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
    Act Rules Income Tax
    Comparison of Section 21 "Determination of annual value" between the Income-Tax Act, 2025 (as passed...
    Act Rules Income Tax
    Comparison of Section 19 "Deductions from salaries" between the Income-Tax Act, 2025 (as passed) and...
    Act Rules Income Tax
    Comparison of Section 17 "Perquisite" between the Income-Tax Act, 2025 (as passed) and the Income-Ta...
    Act Rules Income Tax
    Comparison of Section 11 "Incomes not included in total income" between the Income-Tax Act, 2025 (as...
    Act Rules Income Tax
    Comparison of Section 9 "Income deemed to accrue or arise in India" between the Income-Tax Act, 2025...
    Act Rules Income Tax
    Comparison of Section 8 "Income on receipt of capital asset or stock-in-trade by specified person" b...
    Act Rules Income Tax
    Comparison of Section 6 "Residence in India" between the Income-Tax Act, 2025 (as passed) and the In...
    Act Rules Income Tax
    Comparison of Section 5 "Scope of total income" between the Income-Tax Act, 2025 (as passed) and the...
    Act Rules Income Tax
    Comparison of Section 4 “BASIS OF CHARGE” between the Income‑Tax Act, 2025 (as passe...
    Act Rules Income Tax
    Comparison of Section 2(105) "Stamp duty value" between the Income‑Tax Act, 2025 (as pas...
    Act Rules Income Tax
    Comparison of Section 2(101) "short-term capital asset" between the Income‑Tax Act, 2025...
    Act Rules Income Tax
    Comparison of Section 2(29) "Company in which the public are substantially interested" between...
    Act Rules Income Tax
    Comparison of Section 2(28) "Company" between the Income-Tax Act, 2025 (as passed) and the Income-Ta...
    Act Rules Income Tax
    Comparison of Section 2(22) "Capital Assets" between the Income-Tax Act, 2025 (as passed) and the In...
    Case Laws Income Tax
    Remuneration and interest received by an individual partner from a partnership firm can be subjected...
    Case Laws Income Tax
    Judicial Recall and Tax Implications in Trust Settlements: Using AI-generated citations without prop...
    Case Laws Income Tax
    Corporate Mergers and Tax Assessment: Navigating Legal Entity Changes and rectification u/s 292B
    Case Laws Income Tax
    Reconciling Procedural Timelines with Limitation Periods in Income Tax Reassessments
    Case Laws Income Tax
    Condoning Delay in Filing Income Tax Return: A Case for Equitable Consideration
    Case Laws Income Tax
    Disallowance u/s 14A: Navigating the Interplay of Exempt Income and Expenditure
❮
❯
❯❯
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
Act Rules Income Tax
Show AI Summary
Determination of annual value: higher of expected or actual rent, with narrowed vacancy test and specific exemptions.
Annual value is the higher of expected rent or actual rent received/receivable where let; the enacted text narrows vacancy relief by requiring that vacancy-related reduction make actual rent lower than the notional expected rent before annual value is fixed at actual receipts. Local taxes actually paid reduce annual value, unrealised rent is excluded subject to rules, stock-in-trade newly completed and not let enjoys two years nil annual value upon completion certificate, and owner-occupation yields nil annual value for up to two specified houses unless let or other benefits are derived.
Act Rules Income Tax
Show AI Summary
Deductions from salaries: defined categories, formulaic computation and aggregation limits govern tax relief eligibility.
Section 19 itemises fourteen categories of salary related receipts that are deductible or exempt and prescribes formulas, ceilings and conditions for each. Relief for gratuity, leave encashment, pension commutation, retrenchment and voluntary retirement is computed by statutory formulas or by reference to notified limits and other enactments; an aggregation rule limits cumulative exemption where multiple receipts occur. The provision depends on cross references to other statutes and notifications, requiring classification, documentary evidence and tracing of prior exemptions to determine allowable deductions.
Act Rules Income Tax
Show AI Summary
Perquisite taxation: employer-provided benefits and securities treated as taxable salary components, with limited exclusions and prescribed valuation.
Section 17 defines perquisite for salary taxation by listing employer-provided benefits treated as perquisites-including accommodation, employer-paid obligations, securities and sweat equity allotted or transferred at concessional rates, employer-paid insurance premiums and excess retirement contributions-while excluding certain employer-funded medical treatment, approved insurance arrangements, commuting vehicle expenditure and conditional foreign medical/travel payments; valuation methods and thresholds are delegated to subordinate rules and cross-references link perquisite treatment to existing constructs for gross total income and approved fund schemes.
Act Rules Income Tax
Show AI Summary
Conditional exclusion from total income: schedule-based incomes and persons excluded if conditions met; otherwise included in tax base.
A conditional exclusion regime provides that incomes in Schedules II-VI and persons in Schedule VII are excluded from total income only if schedule conditions are satisfied; failure to satisfy conditions results in inclusion of such income in total income and taxation for the relevant tax year, and the Central Government is empowered to make rules or notifications to operationalise those schedules.
