Just a moment...

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 characters0/2000
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 ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

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.
RelevanceDefaultDate
    Transformation of Tax Deduction Mechanism in respect of donations to certain funds : Clause 133 of t...
    Simplified Rent Deduction Mechanism for Non-HRA Assessees : Clause 134 of the Income Tax Bill, 2025 ...
    offer financial relief to taxpayers who incur significant medical expenses on Specified Diseases in ...
    Supportive Tax Provisions for Individuals and HUFs Caring for Disabled Dependents persons : Clause 1...
    Understanding Health Insurance Deductions : Insights from Clause 126 of the Income Tax Bill, 2025 Vs...
    Tax incentives to individuals who are enrolled in the Agnipath Scheme : Clause 125 of the Income Tax...
    Tax Incentives for Pension Contributions under NPS : Clause 124 of the Income Tax Bill, 2025 Vs. Sec...
    Statutory provision offering tax deductions through savings and investments in specified financial p...
    Comprehensive Guide to Understanding Deductions from Gross total income in Clause 122 of Income Tax ...
    Conditions for submission of returns for losses and such losses can be carried forward and set off a...
    Disallowing the set-off of losses against undisclosed income detected through searches, requisitions...
    Legal Insights into carry forward and set off of losses under the head "Capital gains" : Clause 111 ...
    Condition for carry forward and set off of losses in cases of strategic restructuring : Clause 119 o...
    Condition under which losses can be carried forward and set off against future profits : Clause 119 ...
    Treatment of losses incurred in the activity of owning and maintaining race horses : Clause 115 of I...
    Structured mechanism for treatment of losses from specified businesses in Clause 114 of the Income T...
    Understanding the Tax Treatment of Speculation Losses in Clause 113 of Income Tax Bill, 2025 Vs. Sec...
    Legal Frameworks for losses and unabsorbed depreciation Carry Forward in Co-operative Bank Mergers a...
    Strategic Disinvestment and Tax Benefits in Clause 117 of the Income Tax Bill, 2025 VS. Section 72AA...
    Analysis of Tax Provisions in Corporate Amalgamations Clause 116 of the Income Tax Bill, 2025 Vs. Se...
❯❯
MaximizeMaximizeMaximize
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 SummariesHide All Summaries
    Act RulesBills
    Show AI Summary
    Deduction for charitable donations: consolidated framework updates eligible recipients, compliance, digital reporting and anti-duplication rules.
    Clause 133 creates a consolidated deduction regime for monetary donations to specified funds and institutions, distinguishing deduction tiers, imposing an aggregate income-related cap on certain donations, prohibiting duplicate claims for the same donation, and requiring non-cash payment for larger contributions. Deduction entitlement is conditional on donee institutions furnishing prescribed information and accepting risk-based verification; definitions exclude purposes wholly or substantially of a religious nature and delegate procedural detail to subordinate legislation.
    Act RulesBills
    Show AI Summary
    Rent deduction for non-HRA assessees clarifies eligibility, computation limits, ownership exclusions and rule made procedural conditions.
    Clause 134 grants a deduction for rent paid by individuals for residential accommodation occupied as their own residence, allowable only for rent exceeding 10% of total income and capped at the lower of a prescribed monthly ceiling or 25% of total income, with percentages computed on total income before this deduction. The clause excludes assessees who own residential accommodation at the relevant place or who fall within a specified schedule entry, and authorises rule making for additional conditions and procedural requirements to enable verification and prevent double benefit.
    Act RulesBills
    Show AI Summary
    Medical expense deduction for specified diseases allows capped relief with specialist prescriptions and insurer offset.
    Clause 128 permits residents, including individuals and HUFs, to deduct out-of-pocket medical treatment expenses for specified diseases subject to prescribed monetary caps, requires prescriptions from specified medical specialists, reduces deductions by amounts reimbursed by insurers or employers, provides an increased cap for senior citizens, and defines key terms such as dependant and insurer; the clause aligns with Section 80DDB and Rule 11DD while simplifying certain documentation requirements and deferring disease enumeration to rules or notifications.
    Act RulesBills
    Show AI Summary
    Deduction for disabled dependents: proposed clause mirrors existing relief while altering exclusions and insurance conditions and documentation requirements.
    Clause 127 permits resident individuals and HUFs to deduct expenses for maintenance, medical treatment, training or rehabilitation of a dependant with a disability and contributions to qualifying insurance schemes; it prescribes standard and higher deduction limits for severe disability, conditions for scheme-based deductions (annuity or lump sum on death or at a specified age), taxability if the dependant predeceases the taxpayer, a mandatory medical certificate (with renewal where required), and an exclusion for dependants claiming relief under a separate provision.
