Deduction for charitable donations: consolidated framework updates eligible recipients, compliance, digital reporting and anti-duplication rules.
Clause 133 creates a consolidated deduction regime for monetary donations to specified funds and institutions, distinguishing deduction tiers, imposing an aggregate income-related cap on certain donations, prohibiting duplicate claims for the same donation, and requiring non-cash payment for larger contributions. Deduction entitlement is conditional on donee institutions furnishing prescribed information and accepting risk-based verification; definitions exclude purposes wholly or substantially of a religious nature and delegate procedural detail to subordinate legislation.

Rent deduction for non-HRA assessees clarifies eligibility, computation limits, ownership exclusions and rule made procedural conditions.
Clause 134 grants a deduction for rent paid by individuals for residential accommodation occupied as their own residence, allowable only for rent exceeding 10% of total income and capped at the lower of a prescribed monthly ceiling or 25% of total income, with percentages computed on total income before this deduction. The clause excludes assessees who own residential accommodation at the relevant place or who fall within a specified schedule entry, and authorises rule making for additional conditions and procedural requirements to enable verification and prevent double benefit.

Medical expense deduction for specified diseases allows capped relief with specialist prescriptions and insurer offset.
Clause 128 permits residents, including individuals and HUFs, to deduct out-of-pocket medical treatment expenses for specified diseases subject to prescribed monetary caps, requires prescriptions from specified medical specialists, reduces deductions by amounts reimbursed by insurers or employers, provides an increased cap for senior citizens, and defines key terms such as dependant and insurer; the clause aligns with Section 80DDB and Rule 11DD while simplifying certain documentation requirements and deferring disease enumeration to rules or notifications.

Deduction for disabled dependents: proposed clause mirrors existing relief while altering exclusions and insurance conditions and documentation requirements.
Clause 127 permits resident individuals and HUFs to deduct expenses for maintenance, medical treatment, training or rehabilitation of a dependant with a disability and contributions to qualifying insurance schemes; it prescribes standard and higher deduction limits for severe disability, conditions for scheme-based deductions (annuity or lump sum on death or at a specified age), taxability if the dependant predeceases the taxpayer, a mandatory medical certificate (with renewal where required), and an exclusion for dependants claiming relief under a separate provision.

Health insurance deduction expanded to cover premiums, medical expenditure, preventive checks, and senior citizen relief.
Clause 126 provides deductions for health insurance premia and medical expenditure for individuals and HUFs, establishes separate caps for assessees and parents, specifies an aggregate ceiling for combined insurance and medical claims, allows a sub cap for preventive health check ups, prescribes payment modes with non cash norms for most deductions, recognises enhanced relief and lump sum treatment for senior citizens, and sets definitions and insurer eligibility criteria to guide application.

Deduction for Agniveer contributions enables tax relief for enrolled personnel, encouraging savings, recruitment and retention.
A statutory deduction allows full deduction of contributions to the Agniveer Corpus Fund by individuals enrolled in the Agnipath Scheme and of corresponding Central Government contributions, with eligibility defined by enrolment and effective date; taxpayers must substantiate contributions and authorities must adapt administration and reporting to process both individual and government contributions.

Pension contribution deduction: new Clause enhances employer and individual relief while clarifying withdrawal and annuity rules.
Clause 124 establishes statutory deductions for employer and individual contributions to Central Government-notified pension schemes, prescribing differentiated employer contribution caps, an aggregate individual contribution cap applicable to both adult and minor accounts, anti-double-deduction rules, taxable treatment of withdrawals with nominee/guardian exceptions on death, annuity purchase deferral of receipt, and a defined conception of salary for limit calculations.

Deduction for specified savings: new clause aligns tax incentives with existing framework while preserving compliance conditions.
Clause 123 grants deductions to individuals and HUFs for payments in a tax year towards life insurance premia, deferred annuities, provident fund contributions and other specified investments listed in Schedule XV, subject to a maximum deduction of INR 1,50,000 and to conditions set out in Schedule XV; it aligns with Section 80C's policy of incentivising long term savings while differing in the specific catalogue of eligible investments and the detailed conditions governing deductibility.

Deductions from Gross Total Income now constrained by non-duplication and market-value rules, tightening tax compliance obligations.
Clause 122 governs deductions from gross total income by capping aggregate deductions at gross total income, prohibiting duplication of deductions between entity and member levels, restricting multiple claims under different provisions, conditioning deductions on timely filing and claiming in the return, and requiring inter-business transfers to be recorded at market value; it also defines gross total income for deduction purposes.

Filing requirement for loss carryforward: procedural return submission determines eligibility to set off future taxable income.
Only losses determined pursuant to a return filed under the prescribed statutory procedure qualify for carry forward and set off; Clause 121 conditions eligibility on a return filed under Section 263(1) while Section 80 conditions it on a return filed under Section 139(3), each referencing the statutory provisions that define eligible loss categories and thereby tying substantive loss recognition to procedural compliance.

