Loading...

⚠ ✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters 0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 Filters / Advanced Search ❯
TEXT

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws---- ❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
Relevance Default Date
    Manuals Income Tax
    Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents...
    Manuals Income Tax
    Does ICDS apply for the purposes of computing exemption u/s 11 to 13.
    Manuals Income Tax
    Does ICDS apply to the applicability aspect of the TDS.
    Manuals Income Tax
    How will ICDS apply to companies which adopted Ind-AS. (Indian accounting standards)
    Manuals Income Tax
    Whether the provisions of ICDS shall apply to Banks, Non-banking financial institutions, Insurance ...
    Manuals Income Tax
    Whether ICDS is applicable to Non-Residents whose income is liable to be taxed at a flat rate of tax...
    Manuals Income Tax
    Can a assessee opt to change his method of accounting from mercantile to cash basis.
    Manuals Income Tax
    Can ICDS would apply to other categories of taxpayers whose income is taxed under presumptive tax sc...
    Manuals Income Tax
    Can a assessee can follow different methods of accounting for different sources of income under the ...
    Manuals Income Tax
    Can ICDS apply to a person following cash system of accounting and to the person whose books of acco...
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Currency conversion using telegraphic transfer buying rate (‘TTBR...
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Documents to be furnished for availing FTC
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) in case of MAT/ AMT
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Lower of the tax payable under the Act and DTAA
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Cases in which no FTC benefit would be available
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) shall be allowed if evidence & undertaking furnished within 6 months ...
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Meaning of foreign tax
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - Benefit on proportionate basis
    Act Rules Income Tax
    Foreign Tax Credit (‘FTC’) - FTC benefit in the year in which income offered to tax
    Manuals Income Tax
    STEPS NEED TO BE TAKEN AFTER APPROVAL ADVANCE PRICING AGREEMENT(APA)?
❮
❯
❯❯
Maximize Maximize Maximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

+

Are you sure you want to delete "My most important" ?

NOTE:

Notes
Showing Results for :
Reset Filters
Results Found:
Show All Summaries Hide All Summaries
Manuals Income Tax
Show AI Summary
ICDS applicability may govern specified transactional tax issues, raising whether prior judicial precedents remain operative.
The ICDS, notified under section 145(2), are intended to standardise computation of business and other income for the transactional issues they address and apply to assessment years following notification. They were framed after reviewing judicial views to supply authoritative guidance where earlier judicial decisions arose without statutory standards; nevertheless, some ICDS provisions may conflict with those precedents, posing a question about which authority should prevail.
Manuals Income Tax
Show AI Summary
ICDS application: accounting standards govern business income computation for exempt trusts, triggering ICDS when commercial books are maintained.
ICDS do not apply to the standalone computation of exemption for charitable entities based on the commercial concept of income; however, when income is taxed under the regular heads, ICDS apply to income classified under Profits and Gains of Business or Profession and Income from Other Sources if books are kept on the mercantile system. If a trust carries on incidental business with separate books, business income must be computed on a commercial basis and ICDS apply to that business income despite entitlement to charitable exemption.
Manuals Income Tax
Show AI Summary
Applicability of ICDS may indirectly determine whether TDS provisions apply by altering gross receipts/turnover calculations.
ICDS influence the computation of gross receipts/turnover used to determine whether statutory TDS provisions apply; while ICDS govern income computation and not TDS rules, their application to receipts can indirectly change whether individuals, HUFs or presumptive taxpayers cross the turnover benchmarks that attract TDS obligations.
Manuals Income Tax
Show AI Summary
ICDS applicability: applies to taxable income computation under business or other income irrespective of Ind AS adoption.
For computing taxable income under the heads Profits and Gains of Business or Profession and Income from Other Sources, ICDS provisions govern determination of income irrespective of whether an entity follows erstwhile Accounting Standards or Ind AS for financial reporting; companies adopting Ind AS must apply ICDS adjustments when computing taxable income under those heads.
Manuals Income Tax
Show AI Summary
ICDS applicability clarified: sector-specific provisions and statutory overrides determine application to banks, insurers and financial firms.
ICDS apply generally for income computation unless an ICDS contains sector-specific provisions or the substantive law provides a special regime; ICDS VIII addresses banks and certain financial institutions, while statutory and regulatory accounting requirements for insurance business prevail over general ICDS provisions.
Manuals Income Tax
Show AI Summary
ICDS applicability to non-residents ensures income is determined under ICDS before flat-rate tax treatment on passive receipts.
ICDS applies to non-resident income taxed at a flat rate-such as interest, royalty and fees for technical services-because the flat tax is applied after determination of income, so Income Computation and Disclosure Standards govern measurement and recognition for computing taxable income.
Manuals Income Tax
Show AI Summary
Change of accounting method: an assessee may adopt cash basis if the change is bona fide and consistently applied thereafter.
An assessee may change the method of accounting from mercantile to cash basis if the change is bona fide and is followed regularly thereafter; such a change is distinct from a change in accounting policy and must be consistently applied to support proper income computation and disclosure.
Manuals Income Tax
Show AI Summary
ICDS revenue recognition applies to presumptive tax schemes computing income from gross receipts or turnover.
ICDS on revenue recognition applies to taxpayers under presumptive tax schemes when such schemes compute income by reference to gross receipts, turnover or similar revenue measures; absent an express exclusion, ICDS principles govern the computation of those receipts or turnover for income-tax computation and disclosure.
Manuals Income Tax
Show AI Summary
Accounting method application: ICDS governs sources using the mercantile system but not sources accounted on a cash basis.
ICDS applies at the source level: it governs only those sources where the assessee follows the mercantile (accrual) system of accounting and does not apply to sources maintained on the cash system, a distinction intended to prevent escapement of income caused by heterogeneous accounting across an assessee's activities.
Manuals Income Tax
Show AI Summary
ICDS applicability limited to mercantile accounting; excludes cash-accounting and individuals/HUFs not subject to tax audit.
ICDS applies to persons following the mercantile system of accounting and does not apply to those following the cash system. For individuals and HUFs, ICDS is applicable only if they carry on business or profession and their books are required to be audited under the tax audit provisions; it does not apply where there is no business or professional income even if mercantile accounting is followed for other heads.
Act Rules Income Tax
Show AI Summary
Foreign tax credit conversion uses telegraphic transfer buying rate on the last day of preceding month.
Foreign tax credit is determined by converting the currency of the foreign-tax payment at the telegraphic transfer buying rate applicable on the last day of the month immediately preceding the month in which that tax is paid or deducted.
Act Rules Income Tax
Show AI Summary
Foreign Tax Credit documentation: verified income statement plus certificate and payment or deduction proof to claim credit.
Foreign Tax Credit eligibility requires a verified statement of foreign income and foreign tax paid in the prescribed form, plus a certificate or statement specifying the nature of the income and tax deducted or paid issued by the foreign tax authority, the person who deducted the tax, or signed by the taxpayer, accompanied by a tax challan or online payment acknowledgement for payments and proof of deduction where tax was withheld.
Act Rules Income Tax
Show AI Summary
Foreign tax credit allowed against MAT/AMT like normal tax, but any excess over normal provisions is ignored.
Foreign tax credit under Rule 128 of the Income tax Rules, 1962, is allowable against tax payable under MAT or AMT in the same manner as under the normal provisions; any foreign tax credit available against MAT/AMT that exceeds the credit allowable under normal provisions is ignored when computing MAT/AMT credit.
Act Rules Income Tax
Show AI Summary
Foreign tax credit: credit limited to lower of domestic tax and foreign tax; treaty excess is disregarded.
Rule 128 of the Income tax Rules, 1962 limits Foreign Tax Credit to the lesser of domestic tax chargeable on the doubly taxed income and the foreign tax actually paid, and directs that any foreign tax paid in excess of the tax payable under the applicable DTAA be ignored for credit computation.
Act Rules Income Tax
Show AI Summary
Foreign Tax Credit denial: no credit for domestic interest, fees or penalties and for disputed foreign taxes.
Rule 128 restricts Foreign Tax Credit by disallowing FTC against interest, fees or penalties payable under the Income-tax Act, and by excluding any foreign tax (or part thereof) that is disputed by the assessee.
Act Rules Income Tax
Show AI Summary
Foreign Tax Credit requires evidence of settlement, proof of payment and an undertaking within six months of dispute resolution.
Foreign Tax Credit (FTC) is allowed for disputed foreign tax only if, within six months from the end of the month in which the dispute is finally settled, the assessee furnishes evidence of settlement, evidence that the tax liability has been discharged by the assessee, and an undertaking that no refund in respect of that amount has been or will be claimed.
Act Rules Income Tax
Show AI Summary
Foreign tax definition determines FTC scope: DTAA-covered taxes apply, otherwise income-tax-type foreign levies qualify for credit.
Definition of foreign tax for Foreign Tax Credit under Rule 128: where a DTAA exists, foreign tax is the tax covered by that DTAA; where no DTAA exists, foreign tax is the tax payable under the foreign country's law in the nature of income-tax as defined in the statutory explanation, including excess profits tax or business profits tax charged on profits by central or local authorities.
Act Rules Income Tax
Show AI Summary
Foreign tax credit proportionate allocation ensures foreign tax relief is apportioned when income is taxed across multiple years.
Foreign tax credit under the Income tax Rules operates on a proportionate allocation principle when the same income is taxable in more than one year; the credit entitlement must be apportioned across the years in which the income is offered to tax so that relief for foreign taxes corresponds to the portion of income taxed in each year.
Act Rules Income Tax
Show AI Summary
Foreign tax credit allowed when foreign tax corresponds to income offered or assessed to tax in India in the same year.
Foreign tax credit is available to Indian residents for tax paid in a foreign country or specified territory, and is allowed only in the year when the corresponding income is offered to tax or assessed to tax in India, creating a temporal link between domestic taxation of the income and recognition of the foreign tax credit.
Manuals Income Tax
Show AI Summary
Advance Pricing Agreement requires modified returns and extends reassessment deadlines for affected assessment years by tax authorities.
Entry into an Advance Pricing Agreement fixing the arm's length price requires the taxpayer to file a modified return for each affected assessment year within three months from the end of the month in which the APA is executed. If an assessment was already completed, the Assessing Officer must reassess under the APA and complete that reassessment within one year from the end of the financial year in which the modified return is filed. If the assessment was pending, the Assessing Officer may complete it within an extended timeframe permitted for APA-related assessments.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

