Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
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
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. 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
    ManualsIncome Tax
    What is the impact of ICDS X containing transitional provisions.
    ManualsIncome Tax
    Under ICDS X, whether reversal of an asset and the related income would mean that the entry which wa...
    ManualsIncome Tax
    Can any expenditure should set off against a provision recognised for another expendiure.
    ManualsIncome Tax
    Expenditure on post-retirement benefits like provident fund, gratuity, etc. are covered by specific ...
    ManualsIncome Tax
    What is the manner of recording the borrowing costs.
    ManualsIncome Tax
    What are the activities necessary to prepare inventory for its intended sale as per ICDS IX.
    ManualsIncome Tax
    There are specific provisions in the Act read with Rules under which a portion of borrowing cos...
    ManualsIncome Tax
    How to allocate borrowing costs relating to general borrowing as computed in accordance with formula...
    ManualsIncome Tax
    Under ICDS IX does borrowing cost include exchange differences arising from foreign currency borrowi...
    ManualsIncome Tax
    Whether bill discounting charges and other similar charges would fall under the definition of borrow...
    ManualsIncome Tax
    Which are the borrowing costs covered by ICDS IX.
    ManualsIncome Tax
    What is the manner in which securities held as stock-in-trade are required to be valued.
    ManualsIncome Tax
    Para 9 of ICDS-VIII on securities requires securities held as stock-in-trade shall be valued at actu...
    ManualsIncome Tax
    Which ICDS would govern derivative instruments.
    ManualsIncome Tax
    For subsidy received prior to 1st day of April 2016 but not recognised in the books pending satisfac...
    ManualsIncome Tax
    How to deal with a situation where compensation is payable for the purposes of giving ‘immediate f...
    ManualsIncome Tax
    Whether a grant which is not directly relatable to non-depreciable assets should be concluded as an ...
    ManualsIncome Tax
    Where the grants are received for assets which are outside the block of assets, then what is the tre...
    ManualsIncome Tax
    Whether grants should be recognised even in cases where there is no certainty that the conditions at...
    ManualsIncome Tax
    How are Government grants to be recognized.
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