Act Rules Income Tax
Show AI Summary
Significant economic presence expands source taxation, bringing digital interactions and remote services within the domestic tax net.
Section 9 sets an expansive source taxation rule deeming income to accrue or arise domestically where linked to domestic assets, a business connection (including agents), transfers of capital assets situated domestically, salary earned or payable for services linked to domestic performance, dividends of domestic companies, interest subject to exceptions (including separate taxation of interest of an Indian permanent establishment of a foreign bank), and royalty and technical fees; it introduces significant economic presence tests for digital/user-based connections and leaves key thresholds and valuation mechanics to subordinate rules.
Act Rules Income Tax
Show AI Summary
Deemed transfer of distributed assets treated as taxable at entity level; fair market value sets consideration and guidelines now open-ended.
Section 8 treats receipt by a partner or member of capital assets or stock-in-trade from a non-company specified entity on dissolution or reconstitution as a deemed transfer by the entity, with profits or gains taxed at the entity level and the full value of consideration deemed to be the fair market value on the date of receipt; the Board may issue guidelines with prior Central Government approval and parliamentary laying, and the enacted text removes the Bill's two-year sunset on that guideline-making power.
Act Rules Income Tax
Show AI Summary
Residence in India: income-linked deeming now captures high-income returning citizens visiting short-term, and POEM defines company residence.
Section 6 prescribes residence tests combining day-count rules (182-day and 60/365 tests), categorical exceptions for ship crew and visiting citizens/PIOs, an income-linked modification that extends the shorter day-count threshold for higher-income returning citizens, a deeming rule capturing citizens not taxable elsewhere, company residence via Indian status or Place of Effective Management, and a deeming provision that applies residence across all income sources; As Passed drafting clarifies interplay between the visiting exception and income-based modification and contains minor typographical refinements.
Act Rules Income Tax
Show AI Summary
Scope of total income: residents taxed broadly with limited foreign income inclusion for not ordinarily resident persons.
Section 5 sets the scope of total income by applying receipt and accrual tests: residents are taxed on income received or deemed received in India, income accruing or arising or deemed to accrue or arise in India, and foreign income only in limited cases for a person who is not ordinarily resident (foreign income included when derived from a business controlled in India or a profession set up in India). Non residents are taxed on income received or deemed received in India and income accruing or arising or deemed to accrue or arise in India. The section also prevents balance sheet inclusion from constituting receipt and bars double inclusion on accrual and receipt bases.
Act Rules Income Tax
Show AI Summary
Charge of income-tax: linkage to central rates and application to total income, with withholding and advance payment obligations.
Section 4 links the charge of income-tax to rates enacted by a Central Act, charges income-tax on the total income of the tax year of every person (while allowing charging for other specified periods), includes any additional income-tax by whatever name, and requires deduction/collection at source and advance payment for income chargeable under the section.
Act Rules Income Tax
Show AI Summary
Stamp duty value treated as a notional benchmark for tax valuations, overriding conflicting valuation laws for tax purposes.
Section 2(105) defines stamp duty value as the value adopted, assessed or assessable by a Central or State authority for stamp duty on immovable property, where "assessable" is expressly a notional value the authority would have adopted if referred the matter, and that definition applies irrespective of anything to the contrary in any other law in force.
Act Rules Income Tax
Show AI Summary
Holding-period tiers determine capital gain classification with a shorter threshold for listed securities and specific fund units.
Definition of short-term capital asset establishes a two-tier holding-period regime for capital gains classification, retaining a general holding-period test and a shorter test for listed securities, units of the Unit Trust of India, units of equity-oriented funds and zero-coupon bonds; detailed rules determine inclusion, exclusion and commencement of holding periods on liquidation, corporate reorganisations, conversions, allotments, renunciations, free allotments and GDR redemptions, with certain technical matters deferred to prescribed rules.
Act Rules Income Tax
Show AI Summary
Definition of company in which the public are substantially interested: drafting variance may create conjunctive interpretation risk affecting tax classification.
Clause 2 supplies a comprehensive glossary for the Income-tax Act, 2025, defining terms such as company, capital asset, income and virtual digital asset, often with cross-references, provisos and delegated prescriptions; clause 2(29)'s categories for a company in which the public are substantially interested are materially consistent between Bill and Act, but the Bill's connector wording risked a conjunctive reading of alternative tests that the Act's later disjunctive phrasing rectifies, creating interpretive consequences for tax classification and related compliance.
