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
    Refund of IGST - Export of goods - only because the exporter had claimed drawback @ 1% in regard to ...
    Time limit for availing Input Tax Credit (ITC) - whether GSTR-3B is a return u/s 39(1) of Central GS...
    NewsBills
    Rates for deduction of income-tax at source from “Salaries”, computation of “advance tax” an...
    NewsBills
    Rate of Tax for TDS / Advance Tax -  Individual, Hindu undivided family, association of persons, bo...
    NewsBills
    Rate of Tax for TDS / Advance Tax -  Co-operative Societies
    NewsBills
    Rate of Tax for TDS / Advance Tax -  Firms
    NewsBills
    Rate of Tax for TDS / Advance Tax -  Local authorities
    NewsBills
    Rate of Tax for TDS / Advance Tax -  Companies
    NewsBills
    WIDENING AND DEEPENDING OF TAX BASE - Tax Deduction at Source (TDS) on payment by Individual/HUF to ...
    NewsBills
    TDS at the time of purchase of immovable property
    NewsBills
    Deemed accrual of gift made to a person outside India
    NewsBills
    Mandatory furnishing of return of income by certain persons
    NewsBills
    Inter-changeability of PAN & Aadhaar and mandatory quoting in prescribed transactions.
    NewsBills
    Consequence of not linking PAN with Aadhaar
    NewsBills
    Widening the scope of Statement of Financial Transactions (SFT)
    NewsBills
    MEASURES FOR PROMOTING LESS CASH ECONOMY - Prescription of electronic mode of payments
    NewsBills
    TDS on cash withdrawal to discourage cash transactions
    NewsBills
    Mandating acceptance of payments through prescribed electronic modes
    NewsBills
    TAX INCENTIVES - Incentives to International Financial Services Centre (IFSC):
    NewsBills
    Incentives to Non-Banking Finance Companies (NBFCs)
❯❯
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
    Case LawsGST
    Show AI Summary
    Zero-rated supplies entitlement: IGST refund cannot be denied solely because exporter claimed higher drawback; statutory rules prevail.
    The statutory refund regime treats the shipping bill as a deemed application for IGST refund on exports and allows withholding of refund only in the specific, enumerated circumstances provided by the rules. Administrative circulars cannot override the statute; availing a higher duty drawback or technical limitations in departmental systems do not, without falling within the prescribed withholding contingencies, defeat an exporter's entitlement to IGST refund for zero-rated supplies.
    Case LawsGST
    Show AI Summary
    Input Tax Credit time limit: GSTR 3B is a temporary stopgap and does not fix the statutory monthly return deadline.
    The Court held that GSTR 3B was implemented as a temporary stopgap and was not intended to replace the statutory monthly return; an administrative press release treating GSTR 3B filing as the outer date to avail Input Tax Credit conflicted with the statutory time limit provision and the rules prescribing the monthly return form and manner.
    NewsBills
    Show AI Summary
    Rates for deduction of income-tax at source from salaries set and applied to advance tax and special-case assessments.
    Part III of the First Schedule prescribes rates for deduction of income-tax at source from salaries and for computation of advance tax for the financial year 2019-20; those rates also apply to charging income-tax on current incomes in special assessment cases such as provisional assessment of non-resident shipping profits, assessments of persons leaving India, persons likely to transfer property to avoid tax, and short-duration bodies.
    NewsBills
    Show AI Summary
    Income-tax rates and surcharge rules set slab-based taxation with a graduated surcharge and limits on surcharge impact.
    Slab-based income tax rates are prescribed for individuals, HUFs, AOPs, BOIs and artificial juridical persons with separate resident senior citizen slabs; computed tax is subject to a graduated surcharge for higher incomes, accompanied by a cap mechanism preventing the total tax-plus-surcharge on an income from exceeding the tax at the relevant bracket threshold by more than the excess income above that threshold.
    NewsBills
    Show AI Summary
    Tax rates for co-operative societies remain unchanged; a surcharge with a cap applies to high income societies.
    Rates of income-tax for co-operative societies remain as specified in Paragraph B of Part III of the First Schedule to the Finance Bill, unchanged from the prior year. A surcharge applies to the income-tax of societies exceeding a high-income threshold, subject to a cap that prevents total tax and surcharge from exceeding the tax at the threshold by more than the excess income.
    NewsBills
    Show AI Summary
