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    Supervisory Powers in Income Tax Assessments : Clause 272 of Income Tax Bill, 2025 Vs. Section 144A ...
    Procedural Safeguards and Administrative Discretion in Best Judgment Assessments : Clause 271 of the...
    Procedural Evolution in Tax Return Assessment : Clause 270 of the Income Tax Bill, 2025 Vs. Section ...
    Transforming Faceless Inquiry of Tax Administration : Clause 532 of the Income Tax Bill, 2025 Vs. Se...
    Reforming Asset Valuation in Tax Assessments : Clause 269 of Income Tax Bill, 2025 Vs. Section 142A ...
    Modernizing Inquiry and Special Audit Procedures in Indian Tax Law : Clause 268 of the Income Tax Bi...
    Legal Implications of Updated Return Taxation : Clause 267 of the Income Tax Bill, 2025 Vs. Section ...
    Evolution of Self-Assessment: Continuity and Change in Indian Tax Law : Clause 266 of the Income Tax...
    Modernizing the Verification of Tax Returns in India : Clause 265 of the Income Tax Bill, 2025 Vs. S...
    Procedural Innovations in Tax Compliance : Clause 263(2)(a) of Income Tax Bill, 2025 Vs. Section 139...
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    The Evolution of Tax Return Preparer Schemes : Clause 264 of the Income Tax Bill, 2025 Vs. Section 1...
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    Legal Architecture of PAN, Aadhaar, and High-Value Transaction : Clause 262 of the Income Tax Bill, ...
    A New Paradigm for Income Tax Return Filing in India : Clause 263 of the Income Tax Bill, 2025 Vs. S...
    Regulation of Taxpayer Information Disclosure under Indian Income Tax Laws : Clause 258 of the Incom...
    Continuity and Change in the Judicial Status of Tax Proceedings : Clause 257 of the Income Tax Bill,...
    Legal Implications of Faceless Schemes in Income Tax : Clause 260 of the Income Tax Bill, 2025 vs. S...
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    Act RulesBills
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    Supervisory power of Joint Commissioner permits binding directions in pending assessments, with a hearing before any prejudicial direction.
    Clause 272 empowers the Joint Commissioner to intervene in any pending assessment by suo motu action, AO reference, or assessee application, to call for records and issue directions that are binding on the Assessing Officer where deemed necessary or expedient; no direction prejudicial to the assessee may be issued without an opportunity of being heard, while directions prescribing lines of investigation are not treated as prejudicial.
    Act RulesBills
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    Best judgment assessment: requirement of notice and opportunity to be heard before AO determines taxpayer's liability under reformed assessment framework.
    Clause 271 creates a mechanism for best judgment assessment where the AO may assess income or loss when an assessee defaults on filing returns or complying with statutory notices; the AO must consider all relevant materials, issue a show cause notice affording an opportunity of being heard (subject to an exception where an earlier notice suffices), and determine the sum payable based on his best judgment, with certain interpretative ambiguities left for administrative or judicial clarification.
    Act RulesBills
    Show AI Summary
    Assessment procedure modernization strengthens mandatory intimation and centralized processing, enhancing taxpayer engagement and procedural certainty.
    Clause 270 modernises return assessment by allowing specified prima facie adjustments (arithmetical errors, incorrect claims apparent from the return, late loss set-off, audit discrepancies, late deductions) only after mandatory written or electronic intimation and consideration of the assessee's response; acknowledges deemed intimation where no adjustment arises; fixes an outer deadline for intimation; permits authorised officers to select cases for scrutiny within a prescribed period and requires written assessment orders after evidence is considered; and provides safeguards for exempt entities and non-profits while enabling centralised, technology-driven processing schemes.
    Act RulesBills
    Show AI Summary
    Faceless tax administration: broad power to frame schemes and modify statutory application for digitalised tax processes.
    Clause 532 authorises the Central Government to make schemes by notification for any purpose under the Income Tax Bill, 2025, aiming to enhance efficiency, transparency, and accountability by reducing taxpayer-official interface and optimising resource utilisation. For implementation, the Government may issue notifications that disapply or modify provisions of the Act, and may amend schemes previously framed under the 1961 Act; every such notification must be laid before each House of Parliament. The Board may be empowered to make schemes subject to control of the Central Government.
    Act RulesBills
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    Valuation references: statutory regime for Valuation Officer reports, with procedural safeguards and enforceable reporting timelines.
    Clause 269 empowers the Assessing Officer to refer estimation of value of any asset, property, or investment to a Valuation Officer, who must consider all evidence, provide an opportunity to be heard, inspect premises with prescribed notice, and submit a valuation report to the AO and assessee; the VO may make a best judgment assessment if the assessee fails to cooperate and may rectify mistakes apparent from the record, while the AO may use the report after affording the assessee a hearing.