    Act RulesBills
    Show AI Summary
    Health insurance deduction expanded to cover premiums, medical expenditure, preventive checks, and senior citizen relief.
    Clause 126 provides deductions for health insurance premia and medical expenditure for individuals and HUFs, establishes separate caps for assessees and parents, specifies an aggregate ceiling for combined insurance and medical claims, allows a sub cap for preventive health check ups, prescribes payment modes with non cash norms for most deductions, recognises enhanced relief and lump sum treatment for senior citizens, and sets definitions and insurer eligibility criteria to guide application.
    Act RulesBills
    Show AI Summary
    Deduction for Agniveer contributions enables tax relief for enrolled personnel, encouraging savings, recruitment and retention.
    A statutory deduction allows full deduction of contributions to the Agniveer Corpus Fund by individuals enrolled in the Agnipath Scheme and of corresponding Central Government contributions, with eligibility defined by enrolment and effective date; taxpayers must substantiate contributions and authorities must adapt administration and reporting to process both individual and government contributions.
    Act RulesBills
    Show AI Summary
    Pension contribution deduction: new Clause enhances employer and individual relief while clarifying withdrawal and annuity rules.
    Clause 124 establishes statutory deductions for employer and individual contributions to Central Government-notified pension schemes, prescribing differentiated employer contribution caps, an aggregate individual contribution cap applicable to both adult and minor accounts, anti-double-deduction rules, taxable treatment of withdrawals with nominee/guardian exceptions on death, annuity purchase deferral of receipt, and a defined conception of salary for limit calculations.
    Act RulesBills
    Show AI Summary
    Deduction for specified savings: new clause aligns tax incentives with existing framework while preserving compliance conditions.
    Clause 123 grants deductions to individuals and HUFs for payments in a tax year towards life insurance premia, deferred annuities, provident fund contributions and other specified investments listed in Schedule XV, subject to a maximum deduction of INR 1,50,000 and to conditions set out in Schedule XV; it aligns with Section 80C's policy of incentivising long term savings while differing in the specific catalogue of eligible investments and the detailed conditions governing deductibility.
    Act RulesBills
    Show AI Summary
    Deductions from Gross Total Income now constrained by non-duplication and market-value rules, tightening tax compliance obligations.
    Clause 122 governs deductions from gross total income by capping aggregate deductions at gross total income, prohibiting duplication of deductions between entity and member levels, restricting multiple claims under different provisions, conditioning deductions on timely filing and claiming in the return, and requiring inter-business transfers to be recorded at market value; it also defines gross total income for deduction purposes.
    Act RulesBills
    Show AI Summary
    Filing requirement for loss carryforward: procedural return submission determines eligibility to set off future taxable income.
    Only losses determined pursuant to a return filed under the prescribed statutory procedure qualify for carry forward and set off; Clause 121 conditions eligibility on a return filed under Section 263(1) while Section 80 conditions it on a return filed under Section 139(3), each referencing the statutory provisions that define eligible loss categories and thereby tying substantive loss recognition to procedural compliance.
    Act RulesBills
    Show AI Summary
    Disallowing set off of losses against undisclosed income prevents offset after tax searches, requisitions, or surveys.
    Clause 120 of the Income Tax Bill, 2025 disallows any loss, whether carried forward or otherwise, and any unabsorbed depreciation from being set off against undisclosed income included in total income where such income is detected as a consequence of a search, requisition, or survey; the clause is expressly overriding and depends on the Bill's definition of undisclosed income for its scope.
    Act RulesBills
    Show AI Summary
    Carry forward of capital losses: long-term losses limited to long-term gains; short-term losses may be set off under new Bill.
    Clause 111 and Section 74 permit carry forward and set off of unabsorbed capital losses, distinguishing long-term losses (set off only against long-term capital gains) from short-term losses (set off against any capital gains), and both limit carry forward to an eight-year period measured from the year the loss was computed; Clause 111 uses the term "tax year" and cross-references related provisions in the new Bill while Section 74 refers to "assessment year."
    Act RulesBills
    Show AI Summary
    Carry-forward restrictions on losses after ownership or constitution changes limit tax benefits from strategic restructuring.
    Clause 119 restricts carry forward and set off of losses after changes in firm constitution, business succession by non-inheritance successors, and corporate shareholding changes unless continuity of beneficial voting power is maintained. It permits an exception for start-ups where all original shareholders retain their shares and losses occurred within the first ten years, and enumerates exceptions (death, gifts to relatives, specified amalgamations/demergers, approved insolvency resolution plans) while defining terms relevant for application.
