TaxTMI 
TaxTMI 
Notes on Clauses
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....ssee, has entered into an international transaction or specified domestic transaction in any previous year, the Assessing Officer may refer to the Transfer Pricing Officer for the computation of the arm's length price under section 92C in relation to the said international transaction or specified domestic transaction. Sub-section (3A) of the said Act provides that the Transfer Pricing Officer is required to pass an order before sixty days prior to the date on which period of limitation specified in section 153, or as the case may be, in section 153B for making the order of assessment or reassessment or recomputation or fresh assessment, as the case may be, expires. In this regard, it is proposed to insert sub-section (3AA) so as to provide that for the purpose of making order under sub-section (3), the calculation of sixty days shall be made and shall be deemed to have been made in the following manner, namely:-- (a) where the period of limitation expires on 31st of March of any year (not being a leap year), the order under sub-section (3) may be made up to the 30th of January of that year; (b) where the period of limitation expires on 31st of March of ....
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....er sub-sections (1) and (4) of the said section to file a revised return, if any omission or wrong statement is discovered in the original or belated return. Such revised return must be furnished at any time before three months prior to the end of relevant assessment year or before completion of assessment, whichever is earlier. It is further proposed to substitute said sub-section to provide that if any person, having furnished a return under sub-section (1) or sub-section (4), discovers any omission or any wrong statement therein, he may, subject to the provisions of section 234-I, furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Sub-section (8A) of the said section provides for updated return of Income. It allows a taxpayer, whether or not a return was furnished earlier, to file an updated return within forty-eight months from the end of the financial year succeeding the relevant tax year. This provision is meant to promote voluntary compliance on the part of taxpayer to offer the income for taxation. It is proposed to provide for filing updated return for reducing the l....
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....inal assessment order - notwithstanding anything contained in sections 153 or 153B of the said Act, within one month from the end of the month in which the directions of the Dispute Resolution Panel are received, as mandated under sub-section (13). In cases where the assessee accepts the draft assessment order and does not file objections before the Dispute Resolution Panel, the Assessing Officer is required, notwithstanding anything contained in sections 153 or 153B of the said Act, as the case may be, to pass the final assessment order within one month from the end of the month in which the period specified for filing objections expires, in terms of sub-section (4) of section 144C of the said Act. It is proposed to amend section 144C of the said Act so as to clarify the time-limits available to the Assessing Officer to pass the final assessment order upon receipt of direction issued by Dispute Resolution Panel. Therefore it is hereby clarified for the purposes of sub-section (4) that where a draft of the proposed order of assessment under sub-section (1) is forwarded within the time period allowed under section 153/153B, further time period available to the Assessing Office....
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....ed authority, provide the assessee with a show cause notice along with information suggesting escapement of income, and grant an opportunity of being heard. After considering the assessee's reply, the Assessing Officer is required to pass a reasoned order under sub-section (3) of section 148A, as the case may be, determining whether it is a fit case for issuance of notice under section 148. The said order under sub-section (3) of section 148A is issued with the prior approval of the specified authority. It is proposed to insert section 147A after the said section 147 of the Income-tax Act, 1961 so as to remove doubts and to clarify that the Assessing Officer for the purposes of sections 148 and 148A shall mean and shall always be deemed to have meant to be an Assessing Officer other than the National Faceless Assessment Centre or any assessment unit referred to in sub-section (3) of section 144B. This amendment will take effect retrospectively from 1st April, 2021. Clause 9 of the Bill seeks to amend section 153 of the Income-tax Act, 1961 relating to the time limit for completion of assessment, reassessment and re-computation. Section 153 of the said Act provides for t....
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....r section 270A shall be imposed in the assessment order. It is proposed to make consequential amendment in sub-section (2) of section 220 for charging of interest under the said sub-section in respect of any demand raised on account of penalty levied under section 270A only after passing of the order by the Commissioner of Income-tax (Appeals) or the Income-tax Appellate Tribunal (for appeal against the order passed in pursuance of directions issued by the Dispute Resolution Panel order), as the case may be. This amendment will take effect retrospectively from the 1st March, 2026. Clause 12 of the Bill seeks to insert section 234-I after section 234H of the Income-tax Act, 1961, relating to fee for default in furnishing revised return of income. It is proposed to levy of fee amounting to five thousand rupees for revising the return after nine months from the end of relevant previous year where the total income is more than five lakh rupees, and a fee of one thousand rupees for revising the return after nine months from the end of relevant previous year where the total income is less than five lakh rupees. This amendment will take effect retrospectively from 1st March....