    Act RulesBills
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    Inquiry before assessment: AO empowered to call for documents and order special audits, with senior approval and procedural safeguards.
    Clause 268 creates a structured regime for Inquiry before assessment granting the Assessing Officer power to call for returns, accounts, documents and statements of assets and liabilities, subject to prior senior approval for intrusive disclosures and temporal limits on record production. It authorises special audits and inventory valuations with nominated professionals, mandates standardised forms and verifications, provides time limits for reports with limited extensions, secures the assessee's right to be heard before use of inquiry material in assessment, and shifts audit/valuation expenses to the Central Government under prescribed guidelines.
    Act RulesBills
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    Updated return taxation requires prior payment of tax, interest, fees and graded additional tax before filing an updated return.
    Clause 267 requires prior payment of tax, interest, fee and a graded additional income-tax before filing an updated return, prescribes allowable credits and reliefs to determine net liability (including advance tax, TDS/TCS, foreign tax reliefs and specified tax credits), treats refunds and earlier credits to prevent double benefit, mandates proof of payment with the updated return, clarifies interest computation on assessed tax under the new code, and empowers the administration to issue implementation guidelines subject to a time-limited sunset and parliamentary oversight.
    Act RulesBills
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    Self-assessment obligation: pay tax, interest and fees before filing return, with proof, or face default consequences.
    Clause 266 requires payment, before filing the return, of any tax payable together with interest and fee and proof of such payment; payments short are appropriated in the order fee, then interest, then tax; interest is computed after reducing advance tax, TDS/TCS and specified reliefs and credits; ''assessed tax'' is defined as tax on returned income reduced by those credits and reliefs; failure to pay renders the assessee an assessee in default and triggers recovery and penal consequences without prejudice to other liabilities.
    Act RulesBills
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    Verification of returns: clarified authorised signatories and integration of insolvency professionals, with some procedural ambiguities remaining.
    Clause 265 modernises verification of returns by enumerating, in tabular form, the persons authorised to verify returns for specified taxpayer categories, preserving traditional authorities (individual, Karta, managing/designated partner, principal officer, CEO) while incorporating insolvency professionals for entities under insolvency. The Bill omits an explicit "absence from India" reference for individuals and does not expressly require attachment of powers of attorney for non-resident companies, raising potential evidentiary and interpretive issues. The provision allows designation of "other persons as prescribed," aligning the statute with Rule 12AA but requiring careful subordinate rule-making.
    Act RulesBills
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    Electronic filing rules broaden CBDT authority to require verification, disclosures, and secure transmission for tax returns.
    Clause 263(2)(a) expands CBDT rule-making authority over procedural return-filing aspects by authorising prescription of classes of persons, the form and manner of furnishing returns, methods of verification, supporting documentation requirements (including post-filing production), and the technological resources or electronic records for transmission, thereby enabling broader disclosures, digital authentication, and integration with other databases to support data-driven compliance.
    Act RulesBills
    Show AI Summary
    Return filing modernization enables rulemaking for electronic forms, verification, and document on demand in a risk based regime.
    Clause 263(2)(a) empowers the Board to prescribe the form, manner, verification and electronic transmission of returns, to specify which supporting documents need not accompany the return but must be produced on demand, and to require prescribed particulars in returns (such as exempt income, specified assets, bank and card details, high value expenditures, audit reports and business or partner details), thereby enabling a risk based, post filing verification regime and differentiated electronic filing requirements for classes of taxpayers.
    Act RulesBills
    Show AI Summary
    Tax Return Preparer scheme shifts operational detail to subordinate legislation, increasing administrative discretion and need for oversight.
    Clause 264 empowers the Central Board of Direct Taxes to notify a Tax Return Preparer scheme allowing specified non corporate, non audited persons to have returns prepared and furnished through authorised TRPs. The clause retains exclusions for audit required entities and certain disqualified persons, mandates scheme notification as per the statutory procedure, and delegates operational details-qualifications, authorisation period, code of conduct, duties, withdrawal and disciplinary mechanisms-to subordinate legislation, increasing administrative flexibility while placing emphasis on oversight, transparency, and transitional arrangements.