Act Rules Income Tax
Show AI Summary
Definition of company clarified; temporal qualification in transitional limb may narrow which historic entities remain within tax scope.
Section 2 supplies statutory definitions that determine tax coverage. The definition of company comprises Indian companies, foreign bodies corporate, entities assessable as companies under the repealed Act, and Board declared entities. The Bill adds a temporal qualification limiting entities assessed under the prior Act to particular assessment years; the Act text omits this qualification. Scattered drafting and cross reference differences exist. Operational consequences hinge on threshold facts (shareholding, listing, assessment history, population/distance tests) and on unstated transitional provisions.
Act Rules Income Tax
Show AI Summary
Capital asset definition updated to include IFSC-regulated funds and broaden unit-linked policies, affecting capital gains treatment.
The Act retains an inclusive definition of capital asset with exceptions for stock-in-trade, specified personal effects and certain agricultural land, while refining the securities limb to expressly include securities held by FIIs and investment funds regulated under SEBI or IFSC regimes and removing a temporal issuance-date qualifier for unit-linked insurance policies, thereby broadening the category of policies treated as capital assets; numerous drafting and cross-reference clarifications aim to reduce interpretive uncertainty.
Case Laws Income Tax
Show AI Summary
Presumptive taxation: partner remuneration and interest cannot be treated as individual business turnover for presumptive tax purposes.
Section 44AD applies only where the assessee carries on an eligible business and has actual turnover or gross receipts attributable to that assessee. Remuneration and interest paid by a partnership firm to a partner arise from the firm's accounts and partnership agreement; although Section 28(v) taxes such receipts in the hands of the partner, that deeming does not convert them into the partner's turnover or gross receipts for Section 44AD. Section 40(b) governs firm deductibility but does not create an independent business activity in the partner; hence such receipts cannot be subjected to Section 44AD presumptive taxation.
Case Laws Income Tax
Show AI Summary
Trust settlement taxation: broadened construction of shares and securities may capture partnership interests, prompting citation verification.
The tribunal examined whether a trust permitting benefits beyond relatives falls within Section 56(2)(x), construed "shares and securities" to broaden taxable scope, and treated partnership interests as property under the provision. The earlier order was recalled after reliance on non-existent citations, highlighting the need for rigorous verification of precedents and research safeguards in trust taxation matters.
Case Laws Income Tax
Show AI Summary
Rectification of assessment orders cannot cure jurisdictional errors where orders name non-existent entities after mergers.
An assessment order issued in the name of a non-existent entity after a disclosed corporate amalgamation was held to be a fundamental, jurisdictional error not correctable under Section 154 or Section 292B; prior disclosure of the merger and absence of misleading conduct distinguished the case from precedents permitting clerical correction.
Case Laws Income Tax
Show AI Summary
Limitation periods: reassessment procedures must be completed within the overarching statutory period, else notices are time-barred.
The decision construes the interaction between procedural timelines for reassessment and the overarching limitation period, treating the mandatory pre-notice procedure requiring provision of material and an opportunity to respond as part of the reassessment process that must be completed within the ultimate limitation period; if the authority does not complete both the procedural order and issue the reassessment notice within the residual time remaining after statutory exclusions and extensions, the notice is time-barred.
Case Laws Income Tax
Show AI Summary
Condonation of delay: equitable consideration where bona fide technical failures and professional disruptions impede tax filing.
Condonation of short delays in filing income tax returns must be governed by principles of equity and fairness, with bona fide explanations such as portal technical failures and unforeseeable disruptions at a chartered accountant's premises meriting empathetic, case sensitive assessment rather than mechanical rejection. Where assessees rely on professional intermediaries, corroborative evidence of genuine operational impediments is a relevant consideration in exercising discretionary condonation to facilitate compliance objectives.
Case Laws Income Tax
Show AI Summary
Disallowance of expenditure related to exempt income: apportionment required and actual exempt income is a prerequisite.
Disallowance of expenditure relating to exempt income requires identification and apportionment of expenses attributable to non taxable receipts; only expenditure expended to earn taxable income may be claimed. Courts interpret "in relation to" expansively and reject reliance on the spender's dominant purpose. The existence of actual exempt income is necessary to invoke the disallowance rule, and post enactment explanatory amendments that alter prior law are not retrospective.

