Comparison of SCHEDULE-XV "DEDUCTION IN RESPECT OF LIFE INSURANCE PREMIA, CONTRIBUTION TO PROVIDENT FUND, SUBSCRIPTION TO CERTAIN EQUITY SHARES, ETC." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lify for deductions for purposes of section 123 (Income Tax Bill, 2025 - Old Version). It matters to individual taxpayers, Hindu Undivided Families (HUFs), employees, employers, mutual funds, public companies and specified financing institutions. Document does not state an effective date beyond its placement in the Bill. Background & Scope Statutory hook: Schedule XV (see section 123) to the Income Tax Bill, 2025 - Old Version. The Schedule enumerates categories of payments which "qualify as deduction" for purposes of section 123 of the Bill. It covers life insurance premia, deferred annuity payments, contributions to provident, pension and superannuation funds, specified government-notified schemes, long-term deposits, certain subscripti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....its with banks and post offices, Senior Citizen Savings Scheme deposits, NABARD bonds, and long-term housing finance schemes (clauses 1(s)-(v)). * Tuition fees for full-time education of any two children (clause 1(q)). * Expenditure for purchase or construction of a residential house property chargeable to tax under "Income from house property" (clause 1(r)), subject to paragraph 3 restrictions. * Subscription to equity shares/debentures forming part of eligible capital issues approved by the Board and units of specified mutual funds (clause 1(z)). Interpretation Paragraph 2 prescribes quantitative ceilings on insurance premia deductible: (a) up to 20% of actual capital sum assured for policies issued on or before 31-03-2012; (b) up....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....mple 2: An assessee subscribes to an eligible issue of capital approved by the Board under clause (z). If the assessee sells the shares within three years of acquisition, the deduction will be withdrawn and the aggregate of deductions allowed earlier will be deemed income in the year of sale (paragraphs 4 and table item 4). * Example 3: An assessee withdraws a Senior Citizen Savings Scheme deposit before five years; the withdrawn amount (excluding previously taxed interest and certain amounts received on death) is deemed income in the year of withdrawal (paragraph 5, table item 1). Interplay The Schedule explicitly cross-references multiple statutes and contingent notifications by the Central Government. It depends on notifications for ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the set of eligible instruments. * "Eligible issue of capital" cross-reference: Document 1 ties the term to section 80-IA(4) of the Income-tax Act, 1961. Document 2 ties the term to section 135(9) (numeration as in the Bill text). * Practical impact: Different sectional references may point to materially different criteria for what constitutes an eligible issue (for example, the type of business or use of proceeds). Unless the two cross-references are substantively identical (which cannot be assumed), taxpayers subscribing to equity/debenture issues will need to verify which business activities qualify under the Bill's reference. This affects eligibility for the deduction under clause (z). * Wording and sequencing differences in s....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....security." * Practical impact: As above, these cross-reference changes can affect the scope of defined terms and therefore the reach of deductions. They may create compliance uncertainty until clarified by legislative history, explanatory memorandum, rules or notifications. Practical Implications * Compliance: Taxpayers must track holding periods and conditions set out in paragraph 4 to avoid clawback of deductions (e.g., insurance surrender, early sale of eligible shares, premature withdrawal of term deposits). * Documentation: Record of policy issue date, capital sum assured, disability certification (where higher threshold applies), loan/repayment documentation for housing finance, notifications referenced in Schedule, and Board a....