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

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    ManualsIncome Tax
    What is the impact of ICDS X containing transitional provisions.
    Show AI Summary
    Transitional provisions for ICDS X ensure recognition of provisions and contingent items to prevent double taxation or omission.
    Transitional recognition under ICDS X requires that provisions, contingent liabilities and contingent assets and related income be recognised for previous years commencing on or after 1 April 2016 in accordance with this standard, after taking into account any amount recognised for the same items for previous years ending on or before 31 March 2016; the rule aims to prevent double taxation or omission of income.
    ManualsIncome Tax
    Under ICDS X, whether reversal of an asset and the related income would mean that the entry which wa...
    Show AI Summary
    Supremacy of tax law: reversal of an ICDS-recognised asset must follow tax deduction rules, permitting write-off as bad debt.
    Reversal of an asset and related income recognised under ICDS X must conform to the Income-tax Act where conflicts arise; the Act's tax-deduction treatment applies, allowing write-off as a bad debt rather than simply reversing the original accounting recognition entry.
    ManualsIncome Tax
    Can any expenditure should set off against a provision recognised for another expendiure.
    Show AI Summary
    Set-off of provisions: expenditures may be set off only against the original provision, not provisions for different purposes.
    Under ICDS X, expenditures must be set off only against the original provision for which they were recognised; expenditures cannot be offset against provisions recognised for a different event or purpose, as that would conceal the separate financial effects of distinct events and undermine transparent disclosure of provisions, contingent liabilities and contingent assets.
    ManualsIncome Tax
    Expenditure on post-retirement benefits like provident fund, gratuity, etc. are covered by specific ...
    Show AI Summary
    Employee post retirement benefit provisioning excluded from ICDS X, governed by specific statutory provisions for income computation.
    Provisioning for employee post retirement benefits covered by AS 15 shall continue to be governed by specific provisions of the Act and are not dealt with by ICDS X; ICDS X does not apply to liabilities otherwise falling within AS 15.
    ManualsIncome Tax
    What is the manner of recording the borrowing costs.
    Show AI Summary
    Borrowing costs capitalization requires capitalizing interest for qualifying assets; inventory only when production is prolonged.
    Borrowing costs directly attributable to acquisition, construction or production of tangible and intangible assets must be capitalized as part of the asset cost. Inventory borrowing costs are capitalized only when the inventory requires an extended period to become saleable. Specific borrowings for a qualifying asset require capitalization of actual borrowing costs incurred during the qualifying period. For general borrowings, a formulaic allocation apportions borrowing costs to qualifying assets based on the ratio of qualifying assets to total assets.
    ManualsIncome Tax
    What are the activities necessary to prepare inventory for its intended sale as per ICDS IX.
    Show AI Summary
    Inventory preparation processes define activities included in inventory cost when making goods fit and saleable under accounting standards.
    Activities necessary to prepare inventory for its intended sale include all processes required to make inventory functional for its intended use and to render it saleable, notably quality control to verify fitness for use and primary packing where goods are normally sold in packed condition.
    ManualsIncome Tax
    There are specific provisions in the Act read with Rules under which a portion of borrowing cos...
    Show AI Summary
    Borrowing cost capitalization must exclude portions disallowed by specific statutory provisions, only allowable amounts may be capitalised.
    Borrowing costs capitalised under ICDS IX must exclude amounts disallowed by specific provisions of the Act; only the portion of borrowing cost that remains allowable under the Act may be capitalised, because specific statutory disallowances override ICDS treatment.
    ManualsIncome Tax
    How to allocate borrowing costs relating to general borrowing as computed in accordance with formula...
    Show AI Summary
    Capitalization of borrowing costs: general borrowing must be allocated to qualifying assets and capitalized on an asset-by-asset basis.
    General borrowing costs computed under the ICDS-IX formula must be apportioned among qualifying assets and capitalized on an asset-by-asset basis, so that each qualifying asset's capitalized borrowing cost reflects its proportionate share of general borrowing under the standard.
    ManualsIncome Tax
    Under ICDS IX does borrowing cost include exchange differences arising from foreign currency borrowi...
    Show AI Summary
    Exchange differences excluded from borrowing costs under ICDS IX; foreign exchange effects governed by ICDS VI.
    Exchange differences from foreign currency borrowings that are treated as adjustments to interest are excluded from borrowing costs under ICDS IX; the effects of changes in foreign exchange rates, including those relating to interest, are governed by ICDS VI.
    ManualsIncome Tax
    Whether bill discounting charges and other similar charges would fall under the definition of borrow...
    Show AI Summary
    Borrowing cost: bill discounting and similar charges treated as borrowing cost, except when not tied to borrowed funds.
    The definition of borrowing cost is inclusive and generally covers bill discounting charges and similar charges as borrowing cost for income computation and disclosure; however, discounting charges that do not arise from borrowing funds are excluded from that definition.
    ManualsIncome Tax
    Which are the borrowing costs covered by ICDS IX.
    Show AI Summary
    Borrowing costs include interest and related charges such as commitment charges, amortised discount and finance lease charges.
    Borrowing costs under ICDS IX comprise interest and other costs incurred in connection with borrowing funds, including commitment charges, amortised discount or premium, amortised ancillary costs in arranging borrowings, and finance charges for assets taken on finance lease.
    ManualsIncome Tax
    What is the manner in which securities held as stock-in-trade are required to be valued.
    Show AI Summary
    Valuation of securities as stock-in-trade: mandatorily at lower of actual cost and net realizable value.
    Securities held as stock-in-trade must be valued at the lower of actual cost initially recognized and net realizable value at year-end. Unlisted or unquoted securities held as stock-in-trade are to be measured at actual cost as initially recognized, under the income computation and disclosure standards framework.
    ManualsIncome Tax
    Para 9 of ICDS-VIII on securities requires securities held as stock-in-trade shall be valued at actu...
    Show AI Summary
    Valuation of securities: aggregate category wise cost compared with net realisable value, lower amount taken as carrying value.
    For subsequent measurement under ICDS VIII, securities held as stock in trade are aggregated category wise; for each category the aggregate cost and aggregate net realisable value are compared, and the lower of the two is taken as the carrying value.
    ManualsIncome Tax
    Which ICDS would govern derivative instruments.
    Show AI Summary
    Derivatives accounting: ICDS VI governs typical derivatives, ICDS I applies residually, capital-asset derivatives are excluded.
    ICDS VI supplies guidance for derivative contracts such as forward contracts; derivatives outside ICDS VI's scope fall under ICDS I. Derivative instruments that qualify as capital assets are excluded from ICDS and thus not governed by those standards.
    ManualsIncome Tax
    For subsidy received prior to 1st day of April 2016 but not recognised in the books pending satisfac...
    Show AI Summary
    Recognition of government grants: pre-existing grants deemed recognised on receipt while later grants follow ICDS recognition criteria.
    Grants actually received before the ICDS effective date are deemed recognised on receipt under Para 4(2) of ICDS VII and remain governed by pre-ICDS law; grants received on or after the effective date must be recognised only when the ICDS VII recognition criteria in Paras 5-9 are satisfied, with recognition then following ICDS VII.
    ManualsIncome Tax
    How to deal with a situation where compensation is payable for the purposes of giving ‘immediate f...
    Show AI Summary
    Government grant for immediate financial support must be recognised when receivable, irrespective of actual receipt.
    Government grants given as immediate financial support and not tied to specific expenditure must be recognised when the grantee is entitled and sums become receivable; actual receipt is immaterial. If the grant is confined to an individual enterprise and grant-related conditions are met, recognition occurs in the period of receivability, governing timing of income inclusion and disclosure under the income computation framework.
    ManualsIncome Tax
    Whether a grant which is not directly relatable to non-depreciable assets should be concluded as an ...
    Show AI Summary
    Government grants treatment: grants not directly relatable to nondepreciable assets treated as taxable income rather than reduction in asset cost.
    Grants not directly relatable to nondepreciable assets are to be recognised as taxable income under the Act rather than deducted from asset cost; the ICDS preamble confirms the Act prevails over ICDS, and paragraph 7 of ICDS VII applies solely to depreciable assets where reduction of asset cost is appropriate.
    ManualsIncome Tax
    Where the grants are received for assets which are outside the block of assets, then what is the tre...
    Show AI Summary
    Recognition of government grants: generally recognized as income on receipt unless reasonable certainty permits spreading with related costs.
    Grants for assets outside the block of depreciable assets are to be recognized as income; statutory tax provisions control and preclude spreading recognition beyond the year of receipt, except where there is reasonable certainty of receipt permitting deferral and matching with costs incurred for obligations related to the non-depreciable assets.
    ManualsIncome Tax
    Whether grants should be recognised even in cases where there is no certainty that the conditions at...
    Show AI Summary
    Recognition of government grants: must occur on receipt; potential reversals are applied against unamortized deferred credit balances.
    ICDS VII requires government grants to be recognised on the date of receipt and prohibits deferral beyond receipt; where grants become refundable because attached conditions are unmet, reversal of initial recognition must first be applied to the unamortized deferred credit arising from the grant, so income recognition must reflect both receipt and the certainty of meeting conditions.
    ManualsIncome Tax
    How are Government grants to be recognized.
    Show AI Summary
    Recognition of government grants requires reasonable certainty of compliance and receipt; disclose in income computation accordingly.
    Under ICDS VII, government grants are to be recognized when there is reasonable certainty that the related conditions will be complied with and that the grants will be received; such grants should not be postponed beyond the actual receipt date for income computation and disclosure purposes.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Income Tax › Act-Rules › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Income Tax