TMI Notes

Back

All TMI Notes

Showing Results for :
Reset Filters
No Records Found

TMI Notes

Back

All TMI Notes

Comparison of Section 156 "Rebate of income-tax in case of certain individuals." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

3 September, 2025

Contents
Acts
Rules & Regulations
Summary
Note

Note

-

Bookmark

Print

Print

Section 156 Rebate of income-tax in case of certain individuals.

Income-tax Act, 2025

At a Glance

Clause 156 of the Income Tax Bill, 2025 - (Old Version) provides for a rebate/deduction from income-tax for certain resident individuals based on total income thresholds of Rs. 5,00,000 and Rs. 12,00,000, with monetary caps of Rs. 12,500 and Rs. 60,000 respectively. It affects resident individual taxpayers and the tax department's computation of tax liability. Effective date: Not stated in the document.

Background & Scope

Statutory hook: Clause 156 of the Income Tax Bill, 2025 (Rebate of income-tax in case of certain individuals). The provision is situated under the Bill's rubric "Rebates and reliefs." The clause aims to provide a deduction from income-tax payable for resident individual assessees whose total income falls below specified thresholds. The clause refers to computation "before allowing the deduction under this section" and to tax charged u/s 202(1). Definitions of "resident," "total income," or "income-tax payable" are Not stated in the document (they are presumed to be defined elsewhere in the Bill/Act). The clause contains three sub-sections setting out the conditions and caps for the deduction.

Statutory Provision Mode

Text & Scope

Clause 156 provides as follows (material elements synthesized):

  • Sub-section (1): A resident individual assessee whose total income does not exceed Rs. 5,00,000 is entitled to a deduction from income-tax (computed before this deduction) equal to 100% of income-tax payable or Rs. 12,500, whichever is less.
  • Sub-section (2): Where a resident individual's total income is chargeable to tax u/s 202(1), deductions from income-tax (computed before this deduction) are allowed as follows: (a) if total income does not exceed Rs. 12,00,000, then 100% of income-tax payable or Rs. 60,000, whichever is less; (b) if income exceeds Rs. 12,00,000, then "the income-tax payable on the total income, reduced by total income which is in excess of twelve lakh rupees."
  • Sub-section (3): The deduction under sub-section (2) shall not exceed income-tax payable as per the rates provided in section 202(1).

Scope: The relief is available only to resident individual assessees and is expressed as a deduction from income-tax chargeable on total income; it expressly contemplates interaction with section 202(1) tax computation.

Interpretation

The clause frames the relief as a deduction from the tax liability (not from gross income). The use of caps (Rs. 12,500 and Rs. 60,000) establishes fixed monetary ceilings. Sub-section (2) differentiates treatment depending on whether total income crosses the Rs. 12,00,000 threshold. The reference to tax computed "before allowing the deduction under this section" clarifies the order of computation: tax is calculated first, then the rebate/deduction is applied up to the stated limits. The provision's language in clause (2)(b) is formulaic and requires arithmetic reduction of tax payable by the excess of income over Rs. 12,00,000.

Exceptions/Provisos

No express provisos beyond the numerical thresholds and caps are provided. There is no textual carve-out for non-residents, non-individuals, or particular categories of income; however, the clause is expressly limited to "resident individual assessee." Any other exceptions or exclusions are Not stated in the document.

Illustrations

  • Example 1: Total income = Rs. 4,50,000; income-tax computed before rebate = Rs. 10,000. Under sub-section (1), deduction = 100% of tax payable (Rs. 10,000) or Rs. 12,500 whichever is less; deduction = Rs. 10,000; net tax = nil.
  • Example 2: Total income = Rs. 11,00,000; income-tax computed before rebate (u/s 202(1)) = Rs. 50,000. Under sub-section (2)(a) deduction = 100% of tax payable or Rs. 60,000 whichever is less; deduction = Rs. 50,000; net tax = nil.
  • Example 3: Total income = Rs. 13,00,000; income-tax computed before rebate = Rs. 80,000. Under sub-section (2)(b) deduction = income-tax payable reduced by the excess over Rs. 12,00,000 (i.e., 80,000 minus 1,00,000) per the Bill's formula. Because that arithmetic would produce a negative number (-Rs. 20,000), the limitation in sub-section (3) and general interpretive principle that deduction cannot be negative means the deduction would effectively be nil; the text states the deduction "shall not exceed income-tax payable" but does not expressly address negative results - consequentially, a reasonable administrative interpretation would yield nil deduction. (Note: precise administrative treatment is Not stated in the document.)

