Documentation penalties: new clause preserves ad valorem and flat penalties, reinforcing strict transfer pricing compliance for cross border transactions.
Clause 442 establishes penalties for failures to maintain, report, or furnish accurate documentation for international transactions and specified domestic transactions, comprising an ad valorem penalty imposed by the Assessing Officer or Commissioner (Appeals) for non maintenance, non reporting or incorrect information, and a prescribed authority's power to levy a flat monetary penalty for failure to furnish required information; the provision largely mirrors Section 271AA but omits an explicit "without prejudice" clause and does not address reasonable cause or proportionality concerns.

Record keeping obligation triggers fixed penalty for non maintenance or non retention of prescribed tax records, raising proportionality concerns.
Clause 441 imposes a fixed penalty for failure to keep, maintain, or retain prescribed books of account and documents as required by the statutory reference provision, and vests authority to impose the penalty in the Assessing Officer and appellate officers. The clause applies an objective standard of liability, omits an explicit savings clause preserving other penalty provisions, and contains no express exception for reasonable cause, raising issues of cumulative penalties and proportionality.

Immunity from penalty: mechanism to obtain protection from penalty and prosecution when tax is paid and no appeal is filed.
Clause 440 permits an assessee to apply for immunity from penalty and prosecution where tax and interest under the assessment/reassessment order are paid within the notice period and no appeal is filed; the application must be made within one month in prescribed form, the AO must decide within three months after giving opportunity of being heard, immunity is granted only after the appeal period expires and excludes cases of aggravated defaults, and an order on immunity is final and bars appeal or revision if accepted.

Penalty for under-reporting: preserves formula-based computation and differential rates for misreporting, and procedural safeguards.
Clause 439 establishes a formula-based penalty framework empowering a defined Competent Authority to impose penalties for seven specified scenarios of under-reporting, prescribes quantified computation methods for first assessments, reassessments and deemed income, preserves exceptions for bona fide explanations and documented transfer pricing adjustments, requires written orders and bars double penalisation, and differentiates penalties by imposing a higher sanction for misreporting defined by a specified list of misrepresentation and suppression acts.

Mode of payment restrictions for property linked receipts expanded to include any monetary receipt related to proposed transfers.
Clause 189 of the Income Tax Bill, 2025 defines "banking company", certain rural finance institutions, "specified sum", and "specified advance" to frame non cash payment rules for receipts and repayments linked to immovable property. It mirrors the Explanation to Section 269T in several respects-notably the definition of "specified advance"-but adds an explicit "specified sum" to capture any monetary receipt related to a proposed property transfer whether or not the transfer occurs, thereby potentially broadening regulatory coverage and creating interpretative issues where payments overlap the two terms.

Mode of repayment restrictions: non cash repayment mandated for covered loans and advances to ensure traceability and compliance.
Clause 188 mandates non cash repayment of loans, deposits and specified advances by account payee cheque, bank draft, electronic clearing or other prescribed electronic modes when the amount or the aggregate held by the person equals or exceeds twenty thousand rupees, with a higher threshold of two lakh rupees for primary agricultural credit societies and related rural banks. It exempts repayments to Government and regulated banking or notified entities, allows intra branch crediting by banks, broadly defines "loan or deposit," covers advances related to immovable property, and emphasizes aggregation to prevent splitting transactions.

Digital payment mandate requires businesses to provide prescribed electronic modes, promoting traceability and reducing cash transactions.
Clause 187 mandates that every person carrying on business whose sales, turnover, or gross receipts exceed the prescribed monetary threshold in the immediately preceding tax year shall provide facilities for accepting payment through prescribed electronic modes, in addition to any other electronic modes offered; rule-making will specify the required modes, and compliance carries operational, record-keeping and penal implications while raising interpretive issues around prescription, group aggregation, and regulatory harmonization.

Restriction on high value cash transactions: mandatory use of prescribed banking or electronic modes to enhance traceability and compliance.
Clause 186 prohibits receipt of cash at or above the specified monetary threshold except through account payee cheque, bank draft, electronic clearing, or other prescribed electronic modes, applying the ban to aggregated daily receipts from the same person, single transactions, and transactions linked to a single event or occasion; exemptions include government and specified banking entities and further classes as notified by the Central Government, while interpretive ambiguities and delegated rulemaking on permissible modes may require administrative clarification.

Cash transaction restriction: acceptance of loans, deposits and advances must be made only through traceable banking or electronic modes.
Clause 185 prohibits accepting loans, deposits or specified sums in cash when the current transaction, the unpaid balance of prior transactions with the same person, or their aggregate reaches the prescribed threshold, and permits receipt only by account-payee cheque, account-payee bank draft, electronic clearing through a bank account or other prescribed electronic modes; exceptions cover the Government, specified banking and statutory entities, notified bodies, a rural higher threshold for primary agricultural credit societies and a narrow agricultural income exception.