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....able. This amendment will take effect retrospectively from 1st day of March, 2026. Clause 16 of the Bill seeks to amend section 274 of the Income-tax Act, 1961 relating to procedure. The said section prescribes the procedure for imposing penalties and mandates that no penalty shall be levied unless the assessee is given a reasonable opportunity of being heard. It requires the Assessing Officer to issue a show-cause notice for which the penalty is proposed, and in certain cases, prior approval of higher authorities is necessary before imposing the penalty. The section ensures adherence to the principles of natural justice and aims to prevent arbitrary or invalid penalty proceedings. It is proposed to amend the said section so as to provide that penalty for under-reporting of income leviable under section 270A shall be imposed in the assessment order made on or after the 1st April, 2027 for assessment year 2026-2027 or any earlier assessment year. This amendment will take effect retrospectively from 1st March, 2026. Clause 17 of the Bill seeks to amend section 275A of the Income-tax Act, 1961 (hereinafter referred as the 'Act') relating to contravention of order mad....
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....years and with fine". This amendment will take effect retrospectively from 1st March, 2026. Clause 20 of the Bill seeks to substitute sections 276B, 276BB, 276C, 276CC, 276CCC and 276D of the Income-tax Act, 1961 relating to failure to pay tax to the credit of Central Government under Chapter XII-D or XVII-B, failure to pay the tax collected at source, wilful attempt to evade tax, etc., failure to furnish returns of income, failure to furnish return of income in search cases and failure to produce accounts and documents, respectively with new sections. The offences under section 276B are proposed to be fully decriminalized, as below: (i) with simple imprisonment for a term which may extend to two years, or with fine, or with both, in a case where amount of such tax exceeds fifty lakh rupees; (ii) with simple imprisonment for a term which may extend to six months, or with fine, or with both, in a case where amount of such tax exceeds ten lakh rupees but does not exceed fifty lakh rupees; (iii) with fine, in any other case. Section 276BB provides that if a person fails to pay to the credit of the Central Government, the tax collected by him as r....
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....es not exceed fifty lakh rupees; (c) with fine, in any other case. Further, punishment of offences under section 276C(2) is proposed to be changed as below: (a) with simple imprisonment for a term which may extend to two years, or with fine, or with both, in a case where the amount sought to be evaded exceeds fifty lakh rupees; (b) with simple imprisonment for a term which may extend to six months, or with fine, or with both, in a case where the amount sought to be evaded exceeds ten lakh rupees but does not exceed fifty lakh rupees; (c) with fine, in any other case. Section 276CC provides that if a person wilfully fails to furnish in due time the return of fringe benefits which he is required to furnish under sub-section (1) of section 115WD or by notice given under sub-section (2) of the said section or section 115WH or the return of income which he is required to furnish under sub-section (1) of section 139 or by notice given under clause (i) of sub-section (1) of section 142 or section 148 or section 153A, he shall be punishable,- (i) in a case where the amount of tax, which would have been evaded if the failure had not been di....
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....he case where a person wilfully fails to produce, or cause to be produced, on or before the date specified in any notice served on him under sub-section (1) of section 142, such accounts and documents as are referred to in the notice. This offence is proposed to be decriminalised. (b) in the case where a person wilfully fails to comply with a direction issued to him under sub-section (2A) of section 142, he shall be punishable with rigorous imprisonment for a term which may extend to one year and with fine. This punishment is proposed to be changed to "simple imprisonment for a term which may extend to six months or with fine". These amendments will take effect retrospectively from 1st March, 2026. Clause 21 of the Bill seeks to amend section 277 of the Income-tax Act, 1961 relating to false statement in verification, etc. The said section provides that if a person makes a statement in any verification under this Act or under any rule made thereunder, or delivers an account or statement which is false, and which he either knows or believes to be false, or does not believe to be true, he shall be punishable,- (i) in a case where the amount of tax, which wo....
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....e-tax Act, 1961 relating to abetment of false return, etc. The said section, inter alia, provides that if a person abets or induces in any manner another person to make and deliver an account or a statement or declaration relating to any income or any fringe benefits chargeable to tax which is false and which he either knows to be false or does not believe to be true or to commit an offence under sub-section (1) of section 276C, he shall be punishable,- (i) in a case where the amount of tax, penalty or interest which would have been evaded, if the declaration, account or statement had been accepted as true, or which is wilfully attempted to be evaded, exceeds twenty-five hundred thousand rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years and with fine; (ii) in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and with fine. It is proposed to amend the said section so as to change the punishment as below: (i) with simple imprisonment for a term which may extend to two years, or with fine, or with both,....