Interplay

The clause explicitly interacts with section 202(1) - the rebate in sub-section (2) applies where total income is chargeable to tax under that section and sub-section (3) caps deductions to the tax payable "as per the rates provided in section 202(1)." References to other Rules, Notifications, or Circulars are Not stated in the document. The Bill does not provide procedural rules for claiming the deduction, nor does it reference forms or assessment mechanics; those matters are Not stated in the document.

Differences between Section 156 of the Income-tax Act, 2025 and Clause 156 of the Income Tax Bill, 2025 - (Old Version)

  • Textual framing of subsection (1): The Bill (old version) uses the phrasing "A resident individual assessee" while the enacted Section uses "An assesse, being an individual resident in India."
    • Practical impact: purely stylistic; no substantive change to coverage (resident individual assessees remain the class eligible).
  • Subsection (2)(b) - Formulation and clarity of the deduction for incomes above Rs. 12 lakh: The Bill (old version) states: "the income exceeds twelve lakh rupees, the income-tax payable on the total income, reduced by total income which is in excess of twelve lakh rupees." The enacted Section states the condition more elaborately: "the total income exceeds twelve lakh rupees and the income-tax payable on such total income exceeds the amount by which the total income is in excess of twelve lakh rupees, an amount equal to the amount by which the income-tax payable on such total income is in excess of the amount by which the total income exceeds twelve lakh rupees."
    • Practical impact: The Bill's wording appears to direct a mechanical reduction of "income-tax payable" by the amount of income in excess of Rs. 12 lakh (a mismatch of units and likely leading to ambiguity/anomalous results). The enacted Section sets a conditional test and then grants a deduction equal to the excess of the tax payable over the excess income-thus the enacted text is clearer and avoids unit-mismatch confusion. In practice, the enacted text limits and clarifies the quantum of rebate available for higher incomes; the Bill's formulation could have produced interpretive and computational difficulties, possibly producing an unintended (and unworkable) formula.
  • Overall clarity and drafting precision: The enacted Section contains more precise conditional language in sub-section (2)(b).
    • Practical impact: reduced ambiguity for assessing officers, taxpayers and tax practitioners when computing the rebate for incomes exceeding Rs. 12 lakh; lowers litigation risk over interpretation of the mathematical reduction contemplated.
  • Subsection (3): Both texts contain identical limiting language that deduction under sub-section (2) shall not exceed income-tax payable as per rates in section 202(1).
    • Practical impact: none; both prohibit the rebate exceeding tax payable under the cited rate provision.

Practical Implications

  • Compliance and risk areas: Taxpayers must determine whether total income is within the specified thresholds and whether tax is chargeable u/s 202(1) to ascertain entitlement. The formula in clause (2)(b) can produce ambiguity where the excess of income over Rs. 12,00,000 equals or exceeds tax payable; the provision's terse phrasing in the Bill may give rise to interpretive disputes as to whether any deduction is permissible in those cases. The Bill text does not state dispute-resolution or administrative guidance; therefore taxpayers and the department may require clarificatory instructions (Not stated in the document).
  • Record-keeping/evidence: The document does not specify documentation or forms required to claim the deduction. Presumably, computation records showing total income and tax computed before the deduction would be relevant; the document itself is Not stated on record keeping.

Key Takeaways

  • Clause 156 provides a tax rebate (deduction from tax payable) for resident individual assessees with total income thresholds at Rs. 5,00,000 and Rs. 12,00,000.
  • Caps are specified: Rs. 12,500 for incomes up to Rs. 5,00,000; Rs. 60,000 for incomes up to Rs. 12,00,000.
  • For incomes above Rs. 12,00,000, the Bill prescribes a formula reducing tax payable by the excess of income over Rs. 12,00,000; the clause's terse wording may generate interpretive issues when the excess equals or exceeds tax payable.
  • The deduction is expressly subject to not exceeding tax payable u/s 202(1); other procedural and definitional matters are Not stated in the document.
  • Practical application requires careful arithmetic and may necessitate clarificatory guidance from the tax authorities to resolve edge cases arising under clause (2)(b).

Full Text:

Section 156 Rebate of income-tax in case of certain individuals.

Topics

Acts Income Tax