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    TDS on purchase of goods: buyer withholding required, with precedence rules to avoid overlap with other withholding provisions.
    Clause 393(1)[Table: S.No. 8(ii)] imposes a TDS obligation on the buyer to deduct tax on purchases of goods from resident sellers once aggregate purchases from a seller in a financial year exceed the specified threshold, with deduction due at credit or payment, and a broad exclusionary clause preventing application where tax is deductible or collectible under any other provision of the Act.
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    TDS on specified senior citizens centralises tax deduction at banks, relieving return filing when tax is correctly deducted at source.
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    TDS on e-commerce: operators must withhold on gross platform-facilitated sales, with a small-seller exemption on conditions.
    E-commerce operators must withhold TDS on the gross amount of sales or services facilitated through their platforms, with withholding due at the earlier of credit or payment and including direct buyer payments as deemed payments by the operator. Deductions apply on a gross basis without netting fees, exclude operator receipts for unrelated services such as advertising, and take precedence over other TDS provisions. Individual and HUF participants with annual turnover below the legislated threshold who furnish PAN or Aadhaar are exempt from withholding.
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    TDS on large cash withdrawals: deduction at payment with exemptions for banks and regulated intermediaries, non filer rule absent here.
    Clause 393(3) requires banks, co operative societies engaged in banking and post offices to deduct two per cent TDS at the time of cash payment where aggregate withdrawals from one or more accounts of a recipient exceed prescribed thresholds, with a higher threshold for co operative societies; Clause 393(4) exempts payments to the Government, banks, post offices, regulated business correspondents and authorised white label ATM operators. The Bill mirrors the existing framework but, in the extracted text, omits an explicit non filer regime and express central government notification powers, creating potential operational and interpretive uncertainty.
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    TDS on high-value payments by individuals/HUFs expands withholding obligations for contractual, professional and commission disbursements.
    Clause 393(1)[Table: S.No. 6(ii)] requires TDS by individuals or HUFs (not otherwise liable under specified TDS entries) on payments to a resident for carrying out work (including supply of labour), fees for professional services, or commission/brokerage (excluding insurance commission) where aggregate payments to the payee in a tax year exceed a prescribed threshold; deduction is at the time of credit or payment and the clause is integrated into a tabular TDS framework necessitating aggregation, with definitions and certain procedural relaxations left to rules or guidance.
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    TDS on interest for foreign borrowings consolidated under new clause, keeping concessional framework but raising definitional and transition issues.
    Clause 393(2) consolidates concessional TDS treatment for interest to non residents on foreign currency borrowings, rupee denominated bonds and IFSC listed bonds, aligning mechanics and cut off windows with Section 194LC while differing in presentation and reliance on external definitions; Central Government approval remains a condition for specified instruments and drafting gaps on limits, definitions and transitional treatment may require subordinate rules to avoid interpretive disputes.
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    Clause 393 mandates TDS on distributions by a securitisation trust: Clause 393(1) imposes 10% TDS on any income paid to resident investors with no threshold, deducted at the earlier of credit or payment by the trust; Clause 393(2) requires withholding on non-resident investors at rates in force, permitting treaty relief. Both provisions treat credits (including to suspense accounts) as TDS events and require trusts to maintain documentation of payee status and treaty claims.
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    TDS on investment fund distributions: withholding applies, with treaty relief and exemptions for non taxable income.
    TDS on distributions by investment funds requires withholding at applicable resident and non resident rates at the earlier of credit or payment, excluding any portion of income that is statutorily exempt. Funds must determine and segregate taxable versus exempt portions of mixed income, apply treaty or domestic rates for non residents upon proper documentation, and maintain records to support exemptions or reduced rates, while coordinating these obligations with other TDS provisions to avoid double deduction.
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    TDS on business trust distributions: differentiated resident/non resident rates and SPV contingent exemptions under the Income Tax Bill, 2025.
    Clause 393 of the Income Tax Bill, 2025 mandates 10% TDS on distributed income to resident unitholders, differentiated rates for non-resident unitholders (including lower rates for certain interest-type distributions and "rates in force" for others), and exempts specified distributions from TDS where the underlying SPV has not opted for the concessional tax regime, thereby tying withholding obligations to the SPV's tax-regime choice.
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    TDS on infrastructure debt fund interest: concessional withholding retained for non-resident investors, deducted at credit or payment.
    Clause 393(2)[Table: S.No. 5] retains a concessional TDS regime for any income by way of interest paid by an infrastructure debt fund listed in Schedule VII to a non resident (including foreign companies), requiring deduction at source at the specified concessional rate at the earlier of credit or payment, with no monetary threshold, and integrated within the Bill's harmonised TDS framework that addresses procedural rules, exceptions, grossing up, and interaction with double taxation treaties.
    Act RulesBills
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    TDS on land acquisition compensation maintained; threshold and RFCTLARR Act exemptions preserved, procedural consolidation introduced.
    Clause 393 of the Income Tax Bill, 2025 mandates TDS at 10% on any sum in the nature of compensation or enhanced compensation, or consideration or enhanced consideration, for compulsory acquisition of immovable property (other than agricultural land), when amounts paid or credited to a resident exceed Rs. 5,00,000 in a financial year; Clause 393(4) exempts awards or agreements exempt from income-tax under the RFCTLARR Act, and deduction is required at the earlier of payment or credit.