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....ne month, or with fine, or with both". This amendment will take effect retrospectively from 1st March, 2026. Clause 26 of the Bill seeks to insert a new section 292BA of the Income-tax Act, 1961 relating to return of income, etc., not to be invalid on certain grounds. It is proposed to insert a new section 292BA so as to clarify that no assessment under any of the provisions of the said Act shall be invalid or shall be deemed to have been invalid on the ground of any mistake, defect or omission in respect of quoting of a computer generated Document Identification Number, if the assessment order is referenced by such number in any manner. This amendment will take effect retrospectively from 1st October, 2019. B.-- Income-tax under the Income-tax Act, 2025 Clause 27 of the Bill seeks to amend section 2 of the Income-tax Act, 2025 relating to definitions of the expressions. Clause (32) of the said section provides for the definition of the expression "co-operative society". However, co-operative societies registered under the Multi-State Cooperative Societies Act, 2002, are not explicitly recognised in the definition presently provided in the said clause. It....
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....ual value. Sub-section (5) of the said provides that where a property is held as stock-in-trade and is not let wholly or partly at any time during the tax year, the annual value of such property or part thereof shall be nil for two years from the end of the financial year in which the certificate for completion of construction is obtained from the competent authority. It is proposed to amend the said sub-section so as to change the annual value of property or part thereof to be treated as nil "for two years" instead of "up to two years". This amendment will take effect from 1st April, 2026. Clause 30 of the Bill seeks to amend section 22 of the Income-tax Act, 2025 relating to deductions from income from house property. The said section deals with deductions in the case of income from house property. Further, sub-section (2) of the said section provides that the aggregate amount of deduction in the case of self-occupied property shall not exceed Rs. 2 lakhs where property is acquired or constructed with borrowed capital. However, this ceiling of Rs. 2 lakhs has not included the deduction of prior-period interest payable for the acquisition or construction of property....
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....s own shares or other specified securities. It is proposed to substitute sub-section (2) so as to provide that in respect of capital gains referred to in sub-section (1), where the shareholder or holder of other specified securities is a promoter, the aggregate income-tax payable on such capital gains shall be,-- (a) the income-tax payable on such capital gains in accordance with the provisions of the Act; and (b) an additional income tax in respect of capital gains specified in column B of the Table below, computed at the rate specified in column C or column D of the said Table; TABLE Sl. No Income Rate, where the promoter is a domestic company Rate, where the promoter is other than a domestic company A B C D 1. Short-term capital gains referred to in section 196 arising from the transfer of such securities. 2% 10% 2. Long-term capital gains referred to in section 197 or section 198 arising from the transfer of such securities. 9.5% 17.5% It is further proposed to substitute sub-section (3) so as to provide definitions to certain expressions. These amendments will take effect from the 1st April, 2026 and....
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....a) and (b) of sub-section (1) of the said section. It is further proposed to substitute sub-sections (5) so as to provide that the units referred to in sub-section (1) shall be entitled to benefit if such unit is not formed by splitting up, reconstruction, reorganisation or transfer a business. It is also proposed to insert sub-section (6) to the said section so as to explain the expression "relevant tax year", and to define the expressions "Unit" and "aircraft and ship". These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 39 of the Bill seeks to amend section 149 of the Income-tax Act, 2025 relating to deduction in respect of income of co-operative societies. Clause (b) of sub-section (2) of the said section, inter alia, provides for deduction of whole of the amount of profits and gains of business in the case of a co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits, or vegetables raised or grown by its members to certain entities. It is proposed to include cotton seeds and cattle feed also within the ambit of the said clause. ....
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.... reference of section 144. This amendment will take effect from 1st April, 2026. Clause 44 of the Bill seeks to amend section 166 of the Income-tax Act, 2025 relating to reference to Transfer Pricing Officer. The said section provides that where an assessee, has entered into an international transaction or specified domestic transaction in any previous year, and the Assessing Officer has made a reference for computation of the arm's length price in relation to the said international transaction or specified domestic transaction to the Transfer Pricing Officer. Sub-section (7) of the said section 166 provides that where a reference to Transfer pricing Officer was made under sub-section (1), an order under sub-section (6) has to be made at any time sixty days before the expiry of the period specified in section 286 or 296, for making the order of assessment or reassessment or recomputation or fresh assessment. It is proposed to amend the said sub-section to clarify that where a reference has been made under sub-section (1), an order under sub-section (6) has to be made at any time before one month prior to the month in which the period of limitation referred to in ....