      Comparison of SCHEDULE XVI "PERMITTED MODES OF INVESTMENT OR DEPOSITS" between the Income-Tax Act, 2025 (as passed) and the Income-Tax Bill, 2025 (as originally introduced)

      18 September, 2025

      Contents
      Acts
      Rules & Regulations
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      SCHEDULE XVI - PERMITTED MODES OF INVESTMENT OR DEPOSITS

      Income-tax Act, 2025

      At a Glance

      The provided documents are two versions of SCHEDULE-XVI (Permitted Modes of Investment or Deposits) related to section 350 of the Income-tax legislation as presented in (a) "SCHEDULE-XVI of Income-tax Act, 2025" (Document 1) and (b) "SCHEDULE-XVI of Income Tax Bill, 2025 - Old Version" (Document 2). Both list permissible investment/deposit modes for registered non-profit / charitable or religious trusts or institutions. The differences between the two texts are principally editorial and ordering/wording differences and a few numbering/clauses variations; they do not indicate new substantive modes in the Old Version beyond those in the Act version provided. Affected parties: charitable/religious trusts, registered non-profit organisations, tax administrators and financial intermediaries. Effective date or decision date: Not stated in the document.

      Background & Scope

      Statutory hooks: See section 350 (referenced) and the schedule title SCHEDULE XVI. The schedule specifies the "modes of investing or depositing the money referred to in section 350" and therefore regulates the forms in which corpus or funds of charitable/religious trusts and institutions (or registered non-profit organisations) may be maintained to retain tax benefits or compliance with section 350. The schedule enumerates specific permitted instruments, investments, deposits and certain transitional and historical exceptions. Definitions are provided within the schedule (see paragraph providing definitions such as "long-term finance", "public company", "urban infrastructure", "Immovable property", "incubatee", "incubator").