    Act RulesBills
    Show AI Summary
    PAN-Aadhaar authentication strengthens transaction traceability and imposes reciprocal verification duties on parties.
    Clause 262(9) requires every person entering into prescribed transactions to quote and authenticate their PAN or Aadhaar and obliges recipients of transaction documents to ensure such quoting and authentication, with authentication involving verification against demographic or biometric information through prescribed authorities and modalities to be specified by the CBDT.
    Act RulesBills
    Show AI Summary
    Permanent Account Number and Aadhaar integration expands mandatory identification and digital authentication for specified transactions and filings.
    Clause 262 consolidates allotment, quoting and authentication of the Permanent Account Number and integrates PAN with Aadhaar by mandating application and quoting obligations for specified classes, enabling voluntary applications, requiring intimation of changes, prohibiting multiple PANs, and empowering rule-making and notification to prescribe transactions, authentication procedures and exemptions; it permits Aadhaar linkage and use in lieu of PAN, contemplates inoperative PAN for non-intimation, and relies on Rules 114AAB, 114B, 114BA and 114BB for operational detail while triggering penalties under the existing framework modeled on Section 272B.
    Act RulesBills
    Show AI Summary
    Mandatory Return Filing expands scope and tightens timelines while enabling updated returns with safeguards.
    Clause 263 consolidates and expands return-filing obligations by listing classes of mandatory filers, requiring threshold income computation without regard to specified exemptions, defining key terms such as beneficial owner and specified entity, prescribing differentiated due dates, authorising rule-making for electronic filing and return particulars, providing a nine-month window for belated and revised returns, maintaining a forty-eight-month updated return regime subject to specified exclusions, and setting a procedure for defective returns with a rectification period and potential invalidation if unrectified.
    Act RulesBills
    Show AI Summary
    Controlled disclosure of taxpayer information limited by a public interest test, with executive power to restrict access and final administrative decisions.
    Clause 258 authorises income tax authorities to disclose information obtained in the discharge of their functions to other tax, duty, cess, or foreign exchange authorities and to notified bodies, constrained by necessity and a public interest limitation; it allows private parties to apply for information subject to satisfaction of senior tax officials and renders disclosure decisions final and non justiciable, while empowering the Central Government by notification to restrict furnishing of information for specified classes of assessees or authorities.
    Act RulesBills
    Show AI Summary
    Deemed judicial status for tax proceedings brings perjury and court grade procedural safeguards to tax adjudication processes.
    Clause 257 treats proceedings before income tax authorities as judicial proceedings and deems those authorities to be Civil Courts for specified sections of the Bharatiya Nyaya Sanhita, 2023 and the Bharatiya Nagarik Suraksha Sanhita, 2023, thereby subjecting participants to penal provisions for false evidence, insult to authority, and related offences while preserving a complaint based procedural safeguard for initiating prosecutions through the income tax authority.
    Act RulesBills
    Show AI Summary
    Faceless collection of information: executive empowered to implement digital, non interface tax information schemes with parliamentary oversight.
    Clause 260 empowers the Central Government, by notification, to create a faceless collection of information scheme for calling for and collecting tax information, inspecting company registers, and exercising assessing powers, enabling elimination of physical interfaces, centralised resource optimisation, team based dynamic jurisdiction, and exceptions or modifications to other statutory provisions to implement the scheme, with the requirement that notifications be laid before both Houses of Parliament.
    Act RulesBills
    Show AI Summary
    Powers of competent authority: generic clause grants Assessing Officer equivalent enquiry powers, raising definition and safeguard concerns.
    Clause 256 gives a competent authority the power to make any enquiry under the Act with all the powers of an Assessing Officer, mirroring Section 135 of the 1961 Act but replacing an enumerative list of officials with a generic term whose scope depends on definitions and notifications; the clause defers procedural safeguards to the general framework of the Act, making clear definition and transparent designation critical to avoid arbitrariness and jurisdictional overlap.
    Act RulesBills
    Show AI Summary
    Inspection of company registers enables tax units to verify ownership and financial interests under faceless assessment reforms.
    Inspection of company registers authorises specified income-tax authorities to inspect and copy registers of members, debenture holders and mortgagees to verify ownership and transactions; such inspections require specific written authorisation and Clause 255 expands exercisable authority to unit-based entities like assessment and verification units, enabling centralized and faceless access while raising questions on necessity thresholds, coverage of electronic records, and procedural safeguards.