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.... individual Hindu undivided family and others. It is proposed to omit sub-clause (iii) of clause (a) of sub-section (2) of the said section to omit the reference of section 144. This amendment will take effect from 1st April, 2026. Clause 48 of the Bill seeks to amend section 203 of the Income-tax Act, 2025 relating to tax on income of certain resident co-operative societies. The said section provides for the deduction not to be allowed on dividends received by co-operatives. It is proposed to amend sub-clause (i) of clause (a) of sub-section (1) of the said section so as to provide that the inter-co-operative societies dividend be allowed as a deduction under the new tax regime provided under the said section for co-operative societies, to the extent such dividend is distributed by the cooperative society to its members. It is further proposed that the income by way of dividend received by federal co-operative referred to in section 150 from any company in respect of investments made before the 31st January, 2026 be allowed as deduction in the new tax regime. This deduction is proposed to be limited to the amount of dividend distributed by the federal cooperative....
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....0 of the Bill seeks to amend section 206 of the Income-tax Act relating to special provision for minimum alternate tax and alternate minimum tax. The said section, inter alia, provides for minimum alternate tax applicable only for companies. This tax is charged on the book profit of the assessee and not the taxable income computed under the provisions of the Act. The rate of minimum alternate tax is 15% for corporates other than units located in an International Financial Services Centre. In case the minimum alternate tax is higher than the income-tax payable on the company's total income computed under normal tax provisions, the assessee pays minimum alternate tax and is allowed credit on the difference. If a company pays minimum alternate tax when it is higher than regular tax, the excess amount paid is allowed as a tax credit which can be carried forward up to fifteen years and can be set off in future years where the company's regular tax liability exceeds the minimum alternate tax liability. It is proposed that minimum alternate tax is to be made a final tax in the old regime and shall be liable to a tax rate of 14% instead of the existing 15%. Further, set-of....
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.... It is proposed to amend clause (a) of sub-section (4) of the said section so as to substitute the word "certificate" with the words "valid certificate". Sub-clause (iii) of clause (b) of sub-section (9) of the said section provides that in case of inland vessel registered in India, a valid certificate shall mean a certificate issued under the Inland Vessels Act, 2021. It is proposed to amend the said sub- clause so as to substitute the word "certificate" with the words "certificate of registration". These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation the tax year 2026-2027 and subsequent years. Clause 53 seeks to amend section 228 of the Income-tax Act, 2025 relating to relevant shipping income and exclusion from book profit. Item (A) of sub-clause (ii) of clause (b) of sub-section (3) of the said section provides that on-board or on-shore activities of passenger ships would be included in the core activities of a tonnage company. It is proposed to amend the said item so as to bring inland vessels also under its ambit. This amendment will take effect from 1st April, 2026 and will, accordingly, apply in relation to ....
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....by every person; It is proposed to amend clause (c) of sub-section (10) of the said section so as to enable the Central Board of Direct Taxes to make rules for quoting of Permanent Account Number in documents in such transactions which do not relate to business or profession. This amendment will take effect from 1st April, 2026. Clause 57 of the Bill seeks to amend section 263 of the Income-tax Act, 2025 relating to return of income. Clause (c) of sub-section (1) of said section defines the expression "due date" as the date of the financial year succeeding the relevant tax year for filing the return of income by different classes of assessee or person with different conditions applied therein. It is proposed to substitute said clause (c) for the purposes of this section "due date" in respect of the persons mentioned column B of the Table below, subject to the conditions mentioned in column C of the said Table, shall be the due date of the financial year succeeding the relevant tax year as mentioned in column D thereof: TABLE Sl. No. Person Conditions Due date A B C D 1. Assessee, including the partners of the firm or the spouse of suc....