    Act RulesBills
    Show AI Summary
    Loss carryforward restrictions: ownership or constitution changes can bar set-off unless continuity conditions and specified exceptions apply.
    Clause 119 conditions the permissibility of carrying forward and setting off past losses where ownership or constitution changes occur: it denies set-off for losses attributable to retired or deceased partners upon firm reconstitution, disallows successors (other than by inheritance) from using predecessor losses, and restricts non-public companies from setting off prior losses after shareholding changes unless continuity conditions including original beneficial owner control or start-up safeguards are met; specified exceptions and ongoing compliance requirements are provided.
    Act RulesBills
    Show AI Summary
    Ring fenced treatment of racehorse losses restricts cross setoff and permits carry forward only within the same activity.
    Clause 115 creates a ring fenced regime: losses from the specified activity of owning and maintaining race horses cannot be set off against other income; unabsorbed losses may be carried forward and set off only against income from the same activity, subject to continuation of the activity and defined temporal limits and eligibility definitions.
    Act RulesBills
    Show AI Summary
    Restriction on loss set-off: specified business losses may be offset only against profits of other specified businesses.
    Losses from a specified business are restricted to set-off only against profits of other specified businesses in the same year; unabsorbed losses may be carried forward and set off exclusively against profits of specified businesses in subsequent years. The provision relies on defined terms for "specified business" and "unabsorbed loss," confines tax incentives to their intended category to prevent cross-business erosion of the tax base, and requires segregated record-keeping to ensure compliance.
    Act RulesBills
    Show AI Summary
    Set-off of speculation losses confined to speculation profits; carry forward limited and prioritised before other allowances.
    Clause 113 confines adjustment of losses from a speculation business to profits of another speculation business in the same year; permits carry forward of unabsorbed speculation losses to subsequent years for set off only against speculation business profits within a limited statutory period; requires that unabsorbed speculation losses be set off before certain carried forward allowances; and defines both speculation business (including a deeming rule for share trading to that extent) and specified exceptions to that classification.
    Act RulesBills
    Show AI Summary
    Carry forward and set off of losses preserved for successor co operative banks, subject to specified conditions and penalties.
    Successor co operative banks may set off predecessor accumulated business losses and unabsorbed depreciation in amalgamations as if the amalgamation had not occurred; in demergers directly related tax attributes transfer wholly to the resulting bank while non relatable attributes are apportioned by asset distribution. Application requires continuity of banking business, retention and use of fixed assets, and genuine continuation of operations; failure to meet conditions renders previously allowed set offs taxable in the year of non compliance. Clause 118 adds a Central Government power to prescribe further conditions to ensure genuine business purposes.
    Act RulesBills
    Show AI Summary
    Treatment of accumulated losses and unabsorbed depreciation: successor may utilise predecessor tax attributes subject to a limited carry forward period.
    Clause 117 deems accumulated loss and unabsorbed depreciation of specified predecessor entities to be those of the amalgamated entity when amalgamations involve banking companies, corresponding new banks, or government companies under Central Government sanctioned schemes, including cases following strategic disinvestment; successor entities may utilize these tax attributes in the year of amalgamation but are subject to a limited carry forward period and prescribed compliance and reporting requirements.
    Act RulesBills
    Show AI Summary
    Treatment of accumulated losses and unabsorbed depreciation allows continuity on corporate reorganisations subject to compliance conditions.
    Clause 116 permits continuity of accumulated loss and unabsorbed depreciation on amalgamation, demerger and related reorganisations by deeming the transferor's tax attributes to be those of the transferee or successor, subject to conditions such as asset retention and business continuity. It limits transfers in strategic disinvestment to amounts existing when public sector status ceased, allocates losses in demergers according to transferred undertakings or retained assets, extends treatment to successor entities including LLPs, and empowers the Central Government to prescribe conditions; non compliance attracts tax liabilities for successor entities.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Comparison of section 261 "Interpretation." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      9 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 261 Interpretation.