      Statutory Provision Mode

      Text & Scope

      The schedule enumerates discrete permitted modes of investment/deposit for monies u/s 350. Coverage: central government small savings instruments (savings certificates, small savings schemes), Post Office Savings Bank, scheduled banks and cooperative banks, Unit Trust of India units, securities issued by Central/State Governments, government-guaranteed debentures, investments/deposits with public sector companies (with transitional deeming rules if company ceases to be a public sector company), bonds issued by specified financial corporations or public companies engaged in long-term housing/urban infrastructure finance, immovable property, IDBI deposits, units of specified mutual funds (Schedule VII entries), transfers to Public Account of India, deposits with housing/urban development authorities, equity shares of depositories, specified investments by recognised stock exchanges, investments by payment system entities in specified companies, incubator/incubatee investments, shares of National Skill Development Corporation, debt instruments of RBI-registered infrastructure finance companies, Sovereign Gold Bonds ("Stock Certificate" definition reference), units of Powergrid Infrastructure Investment Trust, shares in a public sector company, historical corpus exceptions (assets forming corpus as at specified historical dates), accretions by bonus shares, debentures acquired before specified historical dates, voluntary contributions maintained as specified tangible assets, short-term holding exception for non-specified assets, and funds representing business profits under specified conditions.

      Interpretation

      The schedule is primarily a closed list of permissible forms; interpretive principle implied: only these listed forms (and those falling within the enumerated transitional/historical carve-outs) qualify as compliant with section 350 requirements. The definitions provided constrain certain terms (for example, "long-term finance" defined by a five-year minimum repayment term, "Immovable property" excluding most machinery/plant). Legislative intent as indicated by the text: to allow a mix of conservative, government-backed, regulated financial instruments and specified sectoral investments while controlling diversion into unregulated assets; to preserve historical corpus exceptions; and to permit certain strategic sectoral investments (e.g., incubators, digital payments infrastructure, infrastructure finance).

      Exceptions/Provisos

      The schedule includes multiple temporal and condition-based exceptions: (a) investments in public sector company shares remain covered for three years after the company ceases to be a public sector company; (b) other deposit/investment in such company remains covered until repayable; (c) assets not specified in clauses (1)-(30) are permitted only if not held beyond one year from the end of the tax year in which acquired (Document 1 wording differs slightly-see differences table); (d) corpus preservation exceptions for assets held on 1 June 1973 and 1 June 1998; (e) certain assets acquired before 1 March 1983; (f) business profits may be retained only if separate books are maintained where other income exists.

      Illustrations

      • Example 1: A registered non-profit purchases Central Government savings certificates and deposits surplus funds in a scheduled bank: these are permitted under clauses (1) and (3).
      • Example 2: A trust acquires equity shares of a public sector company that later becomes disinvested and ceases to qualify as a public sector company; the trust's shareholding is deemed to remain a permitted investment for three years from the date of change (clause (7)(a)).
      • Example 3: A charitable institution receives a painting as a voluntary contribution and maintains it as part of corpus pending a Board notification: clause (30)/(32) allows voluntary contributions maintained in forms such as furniture or jewellery if specified by Board notification. (Note: reliance on Board notification is required.)

      Interplay

      The schedule cross-references: Government Savings Certificates Act, 1959; Depositories Act, 1996; Securities Contracts (Regulation) Act, 1956; Securities and Exchange Board of India Act, 1992; Payment and Settlement Systems Act, 2007; Companies Act, 2013; Industrial Development Bank of India Act, 1964; Schedule VII (mutual fund schemes); Sovereign Gold Bonds Scheme notification G.S.R. 827(E) dated 30 October 2015; and section 32(e) (as corrected). Interaction with these statutes and notifications determines eligibility/qualification of instruments and entities named. Specific practical interpretive issues: Not stated in the document (e.g., guidance on valuation, treatment of hybrid instruments, or applicable timelines for Board notifications).