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....ng of updated return in such cases where any proceedings for assessment or reassessment or re-computation or revision of income is pending or has been completed for the said tax year. It is proposed to amend the said sub-section so that an updated return may be furnished by a person for the relevant tax year in pursuance of a notice issued under section 280 within such period as specified in the said notice and in such a case, the assessee shall be precluded from filing of return in pursuance of the said notice in any other manner. It is also proposed to provide the filing of updated return for reducing the loss in specified circumstances. It is also proposed to amend clause (e) of sub-section (6) of the said section so as to give the reference of "206(3) and (4)" instead of "206(l)(m) to (p)". These amendments will take effect from 1st April, 2026. Clause 58 of the Bill seeks to amend section 266 of the Income-tax Act, 2025 relating to self-assessment. It is proposed to make consequential amendments in order to bring the changes proposed in the minimum alternate tax regime by giving reference of section 206(3) and (4) instead of 206(1) (m) to (p). These amendm....
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.... (ii) issuance of directions by the Dispute Resolution Panel - within nine months from the end of the month in which the draft assessment order is forwarded to the eligible assessee; and (iii) passing of the final assessment order - irrespective of anything contained in section 286 of the said Act, within one month from the end of the month in which the directions of the Dispute Resolution Panel are received, as mandated under section 275(14) of the said Act. In cases where the assessee accepts the draft assessment order and does not file objections before the Dispute Resolution Panel, the Assessing Officer is required, notwithstanding anything contained in sections 286 of the said Act, as the case may be, to pass the final assessment order within one month from the end of the month in which the period specified for filing objections expires, in terms of section 275(4) of the said Act. It is proposed to amend sub-sections (4) and (14) of section 275 of the said Act so as to clarify that the period available to the Assessing Officer under the section shall be in addition to the period available to him under section 286 of the said Act. These amendments will ta....
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....6 of the said Act provides for the time limits for completion of assessment, reassessment, and re-computation proceedings and sets the outer time limit for concluding such proceedings. It is proposed to amend sub-section (2) of the said section so as to clarify that in terms of provisions of section 286(1) [Table: Sl No. 1 to 4] and sub-section (2), the draft of the proposed order of assessment referred to in section 275 shall be made at any time up to the time limit of assessment, reassessment or re-computation referred in the said table and the said sub-section. This amendment will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 64 of the Bill seeks to amend section 295 of the Income-tax Act, 2025 relating to undisclosed income of any other person. The said section provides for taxing undisclosed income where the Assessing officer is satisfied that any undisclosed income belongs to or pertains to or relates to any person in whose case search is not initiated or requisition is not made. It is proposed to amend sub-section (2) of the said section so as to limit the period of block assess....
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....t thereto. This amendment will take effect from 1st April, 2026. Clause 69 of the Bill seeks to amend section 352 of the Income-tax Act relating to tax on accreted income. It is proposed to substitute serial number 8 and entries relating thereto of the Table in sub-section (4) of the said section so as to provide that the specified person shall be liable to pay tax on accreted income, where it has merged with, any other __ (a) entity other than a registered non-profit organisation; or (b) registered non-profit organisation having objects same or similar to it but the said merger does not fulfil such conditions, as may be prescribed; or (c) registered non-profit organisation that does not have same or similar objects. This amendment will take effect from 1st April, 2026. Clause 70 of the Bill seeks to insert a new section 354A in the Income-tax Act, 2025 relating to merger of registered non-profit organisations in certain cases. It is proposed to insert a new section 354A so as to provide that where any registered non-profit organisation has merged with any other registered non-profit organisation, the provisions of section 352 shall not ....
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....the earlier threshold of Rs.50000 in the said clause shall continue. These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. It is also proposed to insert a new sub-section (6A) in the said section so as to allow depository to accept declaration from the assessee as per the provisions of section 393(6) of the said Act and provide it to the person responsible for paying income of the nature referred to in 393(1) [Table: Sl. Nos. 4(i), 5(i) and 7] within a fixed timeline. However, this additional option shall be available only to those investors who have held the securities in the depository as defined in section 2(e) of the Depositories Act, 1996 and where the securities are listed in a registered stock exchange in India. It is also proposed to make consequential amendments in sub-section (7) of the said section. These amendments will take effect from 1st April, 2027 and will, accordingly, apply in relation to the tax year 2027-2028 and subsequent years. Clause 73 of the Bill seeks to amend section 394 of the Income-tax Act, 2025 relating to collection of tax at source. Sub-sect....
