of the restriction; (v) no duplicate interest where another section levies interest for t....
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....equences. No additional rules, notifications or forms are specified in the Clause itself. Any detailed procedural aspects-e.g., format of application for instalments or for waiver-are Not stated in the document. Differences between the two provisions and practical impact * Transitional interest-rate provision: Income Tax Bill, 2025 (Old Version) contains a specific transitional provision at sub-section (7) providing that for any period commencing on or before 31st March, 1989 and ending after that date, interest under sub-section (3) shall, in respect of so much of such period as falls after that date, be calculated at 1.5% per month (Bill: sub-section (7)). The enacted Section 411 text (Income-tax Act, 2025) does not contain this transi....
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....ng/clarifying edits. They do not, on their face, change the operative mechanics (30-day default period; 1% simple monthly interest) but may affect interpretive clarity on temporal scope of interest calculation. Practical Implications * Compliance and risk areas: strict 30-day compliance window for payment of notices of demand (subject to permitted shortening by AO with Joint Commissioner approval); exposure to simple interest at 1% per month from day after due date until payment; risk of acceleration of full outstanding amount on instalment default; potential continued liability during appellate proceedings since notices remain valid pending disposal. * Record-keeping/evidence points: taxpayers should retain and produce applications fo....