Disallowing set off of losses against undisclosed income prevents offset after tax searches, requisitions, or surveys.
Clause 120 of the Income Tax Bill, 2025 disallows any loss, whether carried forward or otherwise, and any unabsorbed depreciation from being set off against undisclosed income included in total income where such income is detected as a consequence of a search, requisition, or survey; the clause is expressly overriding and depends on the Bill's definition of undisclosed income for its scope.

Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.
Clause 111 and Section 74 permit carry forward and set off of unabsorbed capital losses, distinguishing long-term losses (set off only against long-term capital gains) from short-term losses (set off against any capital gains), and both limit carry forward to an eight-year period measured from the year the loss was computed; Clause 111 uses the term "tax year" and cross-references related provisions in the new Bill while Section 74 refers to "assessment year."

Carry-forward restrictions on losses after ownership or constitution changes limit tax benefits from strategic restructuring.
Clause 119 restricts carry forward and set off of losses after changes in firm constitution, business succession by non-inheritance successors, and corporate shareholding changes unless continuity of beneficial voting power is maintained. It permits an exception for start-ups where all original shareholders retain their shares and losses occurred within the first ten years, and enumerates exceptions (death, gifts to relatives, specified amalgamations/demergers, approved insolvency resolution plans) while defining terms relevant for application.

Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply.
Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off for losses attributable to retired or deceased partners upon firm reconstitution, disallows successors (other than by inheritance) from using predecessor losses, and restricts non-public companies from setting off prior losses after shareholding changes unless continuity conditions including original beneficial owner control or start-up safeguards are met; specified exceptions and ongoing compliance requirements are provided.

Ring fenced treatment of racehorse losses restricts cross setoff and permits carry forward only within the same activity.
Clause 115 creates a ring fenced regime: losses from the specified activity of owning and maintaining race horses cannot be set off against other income; unabsorbed losses may be carried forward and set off only against income from the same activity, subject to continuation of the activity and defined temporal limits and eligibility definitions.

Restriction on loss set-off: specified business losses may be offset only against profits of other specified businesses.
Losses from a specified business are restricted to set-off only against profits of other specified businesses in the same year; unabsorbed losses may be carried forward and set off exclusively against profits of specified businesses in subsequent years. The provision relies on defined terms for "specified business" and "unabsorbed loss," confines tax incentives to their intended category to prevent cross-business erosion of the tax base, and requires segregated record-keeping to ensure compliance.

Set-off of speculation losses confined to speculation profits; carry forward limited and prioritised before other allowances.
Clause 113 confines adjustment of losses from a speculation business to profits of another speculation business in the same year; permits carry forward of unabsorbed speculation losses to subsequent years for set off only against speculation business profits within a limited statutory period; requires that unabsorbed speculation losses be set off before certain carried forward allowances; and defines both speculation business (including a deeming rule for share trading to that extent) and specified exceptions to that classification.

Carry forward and set off of losses preserved for successor co operative banks, subject to specified conditions and penalties.
Successor co operative banks may set off predecessor accumulated business losses and unabsorbed depreciation in amalgamations as if the amalgamation had not occurred; in demergers directly related tax attributes transfer wholly to the resulting bank while non relatable attributes are apportioned by asset distribution. Application requires continuity of banking business, retention and use of fixed assets, and genuine continuation of operations; failure to meet conditions renders previously allowed set offs taxable in the year of non compliance. Clause 118 adds a Central Government power to prescribe further conditions to ensure genuine business purposes.

Treatment of accumulated losses and unabsorbed depreciation: successor may utilise predecessor tax attributes subject to a limited carry forward period.
Clause 117 deems accumulated loss and unabsorbed depreciation of specified predecessor entities to be those of the amalgamated entity when amalgamations involve banking companies, corresponding new banks, or government companies under Central Government sanctioned schemes, including cases following strategic disinvestment; successor entities may utilize these tax attributes in the year of amalgamation but are subject to a limited carry forward period and prescribed compliance and reporting requirements.

Treatment of accumulated losses and unabsorbed depreciation allows continuity on corporate reorganisations subject to compliance conditions.
Clause 116 permits continuity of accumulated loss and unabsorbed depreciation on amalgamation, demerger and related reorganisations by deeming the transferor's tax attributes to be those of the transferee or successor, subject to conditions such as asset retention and business continuity. It limits transfers in strategic disinvestment to amounts existing when public sector status ceased, allocates losses in demergers according to transferred undertakings or retained assets, extends treatment to successor entities including LLPs, and empowers the Central Government to prescribe conditions; non compliance attracts tax liabilities for successor entities.