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....res that every person, deducting or collecting tax shall apply to the Assessing Officer for the allotment of a "tax deduction and collection account number". Clause (c) of sub-section (1) of the said section provides that the provisions of clause (c) shall not apply in certain cases specified therein. It is proposed to substitute clause (c) of the said sub-section so as to provide that the provisions of clause (a) shall not apply to-- (i) a person in respect of transaction where he is required to deduct tax under section 393(1) [Table: Sl. Nos. 2(i), 3(i) or 6(ii)]; or (ii) a person referred to in section 393(4) [Table : Sl. No. 12.C(a)] in respect of transaction where he is required to deduct tax on consideration for transfer of a virtual digital asset under section 393(1) [Table : Sl. No. 8(vi)]; or (iii) a resident individual or Hindu undivided family in respect of transaction where he is required to deduct tax on any consideration for the transfer of any immovable property under the provisions of section 393(2) [Table : Sl. No. 11]; or (iv) a person notified in this regard by the Central Government. This amendment will take effect fr....
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....d when assesse deemed in default. The said section provides that the payment and recovery of tax demand, stating that any amount specified in a notice of demand under section 289 must be paid within thirty days of service of the notice. If the assessee fails to pay within this period, they are deemed to be in default and become liable to interest under sub-section (3) of section 289, along with possible recovery proceedings such as attachment of property. The Assessing Officer may, however, allow payment by instalments or extend the time for payment, subject to conditions, to provide relief in genuine cases. It is proposed to consequentially amend the sub-section (3) of the said section so as to provide for charging of interest under the said sub-section in respect of any demand raised on account of penalty levied under section 439 only after passing of the order by the Commissioner of Income tax Appellate Tribunal (for appeal against order passed in pursuance of directions issued by the Dispute Resolution Panel), as the case may be. This amendment will take effect from 1st April, 2026. Clause 80 of the Bill seeks to amend section 423 of the Income-tax Act 2025 relating....
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.... if any person who is required to furnish a statement of financial transaction or reportable account under section 508(1), fails to furnish such statement within the time as may be provide by rules under section 508(2), he shall be liable to pay by way of fee, a sum of Rs. 200 for every day for which such failure continues and such fee shall not exceed a sum of Rs. 100000. The proposed section 428 provides for fee for default in furnishing return of income, audited accounts and reports. Clause (a) of the proposed section 428 provides that where any person required to furnish a return of income under section 263, fails to do so within the due date as specified in sub-section (1) of said section, he shall be liable to pay by way of fee, a sum of Rs. 1000, if the total income of such person does not exceed Rs. 500000 and a sum of Rs. 5000, in any other case. Clause (b) of the proposed section 428 provides that where any person furnishes a return of income under section 263(5) beyond nine months from the end of relevant tax year, he shall liable to pay by way of fee, a sum of Rs. 1000, if the total income of such person does not exceed Rs. 500000 and a sum of Rs. 5000, in any ....
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....interest payable as per the order of assessment or reassessment under section 270(10) or section 279, along with additional income-tax amounting to 100% of the amount of tax payable on under-reported income, in lieu of penalty and no appeal has been filed; (ii) for income referred to in sections 102 to 106 [under section 439 (11) (g)], on payment of the tax and interest payable as per the order of assessment or reassessment under section 270(10) or section 279, along with additional income-tax amounting to 120% of the amount of tax payable on under-reported income, in lieu of penalty and no appeal has been filed. These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 86 of the Bill seeks to omit section 443 of the Income-tax Act, 2025 relating to penalty in respect of certain income. It is proposed to omit the said as a consequential amendment made in section 439 of the said Act. This amendment will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 87 of the Bill seeks to substitute sec....
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.... 2026 and accordingly, will apply in relation to the tax year 2026-2027 and subsequent year. Clause 90 of the Bill seeks to amend section 466 of the Income-tax Act, 2025 relating to penalty for failure to comply with the provisions of section 254. Section 254 of the said Act provides the power to the income-tax authorities to collect information from the premises where business or profession is carried out, by directing the proprietor or employee or any other person, who may, at that time and place, be attending in any manner to, or helping in, or carrying on of such business or profession, to furnish certain information as authorised. Further, the provisions of section 466 of the said Act provide for penalty on such persons who fail to comply with the provisions of section 254, that is power to collect information, and does not furnish the requisite information to the authorised income-tax authorities. The said section further empowers to the Joint Commissioner, Deputy Director or Assistant Director or the Assessing officer to impose maximum penalty amounting to Rs.1000. It is proposed to amend the said section so as to enhance the maximum amount of penalty from existi....