    Firm tax rate unchanged; surcharge applies to high income firms with a statutory cap limiting surcharge on excess income.
    Rate of tax for firms for TDS and advance tax remains unchanged from the prior year; a surcharge of twelve per cent is levied where a firm's total income exceeds one crore rupees, subject to a cap that limits the aggregate income tax and surcharge on income above the threshold to not exceed the tax on the threshold amount by more than the excess income.
    NewsBills
    Show AI Summary
    Surcharge on local authority income applies above a threshold, with a statutory cap limiting aggregate tax increase.
    The income-tax rate for local authorities is maintained at the prior year's level for purposes of TDS and advance tax; a statutory surcharge is levied where total income exceeds a prescribed threshold. A statutory cap limits the combined income-tax and surcharge so that the aggregate tax on income above the threshold does not exceed the income-tax payable as if income equalled the threshold by more than the excess income.
    NewsBills
    Show AI Summary
    Corporate tax rate revised, varying by domestic status; surcharge and health and education cess apply.
    Income tax rates for companies distinguish domestic and other companies, with domestic companies below a specified turnover threshold subject to a lower rate and others taxed at a higher rate. Surcharge is levied in graded bands for domestic and non domestic companies, with marginal relief caps limiting excess tax attributable to incomes above prescribed thresholds. Certain specified company cases attract a prescribed surcharge rate. A Health and Education Cess is levied on tax including surcharge, and marginal relief is not available in respect of that cess.
    NewsBills
    Show AI Summary
    TDS on individual and HUF payments to contractors and professionals: new withholding applies above threshold; PAN may be used instead of TAN.
    Section 194M imposes withholding on payments by individuals and Hindu undivided families to resident contractors and professionals where the aggregate annual payments exceed the statutory threshold; tax is to be deducted at the prescribed withholding rate and may be deposited using the payer's Permanent Account Number, relieving such payers from the requirement to obtain a Tax Deduction Account Number.
    NewsBills
    Show AI Summary
    TDS on transfer of immovable property now covers ancillary charges, expanding 'consideration' to include fees incidental to sale.
    The Explanation to Section 194-IA is amended to state that consideration for immovable property includes ancillary charges payable by the buyer-such as club membership, car parking, electricity and water facility fees, maintenance fees, advance fees and other similar incidental charges-thereby making these amounts part of the taxable base for TDS on transfer of immovable property other than agricultural land.
    NewsBills
    Show AI Summary
    Deemed accrual of gifts: transfers by Indian residents to nonresidents treated as taxable in India under new provision.
    Gifts of money or property made by a person resident in India to a person outside India, where the property is situated in India or sums are paid, are deemed to accrue or arise in India for tax purposes when made on or after 5 July 2019; existing statutory gift exemptions continue to apply and applicable DTAA provisions remain operative. The amendment takes effect from 1 April 2020 and applies to assessment year 2020-21 onward.
    NewsBills
    Show AI Summary
    Mandatory return filing for high-value transactions expands to include transaction and rollover-based filing triggers.
    Amendments mandate filing of income tax returns by individuals who, during the previous year, undertake specified high-value transactions-including large current account deposits, significant foreign travel expenditure, or substantial electricity consumption-or meet other prescribed conditions; and require persons claiming capital gains rollover exemptions on reinvestment in specified assets to file returns when their pre-rollover total income exceeded the basic exemption limit, even if post-claim income is below that limit.
    NewsBills
    Show AI Summary
    Inter-changeability of PAN and Aadhaar: Aadhaar may be quoted in lieu of PAN and recipients must ensure authentication.
    Proposed amendments allow a person required to quote PAN to furnish an Aadhaar number in lieu of PAN and provide that persons entering certain prescribed transactions who lack a PAN must apply for one; recipients of documents must ensure PAN or Aadhaar is duly quoted and authenticated, and a penalty provision is amended to enforce compliance.
    NewsBills
    Show AI Summary