Comparison of Section 2(28) "Company" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

19 August, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

Print

Print

Section 2 Definitions.

Income-tax Act, 2025 [As Passed]

At a Glance

The texts are: (i) Section 2 Definitions of the Income-tax Act, 2025 [As Passed] (Document 1), and (ii) Clause 2 (Definitions) of the Income Tax Bill, 2025 - old version (Document 2). Both set out extensive definitions that frame the entire Act/Bill. The definition of "company" at clause (28) is materially comparable across the two texts but contains drafting differences; there are also scattered wording, cross-reference and formatting differences across the wider Clause 2. Affected parties include taxpayers, corporate entities, tax administrators and practitioners interpreting eligibility, scope and transitional references. Effective date or decision date: Not stated in the document.

Background & Scope

Statutory hooks: Section/Clause 2 provides definitions foundational to the Income-tax Act / Income Tax Bill and is explicitly preliminary in character. The documents list defined expressions (accountant; advance tax; agricultural income; amalgamation; capital asset; company; dividend; virtual digital asset; etc.). Where cross-references to other legislation are used (Companies Act, SEBI Act, RBI Act, IT Act, Companies (Indian Accounting Standards) Rules, Bharatiya Nyaya Sanhita, etc.), those references are retained. The texts provide internal definitions and qualifying provisos for many expressions. Definitions that are not modified or that are identical between the two texts are not separately flagged unless relevant to interpretive contrast. Any specific legislative intent beyond wording: Not stated in the document.

Statutory Provision Mode

Text & Scope

Clause 2 / Section 2 operates as the definitional foundation for the Act/Bill. It enumerates numerous terms and, in many cases, sets out sub-clauses, provisos and cross-references that influence the meaning of operative provisions elsewhere in the statute. Key thematic areas covered include constitutional scope ("India"), personhood and entity classes ("person", "company", "domestic company", "foreign company"), capital assets and capital gains terminology ("capital asset", "short-term/long-term capital asset", "transfer"), tax administration offices (Commissioner, Assessing Officer), income heads and inclusions ("income"), and modern concepts such as "virtual digital asset".

Interpretation

The definitional text manifests standard interpretive signals: express inclusions and exclusions, cross-references to other statutory definitions (e.g., Companies Act, SEBI Act), and discrete criteria that make certain categories (e.g., "company in which the public are substantially interested") contingent on quantifiable thresholds (40%/50% shareholding, population distances for agricultural land, etc.). The Act version (Document 1) and the Bill (Document 2) show largely parallel structures but with drafting and cross-reference variations that may affect temporal scope and transitional interpretation in narrow respects. Legislative intent beyond textual meaning is Not stated in the document.

Exceptions/Provisos

The texts include numerous exceptions and provisos within definitions. Examples: "capital asset" excludes certain agricultural land subject to population/distance tests; "dividend" excludes distributions in particular circumstances (e.g., items (i)-(v) in clause (40)); "short-term capital asset" contains specific exceptions for securities and certain units with substitution of "twelve months" for "twenty-four months". These carve-outs are expressed within the definitions themselves and operate as direct exceptions to general meaning.

Illustrations

  • Example 1: A share listed on a recognised Indian stock exchange held for 9 months - under the definition in both texts the holding period for short-term/long-term characterisation is 12 months for such securities (i.e., treated as short-term if held <= 12 months). This follows the substitution specified in the short-term capital asset clause.

  • Example 2: A building adjacent to agricultural land used by a cultivator for storage and occupied by the cultivator will, if within the specified municipal/population/distance parameters, qualify for inclusion in agricultural income under clause (5)(c) subject to the stated provisos.

  • Example 3: A token defined as a "virtual digital asset" - non-fungible token or crypto-asset relying on distributed ledger technology - falls within clause (111) subject to any Central Government notifications excluding particular digital assets.

