Comparison of SCHEDULE V "INCOME NOT TO BE INCLUDED IN TOTAL INCOME OF CERTAIN ELIGIBLE PERSONS INCLUDING INVESTMENT FUNDS, BUSINESS TRUSTS AND THEIR UNIT HOLDERS" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

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....d from total income for specified eligible persons, including investment funds, business trusts, venture capital vehicles and certain foreign sovereign/pension wealth investors. It matters to institutional investors, business trusts (including REITs/InvITs), alternative investment funds, venture capital entities, and certain foreign public investment vehicles. Effective date or decision date: Not stated in the document. Background & Scope The Schedule is framed as a supplementary schedule to the Income Tax Bill, 2025, relying on section 11 for placement ("See section 11"). It creates explicit exclusions from "total income" for defined classes of persons and specified income streams, subject to conditions set out in the Table and Notes. Th....

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....ncome chargeable under "Profits and gains of business or profession". * Sl. No.3: A business trust is exempt from including interest/dividend received or receivable from a "special purpose vehicle" (defined as an Indian company in which the trust holds controlling interest and any specific percentage as required by registration law). * Sl. No.4: A business trust that is a real estate investment trust is exempt from including income by way of renting/leasing/letting out real estate assets owned directly by such trust (with "real estate asset" cross-referenced to SEBI REIT regulation 2(1)(zj)). * Sl. No.5: Any unit holder of a business trust is not required to include distributed income u/s 223, subject to carve-outs: exemption will not....

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....ty/exemption for institutional investment vehicles and certain foreign public investors, with protective conditions and calculation rules. Interpretive principles implicit in the text include reliance on external definitions and regulatory instruments to determine qualifying investments (SEBI/AIF/RBI instruments). The Schedule grants the Board guideline-making power for interpretive/implementation difficulties in respect of Sl. No.7, subject to prior approval of the Central Government and parliamentary laying, and states such guidelines will be binding on the Income-tax Authority and the specified person. Exceptions/Provisos The Schedule contains several carve-outs: Sl. No.5 limits exemption for unit-holders where the distributed income i....

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....t also depends on SEBI regulations (REIT Regulations, AIF Regulations), IFSC Regulations, RBI notifications/directions and other external instruments for qualifying definitions and regulatory thresholds. The Schedule contemplates guidelines by the Board in certain situations, which will be binding once issued with Central Government approval and laid before Parliament. Differences between SCHEDULE V - Income-tax Act, 2025 (Document 1) and Income Tax Bill, 2025 - Old Version (Document 2) * Scope descriptions and defined cross-references: Document 1 uses phrasing like "being an eligible InvIT" in Note 5(f) whereas Document 2 says "a business trust" in Sl. No. 7(iii)(A). There are several small differences in the wording of definitions and ....

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.... or phrasing in Document 1). * Practical impact: Could affect which external regulations are treated as the relevant regulatory standard for qualifying entities; in practice, tax administrators and regulated entities will look to the final consolidated law text and the referenced regulation texts for compliance. On face value, these are drafting distinctions requiring harmonisation with the final statute/regulations. * Eligibility carve-outs for specified persons: Both documents set out an extensive definition of "specified person" in Note 5. The Act (Document 1) and Bill (Document 2) are materially similar, but there are small syntactic differences (e.g., the Act explicitly lists "eligible InvIT" in some parts). * Practical impact: N....