      Income-tax Act, 2025

      At a Glance

      Clause 261 of the Income Tax Bill, 2025 (Old Version) sets out definitions used in the Chapter dealing with powers relating to search, seizure and requisition. It matters because definitional scaffolding determines the scope of search-and-seizure powers and the evidentiary status of electronic material; affected parties include taxpayers, authorised officers, and the Department. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: Clause 261 sits in Chapter XIV (as the note indicates) of the Income Tax Bill, 2025. It supplies definitions of expressions used for the purposes of the Chapter that regulates powers (search, requisition and related procedural mechanisms). The clause lists definitional meanings for "approving authority," "asset," "authorised officer," "competent authority," "computer system," "date on which the last of the authorisations for search was executed," "material seized," "proceeding" and "virtual digital space." The text provides definitions but no express legislative history or policy rationale. Any statutory cross-references explicitly stated are to section 247 and section 248 (for search and requisition), and to the Income-tax Act, 1961 in the "proceeding" definition.

      Statutory Provision Mode

      Text & Scope

      The clause defines the following core terms:

      • Approving authority: enumerates senior posts (Principal Director General/Director General; Principal Chief Commissioner/Chief Commissioner; Principal Director/Director; Principal Commissioner/Commissioner).
      • Asset: defined as "any money, bullion, jewellery or other valuable article or thing, held in physical or virtual form." This is a broad property-oriented definition, purposely not limiting to corporeal assets.
      • Authorised officer: ranges from Joint Director/Additional Director through to Income-tax Officer/Tax Recovery Officer; this specifies the class of officers empowered under the Chapter.
      • Competent authority: similar enumeration to approving authority but broader, including Joint Director/Additional Director and Joint Commissioner/Additional Commissioner.
      • Computer system: broad language: "computers, computer systems, computer networks, computer resources, communication devices, digital or electronic data storage devices" whether stand-alone or networked, including remote server, cloud server or virtual digital space; describes both modes of use and examples of included infrastructure.
      • Date on which the last of the authorisations for search was executed: two alternatives:
        • (i) in the case of search, the date of conclusion as recorded in the last panchnama drawn for persons covered by a warrant;
        • (ii) in case of requisition u/s 248, the date of actual receipt of books, documents or assets by the requisitioning officer.
      • Material seized: defined expansively to include books of account, other documents, digital data storage devices, computer systems and extracts seized during searches u/s 247 or requisition u/s 248; explicitly mentions backups from specialised programmes and electronic records (tally, excel, word files) and says such material "shall be construed to mean as book of accounts maintained by the said person."
      • Proceeding: covers any proceeding in respect of any year whether under the Income-tax Act, 1961 or under this Act that may be pending on the date of authorisation of a search/requisition or completed on or before such date, and includes proceedings which may be commenced after such date.
      • Virtual digital space: defined as an environment created via computer technology, including email servers, social media accounts, online investment/trading/banking accounts, websites storing ownership details, remote/cloud servers, application platforms and similar spaces.

      Interpretation

      The clause evinces an interpretive approach that is expansive and technology-aware. "Asset" as "physical or virtual" and the separate definition of "virtual digital space" show intent to capture non-physical forms of value. The "computer system" definition emphasises functional coverage - whether standalone or networked - and expressly includes cloud and remote servers. The "material seized" provision equates seized electronic records/backups with books of account, indicating legislative intent to treat digital evidence on parity with traditional account books for purposes of assessment and proceedings. The "proceeding" definition adopts a temporal sweep, covering past, pending and future proceedings tied to the date of search/requisition.

      Exceptions/Provisos

      Not stated in the document.

      Illustrations

      • If during a search (authorised u/s 247), an authorised officer seizes a company's cloud-hosted accounting backup, that backup would fall within "material seized" and be treated as books of account maintained by the company (consistent with the definition).
      • If a requisitioning officer u/s 248 takes physical custody of a server containing transaction logs on a stated date, the "date on which the last of the authorisations for search was executed" (for purposes of related provisions) would be the date of actual receipt of that server (as "assets").
      • An online trading account held on a digital application platform falls within "virtual digital space" and accordingly may be captured by definitions of assets or material when relevant to a search/requisition.

      Interplay

      The clause expressly references sections 247 and 248 as the operative powers under which material may be seized or requisitioned. It cross-links to the Income-tax Act, 1961 in defining "proceeding." The provision states that electronic backups and specialised programme data are to be treated as books of account for purposes of the Chapter; this creates an internal evidentiary linkage between digital material and statutory accounting records. No explicit references to rules, notifications or circulars are contained in the text.