Interplay

The definitions repeatedly invoke other statutory provisions and delegated instruments (Finance Act rates, Companies Act provisions, SEBI regulations, notification powers, rules to be prescribed etc.). Where the Bill and Act texts differ in cross-reference phrasing or additional qualifiers, the interplay with transitional provisions, savings clauses or specific sections elsewhere could be affected. Specific references to Rules/Notifications/Circulars beyond those cited in the texts themselves: Not stated in the document.

Differences between Section 2(28) (Act, Document 1) and Clause 2(28) (Bill, Document 2) - and practical impact

  • Textual formulation of clause (28) - "company":

    • Document 1 (Act) defines "company" as (a) any Indian company; or (b) any body corporate incorporated by or under the laws of a country outside India; or (c) any institution, association or body which is or was assessable or was assessed as a company under the Income-tax Act,1961, as it stood immediately before its repeal by this Act; or (d) any institution, association or body ... declared by order of the Board.

    • Document 2 (Bill) uses largely similar limbs but expands or varies the wording in (c): it specifies "for any assessment year so referred to in that Act" and adds certain wording around timing ("hereinafter referred to as the Income-tax Act,1961), for any assessment year so referred to in that Act;").

    • Practical impact: the Bill's (c) expressly confines the continuing footprint of entities assessed under the old Act to those assessments relating to particular assessment years; the Act's (Document 1) wording is broader and omits the temporal qualification phrase present in the Bill. This may marginally affect transitional treatment of entities with a historical character under the old Act (i.e., whether entities assessed earlier but not in specified assessment years remain captured). The documents do not state transitional provisions; therefore full practical consequences across assessments: Not stated in the document.

  • Minor drafting differences: Document 1's clause (6) (amalgamation) and clause (22) (capital asset) include slightly different punctuation and parenthetical formulations compared with Document 2.

    • Example: Document 1 uses "herein referred to as the Income-tax Act,1961" while Document 2 uses "hereinafter referred to as the Income-tax Act,1961), for any assessment year so referred to in that Act".

    • Practical impact: largely drafting/clarificatory; however, where temporal references are introduced in the Bill, those could create interpretive limits on the retrospective or historical application of the definition. The significance depends on any transitional or savings provisions (which are Not stated in the document).

  • Differences in cross-references and sub-clause content: scattered discrepancies exist in cross-references (e.g., to schedules, to section numbering or table references).

    • Practical impact: potential for misalignment when applying other sections dependent upon precise cross-references; in practice, legislative consolidation in the final Act (Document 1) presumably resolves these. The documents do not state how conflicts are to be resolved beyond the final Act text: Not stated in the document.

  • Formatting and lexical differences across many definitions (e.g., "personal effects" wording, distance table formatting, language such as "and includes" vs "and shall include"):

    • Practical impact: minimal substantive change in most cases but may affect interpretive nuance (e.g., whether certain items are classed as inclusive examples or mandatory inclusions). The precise interpretive consequence in litigation or administrative practice: Not stated in the document.

Practical Implications

  • Compliance and risk areas: practitioners should note the final Act wording where definition-driven liabilities hinge on thresholds (e.g., what counts as "company", "domestic company", "company in which the public are substantially interested", and the population/distance tests for agricultural land). Any transactional structuring that relies on historical assessment status under the repealed Income-tax Act, 1961 requires attention to the exact transitional phrasing (differences between Bill and Act), although the document does not provide transitional rules.

  • Record-keeping/evidence: retain documentary proof of any historical assessment status or class characterisation (e.g., whether an institution was "assessable as a company" under the Income-tax Act, 1961), the dates and assessment years involved, shareholding percentages, listing status, and the municipal population/distance metrics for agricultural land exclusions. The statute itself references such factual thresholds; the document does not prescribe specific forms or filing procedures.

Key Takeaways

  • Section/Clause 2 is pivotal; definitions determine coverage and operation of many substantive rules.
  • The core definition of "company" is substantively similar in both texts but the Bill includes a temporal qualification in limb (c) that is not present in the Act text supplied; this may affect transitional interpretation of institutions assessed under the 1961 Act.
  • Many differences are drafting-level (punctuation, cross-reference phrasing, parenthetical insertions) with limited apparent substantive effect, but precise outcomes depend on transitional and saving clauses not contained in the documents.
  • Practitioners must focus on threshold facts embedded in definitions (shareholding percentages, listing status, population/distance tests, dates of issue/assessment) when applying the tax provisions.
  • The inclusion of modern terms (e.g., "virtual digital asset") confirms coverage of digital assets; the Central Government retains notification power to exclude specific digital assets.
  • Where the document is silent about transitional mechanics and legislative intent beyond wording, those matters remain Not stated in the document.

Full Text:

Section 2 Definitions.

Topics

Acts Income Tax