      Differences between Document 1 (Schedule-XVI of Income-tax Act, 2025) and Document 2 (Schedule-XVI of Income Tax Bill, 2025 - Old Version)

      FeatureDocument 1 (Act)Document 2 (Bill - Old)Practical Impact
      Title/Scope descriptionReads "FORMS OR MODES OF INVESTMENT OR DEPOSITS BY A REGISTERED NON PROFIT ORGANISATION".Reads "FORMS OR MODES OF INVESTMENT OR DEPOSITS BY A CHARITABLE OR RELIGIOUS TRUST OR INSTITUTION".Potential drafting consistency/coverage difference: Act version uses broader term "registered non profit organisation" while Bill refers to "charitable or religious trust or institution". Practical effect depends on statutory definition of "registered non profit organisation" vs. "charitable or religious trust or institution" elsewhere - Not stated in the document.
      Numbering and orderingLists items (1)-(32) with definitions at paragraph 2 (a)-(f).Lists items (1)-(32) then includes clause (33) as the definitions block; textual wording slightly varies (e.g., references to "herein referred to" vs "hereafter referred to").Primarily editorial; no substantive change to listed permissible modes is apparent. Practical impact: negligible on permitted modes; clarity/interpretation possibly affected by drafting differences but core content substantially same.
      Specific clause differences (examples)Includes item (30) "voluntary contributions received and maintained in the form of jewellery, furniture or any other article as the Board may, by notification specify" as clause (30) and item (31) concerning assets not in clauses (1)-(30) held up to one year from end of tax year.Order differs: item (32) in Document 2 is the "voluntary contributions..." clause and item (30) in Document 2 refers to assets not being investments held after expiry of one year from end of tax year. Also Document 2 contains minor textual corrections (notes indicating correction of "section 32 (1)(e)" to "section 32 (e)").These are drafting/numbering and editorial corrections. Practical impact: none substantive, but numbering differences require caution when citing specific sub-paragraph numbers; reference to section 32(e) correction clarifies intended cross-reference.
      Definitions block placement and labellingDefinitions under "2. Interpretation" enumerated (a)-(f).Definitions included at the end as "(33) In this schedule,- (a) ... (f) ..." with slightly different heading style.No substantive difference in definitions themselves. Practical impact limited to citation conventions within drafting-users must ensure referencing correct clause numbering for each version.
      Minor wording variantsUses phrasing such as "herein referred to as investor" and "herein referred to as investee".Uses "hereafter referred to as investor" and "hereafter referred to as investee"; contains textual spacing and punctuation variations and an explicit errata note about corrections.Editorial only. Practical impact: none on legal substance, but the errata notes in Document 2 improve textual accuracy.

      Practical Implications

      • Compliance and risk areas: Trustees and non-profit administrators must ensure corpus monies are invested only in the enumerated modes or within the short-term holding exception; reliance on non-specified investments beyond the one-year grace risks non-compliance with section 350 conditions. Not stated in the document: procedural sanctions or consequences for non-compliance.
      • Record-keeping/evidence: The text implies need for records evidencing nature of instruments (e.g., government certificates, bank deposits, share certificates, notifications of permitted Board-specified tangible assets), dates of acquisition to apply short-term holding rule and historical corpus cut-off dates, and documentation of separate books of accounts where business profits and other income co-exist.

      Key Takeaways

      • SCHEDULE-XVI provides a closed/enumerated list of permitted investment/deposit modes for monies u/s 350, privileging government-backed and regulated instruments and certain sectoral investments.
      • Both documents substantially list the same modes; differences are largely editorial, numbering and minor wording variations, and a title wording variance (registered non-profit organisation vs. charitable or religious trust/institution).
      • Transitional exceptions (public sector company treatment, historical corpus dates, pre-1983 debentures) preserve earlier holdings and prevent retrospective disallowance of legacy corpus assets.
      • Short-term holding exception permits non-specified assets to be held only up to one year from the end of the tax year in which acquired (wording differs slightly between versions; practitioners should confirm the authoritative version before citation).
      • Definitions such as "long-term finance" (five-year minimum) and "Immovable property" (excluding most machinery/plant) narrow the scope of qualifying instruments.
      • Practical compliance requires careful record-keeping, attention to cross-references (e.g., section 32(e), statutory definitions), and monitoring of statutory/Board notifications referenced for certain asset categories.
      • Errata in the Bill (corrections from "section 32(1)(e)" to "section 32(e)") and minor drafting differences mean practitioners should use the enacted/official Gazette text for authoritative citation.

      Full Text:

      SCHEDULE XVI - PERMITTED MODES OF INVESTMENT OR DEPOSITS

      Topics

      ActsIncome Tax
      Next ➔