    PAN-Aadhaar linkage: failure to intimate Aadhaar renders PAN inoperative while preserving prior transactions under proposed amendment.
    Failure to intimate Aadhaar will result in the PAN being made inoperative in the prescribed manner rather than being deemed invalid, with an express provision preserving the validity of transactions previously carried out through that PAN; the amendment is prospective and will take effect from the notified effective date.
    NewsBills
    Show AI Summary
    Statement of Financial Transactions reporting: expanded mandatory reporting, threshold removed and penalties broadened to enhance tax pre-filling.
    Mandatory reporting under the Statement of Financial Transactions is widened to require additional prescribed persons to furnish SFTs, the existing aggregate transaction threshold for reporting is removed to include small-value transactions, defects unrectified within the prescribed time will be treated as furnishing inaccurate information, and penalty provisions are expanded to cover all reporting entities; these amendments take effect from 1st September, 2019.
    NewsBills
    Show AI Summary
    Electronic payment requirement extended to include prescribed electronic modes, altering payment compliance and tax treatment from specified effective dates.
    Amendments add "other electronic mode as may be prescribed" to the list of acceptable non cash payment modes across multiple income tax provisions, so payments or receipts through prescribed electronic instruments will satisfy statutory conditions for donation exemption, capital expenditure recognition, disallowance avoidance, actual cost determination, stamp duty linked valuation, presumptive taxation eligibility, and employment related deductions. The changes apply from specified effective dates: most tax treatment provisions from 1 April 2020 and the prohibitions on specified cash receipts/repayments from 1 September 2019.
    NewsBills
    Show AI Summary
    TDS on cash withdrawals to apply when annual cash withdrawals exceed a threshold, with specified institutional exemptions.
    Section 194N creates a TDS obligation on cash payments from a recipient's account by banks, cooperative banks and post offices when annual aggregate cash withdrawals exceed a prescribed threshold, targeting reduction of cash transactions; specified institutional recipients are exempted, and the Central Government may notify further exemptions in consultation with the Reserve Bank of India, with a statutory commencement provision.
    NewsBills
    Show AI Summary
    Mandatory electronic payment acceptance requires businesses above a turnover threshold to provide prescribed digital payment facilities, with daily penalties.
    A new provision requires persons carrying on business whose total sales, turnover or gross receipts in the immediately preceding previous year exceed a specified turnover threshold to provide facilities for accepting payments through the prescribed electronic modes. Failure to provide such prescribed electronic payment facilities attracts a daily monetary penalty, subject to proof of good and sufficient reasons, with penalty imposition by the Joint Commissioner. A consequential amendment prohibits banks and system providers from imposing any charge for using the prescribed electronic payment modes.
    NewsBills
    Show AI Summary
    IFSC tax incentives expand tax-neutral transfers and exemptions to promote external borrowing and extended profit-linked deductions.
    Proposed IFSC tax measures include treating transfers of specified securities by Category III AIFs with all non-resident unit-holders as not constituting transfer, empowering notification of additional securities, exempting interest payable to non-residents on borrowings by IFSC units, extending tax neutrality to dividends paid out of accumulated IFSC income, exempting distributions by mutual funds in IFSC with all non-resident unit-holders from additional tax, ensuring full access to profit-linked deductions for IFSC units by removing restrictive computation conditions, and increasing the one-hundred-per-cent deduction to any ten consecutive assessment years within a fifteen-year window.
    NewsBills
    Show AI Summary
    Interest recognition rule extended to regulated NBFCs, with deductions allowed only when interest is actually paid by return-filing deadline.
    The accrual-exception that taxes interest on bad or doubtful debts when credited or received is extended to include deposit-taking NBFCs and systemically important non-deposit-taking NBFCs; correspondingly, interest deductions for payments to these NBFCs are allowable only if actually paid on or before the due date for filing the return of income, aligning their tax treatment with other regulated financial institutions.