      Differences between the two provisions and practical impact

      • Terminology - "asset" includes "virtual digital asset": The Act (Document 1) expressly expands the definition of "asset" to include "virtual digital asset"; the Bill (Document 2) refers to "asset" as "any money, bullion, jewellery or other valuable article or thing, held in physical or virtual form" and does not explicitly use the phrase "virtual digital asset."
        • Practical impact: the Act's explicit inclusion of "virtual digital asset" clarifies legislative intent to capture cryptocurrencies and similar instruments; the Bill's broader but less explicit phrasing may leave room for interpretive disputes about whether specific crypto instruments fall within "virtual digital asset" or merely "virtual form" of an asset.
      • Scope of "material seized" vs "material seized or requisitioned": The Bill (Document 2) uses the heading "material seized" and describes items seized during search or requisition; the Act (Document 1) uses "material seized or requisitioned" as the term and expressly includes "computer systems" in the list and states that such material "shall be construed to mean as books of accounts maintained by the said person."
        • Practical impact: the Act clarifies that requisitioned material is explicitly included and equates seized electronic material to books of accounts, potentially broadening evidentiary reach and supporting treatment of electronic extracts as formal books; the Bill's framing is marginally narrower or less explicit on that declaratory equivalence.
      • Inclusion of "electronic form" and "electronic record" cross-references: The Act (Document 1) contains specific sub-clauses (g) and (h) that adopt terms from the Information Technology Act, 2000; the Bill (Document 2) does not include corresponding sub-clauses labelled (g) and (h) for those exact cross-references (in the Bill numbering, (g) is used for "material seized" and (h) for "proceeding").
        • Practical impact: the Act's explicit cross-references to the IT Act clarify that statutory notions of electronic documents and records are to be read consistently with established definitions; the Bill is less explicit about adopting those statutory definitions, possibly creating interpretive friction as to whether IT Act definitions are imported.
      • "Proceeding" definition present in the Bill but absent in the Act text provided: The Bill includes a definition of "proceeding" (Document 2, clause (h)) describing what proceedings are covered (including references to the Income-tax Act, 1961 and proceedings pending or completed on the date of search/requisition). The Act excerpt (Document 1) as provided does not contain that "proceeding" definition.
        • Practical impact: retention of an express "proceeding" definition in the Bill would have clarified temporal and substantive reach of actions triggered by searches/requisitions; its absence from the Act extract may mean either omission in the Act or that it is located elsewhere-if absent, scope of covered proceedings may be less explicitly delimited, creating uncertainty over retrospective or prospective application to earlier or later proceedings.
      • Computer system / computer resources phrasing: Both texts define "computer system" broadly, but the Bill starts with "computers, computer systems" and the Act begins with "computers, computer networks," etc. The Act explicitly repeats "computer resources, communication devices, digital or electronic data storage devices" and again includes "virtual digital space."
        • Practical impact: differences are largely stylistic; both convey a broad technological reach. The Act's inclusion of "virtual digital space" in the computer system clause and as a separate defined term strengthens the capture of cloud and online environments.
      • Requisition wording in definition of the date on which last authorisation was executed: The Bill's clause (f)(ii) refers to "actual receipt of the books of account or other documents or assets by the requisitioning officer"; the Act's clause (f)(ii) expands that to "books of account or other documents or computer system or assets."
        • Practical impact: the Act's explicit inclusion of "computer system" in what may be requisitioned tightens the statutory basis for claiming a requisitioned server or digital environment was effectively taken on a given date; the Bill might have been read to focus more on physical assets or documents.

      Practical Implications

      • Compliance and risk areas: Taxpayers with digital records or holdings in virtual spaces should expect those records to be treated as books of account when seized or requisitioned. The broad definition of "computer system" and "virtual digital space" increases the Department's practical reach into cloud servers, social media accounts and online financial platforms during investigations.
      • Record-keeping/evidence points: Entities should maintain clear, verifiable backups and audit trails for accounting software, spreadsheets and electronic records since the statute singles out backups from specialised programmes. Documentation that demonstrates provenance and linkage between digital files and formal accounts will be relevant where seized material is used as books of account.

      Key Takeaways

      • Clause 261 supplies a broad, technology-inclusive set of definitions to govern search, seizure and requisition powers in the Chapter.
      • "Material seized" explicitly includes digital backups and computer systems and is to be construed as books of account, elevating electronic records to evidentiary parity with traditional accounting records.
      • "Virtual digital space" is comprehensively defined to include email servers, social media, online investment/trading/banking accounts, websites holding ownership details, remote/cloud servers and application platforms.
      • "Proceeding" is defined to cover proceedings under the Income-tax Act, 1961 and the new Act, including pending, completed or subsequent proceedings linked to the date of search/requisition.
      • The clause casts a wide net over digital environments and assets, signalling administrative emphasis on accessing electronic data during tax investigations.

      Full Text:

      Section 261 Interpretation.

      Topics

      ActsIncome Tax