Comparison of section 506 "Furnishing of information or documents by an Indian concern in certain cases." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....scribed income-tax authority where shares or interests in a foreign company/entity derive substantial value from assets located in India and are held through the Indian concern. The provision affects Indian concerns, foreign entities with India-located assets, and the income-tax department. Effective date: Not stated in the document. Background & Scope Statutory hooks: Clause 506 of the Income Tax Bill, 2025 - Old Version and the cross-reference to section 9(9)(a) (as stated in the clause). The clause addresses information obligations of an "Indian concern" where a non-resident company or entity's share or interest derives substantial value from India-located assets and where such assets are held, directly or indirectly, through an In....

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....gislative intent indicated by the text: the clause is designed to enable the tax authority to determine income accruing or arising in India by compelling domestic intermediaries (Indian concerns) to provide relevant data about foreign entities whose economic value derives substantially from India. The cross-reference to section 9(9)(a) indicates the clause is linked to the provision that identifies when value derives substantially from India-located assets (the text does not reproduce section 9(9)(a) itself). The obligation is procedural and targeted at information collection to facilitate substantive assessment under the income-tax framework. Not stated in the document whether penalties or consequences for non-compliance are provided elsew....

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....sessment, reassessment, transfer pricing, GAAR, or treaty relief procedures. The clause contemplates subordinate legislation ("as prescribed") for period, manner and authority, so the implementing rules and notifications will be critical to operationalise the obligation. Comparison of Provisions - Differences and Practical Impact Two textual sources were provided: Section 506 of the Income-tax Act, 2025 (Document 1) and Clause 506 of the Income Tax Bill, 2025 - Old Version (Document 2). The principal differences and practical impacts are: * Cross-reference: Document 2 cites section 9(9)(a) whereas Document 1 cites section 9(10)(a). * Practical impact: The change in cross-reference suggests a substantive amendment or renumbering of the....

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....require furnishing for determining income accruing or arising in India. The change from "section" to "clause" signals a drafting shift between bill-stage language and enacted statute drafting conventions. Not stated in the document whether this affects interpretation. Practical Implications * Compliance and risk areas: Indian concerns that act as holding vehicles, subsidiaries, agents, trustees or conduits for foreign entities should anticipate a statutory duty to produce specified records when the foreign entity's shares derive substantial value from India-located assets. Failure to comply may expose the Indian concern to enforcement measures (Not stated in the document whether penalties are provided). * Record-keeping/evidence: b....