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      Review of Customs duty Exemptions

      1 February, 2025

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      Union Budget 2025-26 (Full) + Finance Bill, 2025

      VII. Review of Customs duty Exemptions

      A. Review of conditional exemption rates of BCD prescribed in notification No. 50/2017- Customs dated 30.6.2017:

      A comprehensive review has been undertaken in respect of 25 conditional exemptions/concessional rate entries in Notification No. 50/2017-Customs dated 30th June, 2017 whose validity is expiring by 31.3.2025. After review, 24 entries are being continued for varying periods with modification in few entries and 1 entry is being lapsed.

      (1) The details of exemptions/concessional rates being extended with or without modifications:

      S.No

      Description

      Entry No

      End date

      1

      Ships and vessel for breaking up

      S. No. 555A

      31.3.2035

      2

      Raw materials, components, consumables or parts, for use in the manufacture of ships/vessels

      S. No. 559

      31.3.2035

      3

      Bulk drugs for manufacture of drugs or medicines [A separate entry is being created for Drugs, medicines, diagnostic kits specified in List 3 with modifications in the list]

      S. No. 166

      31.3.2029

      4

      Bulk drugs used in the manufacture of polio vaccine and Monocomponent insulins

      S. No. 166A

      31.3.2029

      5

      Bulk drugs used in the manufacture of life saving drugs or medicines [A separate entry is being created for Drugs, medicines, diagnostic kits specified in List 4 with modifications in the list]

      S. No. 167

      31.3.2029

      6

      Drugs, Medicines or Food for Special Medical Purposes (FSMP) used for treatment of rare disease

      S. No. 167A S. No. 607B

      31.3.2029

      7

      Good specified in List 36 imported by testing agencies specified in List 37, for the purpose of testing and/or certification

      S. No. 532A

      31.3.2029

      8

      Crude Glycerin for use in manufacture of Epichlorohydrin

      S. No. 81A

      31.3.2027

      9

      Denatured ethyl alcohol for use in manufacture of industrial chemicals

      S. No. 104B

      31.3.2027

      10

      Fish meal for use in manufacture of aquatic feed S. No. 104C 31.3.2027

       

       

      11

      Goods for the manufacture of telecommunication grade optical fibres or optical fibre cables

      S. No. 168, S. No. 341, S. No. 341A

      31.3.2027

      12

      Textile machinery (with addition of two new machinery)

      S. No. 460 S. No. 460A S. No. 460B S. No. 460C S. No. 460D

      31.3.2027

      13

      Parts and components for use in manufacturing of textile machineries

      S. No. 460E

      31.3.2027

      14

       Goods for use in the manufacture of Open cell of LCD and LED TV panel

      S. No. 515B

      31.3.2027

      15

      Seeds for use in manufacturing of rough Lab- Grown Diamonds [IGCR condition removed]

      S. No. 345B

      31.3.2026

      16

      Parts of wind operated electricity generators, for the manufacture or the maintenance of wind operated electricity generators [The entry has also been modified]

      S. No. 405

      31.3.2026

      17

      Permanent magnets for manufacture of PM synchronous generators above 500KW for use in wind operated electricity generators

      S. No. 406

      31.3.2026

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      (2) The following entry is being allowed to lapse with effect from 01.04.2025:

      S. No.

      S. No. of 50/2017- Customs

      Description

      1.

      489AA

      Heat Coil for use in the manufacture of Electric Kitchen Chimneys falling under tariff item 84146000

      (3) Other Changes in notification No. 50/2017 -Customs dated 30.6.2017

      Certain entries are being modified as under:

      S. No.

      S. No. of 50/17-Cus

      Brief Description

      1.

      257A

      9 new groups of items such as sea shell, adhesive etc are being added to the list of duty free items for use in manufacture of handicrafts for export. The time period for export of the handicraft items is also being increased from 6 months to 1 year, further extended by another three months.

      2.

      539

      BCD exemption is being extended to imports of ground installations for satellites and payloads and its spares and consumables of such installations.

      3.

      539A

      BCD exemption is being provided on goods for use in the building of launch vehicles and launching of satellites

      Note: Description of entries is indicative. Notification may be referred to for complete description.

      B. Amendment of Notifications Nos. 16/2017-Customs dated 20.04.2017 and 153/94-Customs dated 13.07.1994

      Notification No.

      Brief Description

      16/2017-customs dated 20.04.2017

      The notification exempts specified drugs and medicines from the whole of the duty of customs leviable thereon subject to their being supplied free to cost to patients under Patient Assistance Programme (PAP) run by the pharmaceutical companies.

       

      37 new drugs and 13 patient assistance programmes are being added to the list

      153/94-customs dated 13.07.1994

      Currently, articles of foreign origin can be imported into India for maintenance, repair and overhauling subject to their export within six months extendable to 1 year. The duration for export in the case of railway goods imported for such purpose has been increased from 6 months to 1 year further extendable by 1 year

      Note: Description of entries is indicative. Notification may be referred to for complete description.

       


      Full Text:

      Union Budget 2025-26 (Full) + Finance Bill, 2025

      Topics

      ActsIncome Tax