    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 341 "Application of income." between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      11 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Section 341 Application of income

      Income-tax Act, 2025

        At a Glance

        Clause 341 of the Income Tax Bill, 2025 (Old Version) sets out what constitutes permissible application of income by registered non-profit organisations. It matters to charitable/religious trusts and registered non-profit organisations, and to tax authorities monitoring compliance with application-of-income conditions. Effective date/decision date: Not stated in the document.

        Background & Scope

        Statutory hook: Clause 341 of the Income Tax Bill, 2025 (Old Version) addressing "Application of income" of a registered non-profit organisation. Context: governs what sums may be treated as application of income for non-profit organisations to ascertain compliance with conditions for tax treatment. Coverage: sums applied for charitable/religious purposes in India, donations to other registered non-profits, corpus donations, reinvestment of corpus in permitted modes u/s 350, repayment of loans/borrowings, and exclusions. Definitions or further explanations: Not stated in the document beyond references to sections 35(b)(i), 36(4)-(7), and section 350.

        Statutory Provision Mode

        Text & Scope

        Clause 341, Income Tax Bill, 2025 (Old Version) sets out what sums are to be allowed as "application of income" to a registered non-profit organisation. The provision identifies three categories in sub-section (1): (a) sums applied for charitable or religious purposes in India for which the organisation is registered (subject to payment during the tax year and allowability under specified sections), (b) 85% of donations made to other registered non-profit organisations, and (c) nil with respect to corpus donations to other registered non-profit organisations. Sub-section (2) includes reinvestments into permitted corpus modes and repayments of loans/borrowings within five years (subject to conditions including no prior violation and application post 31 March 2021) as application of income. Sub-section (3) excludes from application: depreciation/allowances claimed in respect of an asset acquisition already treated as application of income and set off/allowance of excess application from prior years. Sub-section (4) states that application from corpus, loan/borrowing, accumulated income, specified income or deemed accumulated income shall not be considered as application for the purpose of sub-sections (1) and (2).

        Interpretation

        The text links the concept of "application of income" to both timing (payment during the tax year) and substantive allowability u/ss 36(4)-(7) and 35(b)(i). Legislative intent apparent from the text is to restrict qualifying applications to sums that are both paid and allowable under income tax rules, and to avoid treating corpus transfers as qualifying applications. The Bill articulates a cross-reference approach whereby existing tax-law tests (sections 35 and 36 provisions) determine allowability. The inclusion of a prescribed percentage treatment for donations to other registered organisations (85%) indicates a legislative policy to permit a substantial portion of inter-charity donations to count as application while retaining a residual disallowance (15%).

        Exceptions/Provisos

        Explicit exceptions in the Bill text: corpus donations to other registered non-profit organisations are treated as nil for application purposes. Sub-section (3) excludes depreciation/allowances already claimed and set off of earlier excess applications. Sub-section (4) excludes application from corpus, loan/borrowing, accumulated income, specified income or deemed accumulated income for the purposes of sub-sections (1) and (2). There are conditional provisos in sub-section (2) requiring reinvestment or repayment within five years and that the original application from corpus or loan/borrowing be post-31 March 2021 and compliant with the Part.

        Illustrations

        • Example 1 - Direct application: A registered trust pays Rs. 1,000,000 during the tax year for a charitable program for which it is registered, and the payment is allowable u/ss 36(4)-(7) and 35(b)(i). That sum would qualify as application of income under sub-section (1)(a).
        • Example 2 - Donation to another registered organisation: A registered society donates Rs. 100,000 to another registered society. Under sub-section (1)(b), 85% (i.e. Rs. 85,000) would count as application of income; under sub-section (1)(c) corpus components would count as nil if the payment is a corpus donation.
        • Example 3 - Reinvestment from corpus: Not stated in the document whether a trust that re-invests corpus within five years will satisfy other procedural prerequisites beyond those listed; the Bill requires reinvestment within five years and that the original corpus application be after 31-03-2021 with no violations. Specific permitted modes are referred to section 350 (modes) but details of those modes are Not stated in the document.

        Interplay

        The clause expressly refers to and depends upon sections 35(b)(i), 36(4)-(7) and section 350 for determining allowable payments and permitted modes of investment. It also cross-refers to "this Part" and corresponding provisions of the Income-tax Act, 1961 for compliance history. Specific rules, notifications or circulars beyond these textual cross-references are Not stated in the document.

        Differences between the two provisions and practical impact

        • Explicit treatment of corpus donations paid to other organisations:

          • Bill (Clause 341, Document 2): sub-clause (1)(c) expressly states "nil, with respect to any sum paid as a corpus donation to any other registered non-profit organisation."
          • Act (Section 341, Document 1): sub-section (3)(c) provides that "any sum paid as a corpus donation to any other registered non-profit organisation" shall not be allowed as application of income (i.e., it is listed among claims not allowed).
          Practical impact: Both texts in effect disallow treating corpus donations to other registered entities as application of income, but the Bill states the position as a component of what is allowed (explicitly allowing "nil"), while the Act lists it among exclusions. Substance is similar; the Bill's expression is potentially clearer as a standalone rule, whereas the Act's placement in exclusions may be read as reinforcing general illegibility for application treatment.
        • Order and wording of paid sums qualifying as application:

          • Bill (Document 2): sub-section (1)(a) requires the sum be "paid during such tax year" and "such payment is allowable u/ss 36(4), (5), (6) and (7) and 35(b)(i)."
          • Act (Document 1): sub-section (1)(a) provides similar requirements but phrases them as "where such sum is paid during the tax year provided that the provisions of section 35(b)(i) and section 36(4), (5), (6), and (7) shall apply in respect of such sum."
          Practical impact: No substantive difference in the qualifying conditions; the Act's language places emphasis on the applicability of the identified sections, while the Bill is more prescriptive that payment during the year and allowability under those sections are required. Both link allowability u/ss 35/36 to qualification as application.
        • Deemed application (85% rule and deemed application mechanics):

          • Bill (Document 2): does not contain provisions comparable to Section 341(5)-(8) of the Act concerning the 85% of regular income requirement, shortfall treatment as deemed application, timing for application of deemed application, and exercise of option.
          • Act (Document 1): contains sub-sections (5)-(8) establishing an 85% regular income normative target, permitting registered organisations to elect to treat shortfall as deemed application, specifying timing rules for application, and prescribing exercise of option on or before the due date u/s 263(1) for furnishing return of income.
          Practical impact: The Act introduces a compliance mechanism (85% of regular income) and a deemed application regime with procedural timings. The Bill version lacks this constructive mechanism; therefore, under the Bill an organisation's failure to apply regular income to the extent of 85% would not be remedied by deeming (unless other provisions exist elsewhere). The Act increases formal compliance burdens and provides a remedy (option) to treat shortfall as application within specific timelines; omission from the Bill means those procedural obligations/benefits are not present in the Bill text as reproduced.
        • Capital gains treated as application:

          • Bill (Document 2): contains no counterpart to the Act's sub-sections (9) and (10) dealing with capital gains from transfer of capital assets held for charitable or religious purposes and definitions such as "appropriate fraction," "cost of transferred asset," and "net consideration."
          • Act (Document 1): specifies when capital gains on transfers of trust property are deemed application (full or fractional amounts) and provides definitions for key terms used in that analysis.
          Practical impact: The Act creates a clear statutory rule treating certain capital gains as application of income when proceeds are reinvested in qualifying capital assets; the Bill lacks such rules, leaving potential ambiguity regarding tax treatment of capital gains arising to trusts. The Act's rules may aid in tax neutrality for reinvestment of trust assets; absent that, the Bill would leave organisations reliant on other provisions or administrative guidance.
        • Express exclusions and structuring differences:

          • Bill (Document 2): The exclusions list in sub-section (3) comprises clauses (a) and (b) (depreciation/allowance previously claimed as application; set off of excess application), but does not include clause (c) of the Act (which there is included in Act sub-section (3)(c)).
          • Act (Document 1): explicitly includes three exclusions (a), (b), (c) in sub-section (3), making the treatment of corpus donations as excluded clearer within the exclusions list.
          Practical impact: The Act's exclusions list is more exhaustive. The Bill's omission (as presented) could cause interpretive uncertainty until clarified by other provisions or parliamentary amendments.

        Practical Implications

        • Compliance and risk areas: The requirement that payments be "paid during such tax year" and be allowable under the cross-referenced sections imposes evidentiary and timing burdens on registered non-profit organisations to substantiate payments and their tax allowability. The 85% rule for donations to other registered entities creates a mathematical step for accounting and tax reporting; organisations must track whether payments are corpus or non-corpus to determine whether 85% or nil applies.
        • Record-keeping/evidence: Organisations will need contemporaneous payment evidence (ledgers, bank payment instruments), documentation demonstrating allowability u/ss 35/36, clear characterisation of donations as corpus or revenue, and records of repayments or reinvestments into permitted modes (section 350) within five-year periods where applicable. The Bill's five-year windows and post-31-03-2021 condition require maintenance of historical compliance records showing no violations.

        Key Takeaways

        • Clause 341 defines what counts as application of income for registered non-profit organisations, linking allowability to sections 35 and 36 and to timing of payment.
        • Donations to other registered organisations are partly recognised (85%) except corpus donations which are expressly treated as nil.
        • Reinvestment into permitted corpus modes and repayment of loans may be treated as application if made within five years and subject to compliance conditions and post-31-03-2021 applicability.
        • Certain claims (depreciation/allowances already claimed as application; set off of earlier excess application) are excluded from being treated as application.
        • The clause depends on other provisions (sections 35, 36 and 350) for definitions and modalities; practical compliance requires careful recordkeeping.
        • Compared with the enacted Section 341, the Bill (old version) omits the deemed-application (85% regular income) mechanism and capital-gains-deemed-application rules present in the Act.

        Full Text:

        Section 341 Application of income

        Topics

        ActsIncome Tax