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....d shall also be liable to fine. It is proposed to amend said section so as to substitute the "rigorous imprisonment for a term which may extend to two years and shall also be liable to fine" with "simple imprisonment up to six months or with fine or with both". This amendment will take effect from 1st April, 2026. Clause 95 of the Bill seeks to amend section 475 of the Income-tax Act, 2025 relating to removal, concealment, transfer or delivery of property to prevent tax recovery. The said section, inter alia, provides that whoever, fraudulently removes, conceals, transfers or delivers to any person, any property or any interest therein, with the intent to prevent such property or interest therein from being taken in execution of a certificate drawn under section 413, shall be punishable with rigorous imprisonment for a term which may extend to two years and shall also be liable to fine. It is proposed to amend said section so as to substitute "rigorous imprisonment for a term which may extend to two years and shall also be liable to fine" with "simple imprisonment up to two years and fine". This amendment will take effect from 1st April, 2026. Clause 96 of the ....
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.... 2026. Clause 98 of the Bill seeks to substitute section 478 of the Income-tax Act, 2025 relating to wilful attempt to evade tax, etc. Sub-section (1) of the said section, inter alia, provides that if a person wilfully attempts in any manner whatsoever to evade any tax, penalty or interest chargeable or imposable, or under-reports his income, under this Act in a case, where the amount sought to be evaded or tax on under-reported income exceeds twenty-five lakh rupees, with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years, and with fine and in any other case, with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years, and with fine. Sub-section (2) of the said section, inter alia, provides that if a person wilfully attempts in any manner to evade the payment of any tax, penalty or interest under this Act, he shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and shall, in the discretion of the court, also be liable to fine. It is proposed to amend the said sub-section (1) of t....
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....would have been evaded if the failure had not been discovered, exceeds fifty lakh rupees; (b) with simple imprisonment for a term up to six months, or with fine, or with both, in a case where the amount of tax, which would have been evaded if the failure had not been discovered, exceeds ten lakh rupees but does not exceed fifty lakh rupees; (c) with fine, in any other case. This amendment will take effect from 1st April, 2026. Clause 100 of the Bill seeks to substitute sections 480 and 481 of the Income-tax Act, 2025 relating to failure to furnish return of income in search cases and failure to produce accounts and documents, respectively, with new sections. It is proposed to substitute the said section 480 so as to decriminalize the offenses thereunder to provide that if a person wilfully fails to furnish in due time the return of income, setting forth his undisclosed income for the block period, which is required to be furnished by notice given under section 294(1) (a), he shall be punishable-- (a) with simple imprisonment for a term up to two years, or with fine, or with both, in a case where the amount of tax exceeds fifty lakh rupees; ....
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.... had been accepted as true, exceeds ten lakh rupees but does not exceed fifty lakh rupees; (c) with fine, in any other case. This amendment will take effect from 1st April, 2026. Clause 102 of the Bill seeks to amend section 483 of the Income-tax Act, 2025 relating to falsification of books of account or document, etc. Sub-section (1) of the said section, inter alia, provides that if any person (herein referred to as the first person) wilfully and with intent to enable any other person (herein referred to as the second person) to evade any tax or interest or penalty chargeable and imposable under this Act, makes or causes to be made any entry or statement which is false and which the first person either knows to be false or does not believe to be true, in any books of account or other document relevant to or useful in any proceedings against the first person or the second person, under this Act, the first person shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and with fine. It is proposed to amend the said sub-section to substitute "rigorous imprisonment for a term which shall....
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....tions 476, 477, 478(1), 479, 480, 482 or 484 is again convicted of an offence under any of the said sections, he shall be punishable for the second and for every subsequent offence with rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years, and with fine. It is proposed to amend said section to substitute "rigorous imprisonment for a term which shall not be less than six months but which may extend to seven years, and with fine" with "simple imprisonment for a term which shall not be less than six months but which may extend to three years and shall also be liable to fine". This amendment will take effect from 1st April, 2026. Clause 105 of the Bill seeks to amend section 494 of the Income-tax Act, 2025 relating to disclosure of particulars by public servants. Sub-section (1) of the said section provides that a public servant, who furnishes any information or produces any document in contravention of the provisions of section 258(3), shall be punishable with imprisonment which may extend to six months, and shall also be liable to fine. It is proposed to amend the said section to substitute "imprisonment which may....