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    TDS on mutual fund distributions: withholding required at source with exclusion for capital gains, subject to threshold rules.
    Clause 393 consolidates TDS on income from units of specified mutual funds and analogous instruments, requiring deduction by any payer at the prescribed rate at the time of credit or payment, subject to an aggregate threshold, while expressly excluding receipts that are of the nature of capital gains; the provision retains deeming rules for suspense accounts and links to cross referenced exemptions and schedules for definitions, thereby centralising administrative obligations and necessitating payer systems to characterise payments and aggregate receipts for threshold application.
    Act RulesBills
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    TDS on professional and technical services clarified: consolidated rates, threshold and personal-payment exemption streamline withholding obligations.
    Clause 393(1) requires TDS by a specified person on resident payments for professional services, technical services, director's fees (non-salary), royalty and related sums, with distinct lower rates for certain technical, cinematographic and call-centre payments and a higher rate for other cases, deductible at the earlier of payment or credit and applicable only above the prescribed threshold. Clause 393(4) exempts individuals and HUFs from TDS where payments are made exclusively for personal purposes.
    Act RulesBills
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    TDS on monetary consideration under development agreements - deduction at credit or payment with no threshold.
    Clause 393(1)[Table: S.No. 3(ii)] requires TDS on any monetary consideration under agreements referred to in section 67(14), applying to any payer, excluding in-kind consideration, with deduction at the earlier of credit or payment, no monetary threshold, and an explicit rule that where both general immovable property TDS and S.No. 3(ii) apply, deduction is to be made only under S.No. 3(ii).
    Act RulesBills
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    TDS on rent expanded to include equipment and furnished premises, increasing withholding scope and compliance for individuals and HUFs.
    Clause 393(3)[Table: S.No. 2(ii)] expands TDS on rent by subjecting payments for use of land, buildings, furniture, fittings, machinery, plant and equipment to withholding by specified persons where monthly payments exceed the threshold; it prescribes asset based rates and requires deduction at the earlier of credit or payment for the last month of the tax year or tenancy, while providing a declaration mechanism for nil deduction and procedural reliefs for small non business payers.
    Act RulesBills
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    TDS on immovable property transfers requires deduction on the higher of consideration or stamp duty value at payment or credit.
    Clause 393(1)[Table: S.No. 3(i)] requires TDS on transfers of immovable property (excluding agricultural land) where either the consideration or the stamp duty value exceeds the threshold. The transferee is the payer required to deduct tax at a fixed percentage of the higher of consideration or stamp duty value, with deduction at the time of credit or payment. Aggregation of amounts across multiple transferees and transferors applies, and the table provides tie breaker rules and specific exclusions such as compulsory acquisition.
    Act RulesBills
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    TDS on rent: payer-based uniform and differentiated withholding alters withholding obligations and REIT exemption treatment.
    Clause 393 requires TDS on rent to residents where monthly rent exceeds the threshold, with deduction at the earlier of credit or payment. Non-specified payers withhold at a uniform low rate for all asset types, while specified persons withhold at differentiated rates for machinery/plant/equipment versus land/building/furniture/fittings. The Bill maintains an exemption from TDS for payments to REITs in respect of directly owned real estate assets and preserves rules treating suspense-account credits as payment for withholding purposes.
    Act RulesBills
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    TDS on commission and brokerage: Bill preserves current threshold and rate and maintains targeted exemptions for telecom franchisees.
    Clause 393(1) mandates that a specified person deduct TDS at two percent on resident commission or brokerage payments (excluding insurance commission) when aggregate payments exceed the statutory threshold, with deduction at the earlier of credit or payment and anti avoidance deeming for suspense accounts. Clause 393(4) preserves a targeted exemption for certain telecom franchisee payments, maintaining continuity with existing sectoral relief and reducing compliance burdens.
    Act RulesBills
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    TDS on lottery-related payments: unified withholding on commissions and prizes with harmonized threshold and deduction rate.
    Clause 393(3)[Table: S.No. 4] consolidates TDS on payments to persons engaged in stocking, distributing, purchasing or selling lottery tickets, requiring any person making payments of commission, remuneration or prize to deduct tax at the earlier of credit or payment; it includes a deeming fiction treating credits to suspense or intermediary accounts as credit to the payee and imposes standard deductor duties of deposit, certification and return-filing, while leaving aggregation rules and characterization of complex incentive structures unclear.
    Act RulesBills
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    TDS on national savings withdrawals: mandatory deduction at source with defined threshold and exemptions for individuals and heirs.
    Clause 393(3)[Table: S.No. 6] requires any person responsible for paying amounts referred to in section 80CCA(2)(a) to deduct income-tax at the rate of 10% at the time of payment where the amount or aggregate amount paid during the tax year exceeds Rs. 2,500; the Table under sub-section (4), Sl. No. 19, exempts payments made to an assessee who is an individual and to the heirs of an assessee, and payers must deposit TDS, file returns, and issue certificates in accordance with the procedural framework.

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      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

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      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

      ActsIncome Tax