Definition of High Court clarifies appellate forum for States and Union Territories in tax law, reducing jurisdictional ambiguity.
Clause 374 of the Income Tax Bill, 2025, provides a comprehensive, enumerated definition of "High Court" by designating the specific High Court applicable to each State and Union Territory, updating nomenclature, reflecting post reorganization realities (including Jammu & Kashmir and Ladakh), and replacing reliance on piecemeal adaptation orders; this consolidation reduces jurisdictional uncertainty, aids administrative and judicial efficiency, and highlights the need for legislative updates or transitional provisions if future territorial changes occur.

Monetary limits on tax appeals: Board may set filing thresholds; non filing does not amount to departmental acquiescence.
Clause 373 authorises the Board to fix monetary limits and other criteria for filing appeals by income tax authorities, permits the Board to revise those limits, and provides that non filing of an appeal in one case does not preclude filing in other years or against other assessees. The clause bars assessees from claiming departmental acquiescence due to non filing and directs tribunals and courts to have regard to the Board's instructions and the circumstances of filing or non filing while leaving the weight of those instructions to judicial discretion.

Exclusion of time to obtain copy suspends limitation for appeals and applications when copy not provided, subject to diligence.
Clause 372 excludes the day of service and, where a copy was not provided with the notice, the time required to obtain that copy from computation of limitation for appeals and applications; the exclusion is subject to the assessee's reasonable diligence and requires documentary proof of application and receipt, with electronic service and portal access raising specific interpretive issues.

Consequential amendment of member assessments: appellate modification must trigger authorised adjustments to individual tax liabilities.
Clause 371 requires that when appellate proceedings alter or direct a new assessment of a body of individuals or association of persons, the appellate authority must authorise the Assessing Officer to amend or make a fresh assessment of any member; the authorisation is mandatory, and the Assessing Officer may act only pursuant to that order. The clause modernises appellate references and retains the two-step mechanism while raising interpretive issues concerning the scope of "any member", timelines for action, and the definition of "fresh assessment".

Execution of Supreme Court cost orders: High Courts may transmit awards for local enforcement under established execution rules.
The High Court, on petition, may transmit an order of the Supreme Court awarding costs to any court subordinate to the High Court for execution; the provision is limited to cost-related orders, is discretionary in application, requires adherence to execution rules and the Code of Civil Procedure, and mirrors the predecessor provision, leaving unresolved questions about the scope of "costs," appropriate subordinate fora, and special procedures where a government entity is the judgment debtor.

No automatic stay on tax recovery: assessed tax remains payable during appellate pendency unless a specific judicial stay is granted.
Clause 369 requires that tax determined by an assessment order is payable despite the filing of an appeal to the High Court or Supreme Court, reflecting the No Automatic Stay principle that assessment orders remain enforceable unless a competent forum grants a specific stay; it narrows scope to appeals at the highest judicial levels, streamlines language compared with Section 265, and places onus on taxpayers to obtain interim relief if they seek to defer payment while preserving courts' discretion to grant stays subject to conditions.

Faceless tax administration expanded: scheme-making power permits executive modification of tax law subject to parliamentary laying.
Clause 532 grants the Central Government power to notify schemes for any purpose of the Income Tax Act, 2025 to eliminate taxpayer interface and optimize resources, and to direct that Act provisions may be excluded or modified for scheme implementation; notifications must be laid before both Houses of Parliament and existing faceless schemes under the 1961 Act may be amended to ensure continuity.

Power to frame schemes expands executive authority to implement faceless, centralized tax administration with parliamentary oversight.
Clause 532 authorizes the Central Government to notify schemes for any purpose under the Income Tax Act, permit notification based exceptions or adaptations of statutory provisions to implement those schemes, amend or continue existing schemes, and requires that such notifications be laid before both Houses of Parliament, thereby enabling faceless, centralized, and technology driven administration while raising concerns about the breadth of delegated legislative power and the indeterminate standard of technological feasibility.

Revisionary jurisdiction prevents orders prejudicial to the assessee while ensuring timely administrative review and minimum processing time.
Clause 378 empowers senior tax officials as the Competent Authority to revise subordinate orders suo motu or on application, provided any revision is not prejudicial to the assessee. It prescribes one year limitation periods for initiation, allows condonation for sufficient cause, requires a nominal application fee, mandates disposal within a year from the end of the financial year of filing with specified exclusions for rehearings and judicial stays, and introduces a minimum sixty day residual period after exclusions for completion of revision.

Revisionary power: Competent Authority can revise orders prejudicial to revenue after hearing and within limitation.
Clause 377 empowers a defined Competent Authority to call for and examine the record of proceedings and, after giving the assessee an opportunity of being heard and making necessary inquiry, to revise orders that are erroneous and prejudicial to the revenue by enhancing, modifying, cancelling or directing fresh assessments, including specified transfer pricing orders; it sets a two year limitation subject to exceptions to give effect to appellate directions and excludes certain periods from the limitation computation.

Appeals to Supreme Court: new bill mirrors CPC procedure but omits a saving proviso, raising interpretive risk.
Clause 368 adopts the Code of Civil Procedure procedures for appeals to the Supreme Court "so far as may be", vests the Court with discretion on costs, and mandates that where a High Court judgment is varied or reversed, effect be given to the Supreme Court's order through the Bill's prescribed execution mechanism. The saving phrase and the absence of an express proviso preserving other reference and stay provisions are central interpretive and practical concerns.