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....ubsequent tax year; and (ii) included in the total income of the said person under the same head of income as it would have been included under the repealed Income-tax Act. It is further proposed to substitute sub-clauses (i) and (ii) of clause (l) of sub-section (2) of the said section so as to include reference of section 206(3) or (4). These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 108 of the Bill seeks to amend Schedule III to the Income-tax Act, 2025 relating to income not to be included in total income of eligible persons. It is proposed to amend the Table in the said Schedule so as to provide an express statutory exemption in respect of disability pension, including both the service element and the disability element, in cases where an individual has been invalided out of service on account of such disability attributable to, or aggravated by, such service. However, the said exemption shall not be available where the individual has retired from service on superannuation or otherwise. It is further proposed to amend the Table in the said Schedule so ....
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...., on any income accruing or arising in India or deemed to accrue or arise in India by way of procuring data centre services from a specified data centre, for a period up to tax year ending on 31st March, 2047, subject to the conditions specified therein. It is also proposed to insert Note 3 so as to define the expressions "data centre", "data centre services" and "specified data centre" for the purposes of the said provision in serial number 13C. These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 110 of the Bill seeks to amend Schedule VI of the Income-tax Act, 2025 relating to income not to be included in the total income of certain eligible persons in International Financial Services Centre or having income therefrom. Serial Numbers 1 to 4 of the Table in the said Schedule applies to any specified fund and the expression "specified fund" has been defined in clause (g) of Note 1 of the said Schedule. It is proposed to amend the said clause so as to align the definition of the expression "specified fund" with the definition provided under clause (4D) of section 10 of t....
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....exploring of critical minerals also eligible for deduction as per the provisions of section 51 of the said Act. This amendment will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clause 113 of the Bill seeks to amend Schedule XIV to the Income-tax Act, 2025 relating to insurance business. It is proposed to consequentially amend clause (a) of sub-paragraph (1) of the said Schedule so as to substitute the words "this rule" with the words "this paragraph". It is further proposed to amend the said Schedule so as to insert sub-paragraph (3) in paragraph 4 to provide that the amount not deductible under sub-clause (i) or (ii) of section 35(b), which is added under sub-paragraph (1)(a), shall be allowed subsequently as a deduction in a tax year as per the provisions of the said sub-clause, as the case may be. These amendments will take effect from 1st April, 2026 and will, accordingly, apply in relation to the tax year 2026-2027 and subsequent years. Clauses 114 to 128 of the Bill seeks to insert a new Chapter relating to the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026. The Chapte....
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....heme. This Chapter will take effect from such date as the Central Government may notify in the Official Gazette. Indirect taxes Clause 129 of the Bill seeks to amend sub-section (2) of section 1 of the Customs Act, so as to extend the jurisdiction of the said Act beyond the territorial waters of India for the purpose of fishing and fishing related activities. Clause 130 of the Bill seeks to insert a new clause in section 2 of the Customs Act, so as to define the expression "Indian-flagged fishing vessel". Clause 131 of the Bill seeks to amend sub-section (6) of section 28 of the Customs Act to provide that the penalty paid under sub-section (5) of section 28, on determination under the said sub-section, shall be deemed to be a charge for non-payment of duty under clause (i) thereof. Clause 132 seeks to amend sub-section (2) of section 28J of the Customs Act so as to provide that advance ruling under sub-section (1) of that section shall remain valid for a period of five years or till there is a change in law or facts on the basis of which the advance ruling has been pronounced, whichever is earlier. It further seeks to substitute the proviso to the said sub-sec....
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....e input tax credit is reversed by the recipient. Clause 138 of the Bill seeks to amend section 34 of the Central Goods and Services Tax Act so as to include the reference of discount referred under clause (b) of sub-section (3) of section 15 in the said section for issuing credit notes for post-supply discounts. Clause 139 of the Bill seeks to amend sub-section (6) of section 54 of the Central Goods and Services Tax Act to extend the provisions of provisional refund to refunds arising out of inverted duty structure. The clause further seeks to amend sub-section (14) of section 54 of the Central Goods and Services Tax Act to provide for removing the threshold limit for refund claim in case of goods exported out of India with payment of tax. Clause 140 of the Bill seeks to insert a new sub-section (1A) in section 101A of the Central Goods and Services Tax Act so as to provide that till the National Appellate Authority is constituted under sub-section (1), the Government may on the recommendation of the Council, by notification, empower any existing Authority to hear appeals made under section 101B. It further seeks to provide that in such case, the provisions of sub-se....