Amortisation of expenditure allows staged tax deduction for mineral prospecting expenses with carry-forward and anti-double-deduction safeguards. Clause 51 establishes a regime permitting amortisation of qualifying prospecting and mine-development expenses for Indian companies and resident individuals by allowing an annual deduction of one-tenth of the specified expenditure over ten tax years from the year of commercial production. It limits eligible expenditure to amounts incurred in the year of commercial production and the four preceding years, excludes acquisition costs of mineral sites and depreciable capital assets, bars double claims under other provisions, permits carry-forward within the ten-year ceiling, and requires audited accounts for non-corporate claimants.
Deductions for oil exploration clarify eligibility, government agreements and transfer treatment under new tax clause. Clause 54 establishes a tax framework for prospecting for mineral oils by permitting deductions for pre commercial production expenses and depletion of mineral oil, defining specified oil exploration business and including petroleum and natural gas as mineral oil, and requiring agreements with the Central Government to be laid before Parliament. It prescribes deduction interplay with other allowances and specifies tax treatment on business transfers, cessation during transfer year, and applicability on amalgamation or demerger.
Written down value reforms standardize WDV computation and clarify depreciation and block asset adjustments under the new tax provision. Clause 41 prescribes a standardized method for computing the written down value of depreciable assets: assets acquired in the tax year are valued at actual cost; earlier-acquired assets at cost less depreciation allowed; blocks of assets by the formula [(A-D)+B-C]-E; carried-forward depreciation is deemed allowed; adjustments are required for years where total income was not computed; mixed agriculture-business income is treated as business for depreciation; and the term "sold" is referenced to the Act for consistency.
Computation of actual cost updated to exclude subsidies and non-banking payments, tightening asset valuation for tax purposes. Clause 39 redefines actual cost for depreciation by reducing asset cost for amounts met by others, GST credits, additional duties and subsidies; excluding certain non-banking payments; providing a formula for indirect subsidy apportionment; specifying treatment in amalgamation, demerger and asset conversion; empowering assessing officers with supervisory approval to determine cost in avoidance cases; and defining special acquisition modes for transfer clarity.
Modernizing business income definitions clarifies taxable profit scope and aligns terms with contemporary financial instruments. Clause 66 revises key definitions for computing income under Profits and Gains of Business or Profession, broadening terms like agreement, specifying classifications for banking and housing finance companies, updating the scope of plant, refining fees for technical services, and narrowing the definition of speculative transactions with exceptions for bona fide hedging and specified derivatives; these updates modernise earlier Section 43 concepts to align with electronic payment modes, contemporary derivatives, and non cash considerations to reduce ambiguity in tax assessments.
Deemed business income: expanded scope taxes benefits from remission, asset disposals and successors' receipts under new Clause 38. Clause 38 deems specified sums as profits and gains of business or profession where deductions or allowances were earlier claimed, covering cessation or remission of trading liabilities, excess proceeds on disposal of assets over written down value, sale of research capital assets, recovery of bad debts, and withdrawals from special reserves; it conditions taxability on prior allowance, permits loss set off for ceased businesses, defines key terms and extends liability to successors and post cessation situations.
Non-deductibility of excessive payments: reinforces banking-mode payment rules and limits unreasonable related-party deductions. Clause 36 empowers disallowance of deductions for payments deemed excessive or unreasonable to specified persons by reference to fair market value and business need, treats related disallowed deductions as income where previously claimed, and conditions deductibility on payments above prescribed thresholds being made through specified banking or online channels while providing limited exceptions for business expediency.
Business deductions clarify allowable expenses, limiting interest capitalization and setting conditions for reserves and bond discounting. Clause 32 specifies allowable business deductions including bona fide bonuses or commissions, capitalization of interest until asset use, pro rata discount deduction for zero coupon bonds, conditional deductions for contributions to credit guarantee funds and statutory corporation expenditures, limits on special reserves for financial entities, deduction of marked to market losses under prescribed standards, phased family planning capital deductions, agricultural purchase deductions within government price limits, animal loss adjustments, and transaction tax deductions where trading forms part of business income.
Non-deductibility of expenses: new clause tightens TDS compliance, equalisation levy and partnership deduction limits. Clause 35 of the Income Tax Bill, 2025 prescribes categories of business or professional expenditures that are non-deductible, confirming taxes on income and related imposts are not deductible, disallowing deductions where TDS was not deducted or paid (subject to later allowance upon payment), denying deduction for cross-border salary payments lacking TDS compliance, treating equalisation levy and state-imposed charges as non-deductible, and conditioning deductions in partnerships and associations on authorization and prescribed limits to reinforce compliance and prevent tax avoidance.
Apportionment of deductions clarifies business use limits and streamlines depreciation rules under the new income tax framework. Clause 28 limits deductions for rent, local taxes, insurance and repairs to amounts wholly and exclusively for business use and permits apportionment by the Assessing Officer where use is mixed; Clause 33 creates a structured depreciation regime for tangible and intangible assets (excluding goodwill) including block of asset calculations, special provisions for new machinery and power generation assets, short use treatment, and rules on successor transactions.
Business expenditure deductions: exclusions tightened to bar CSR, political ads, and payments tied to unlawful conduct. Clause 34 requires that only expenditures incurred wholly and exclusively for business purposes, not of a capital or personal nature and not falling within specified exclusions, are deductible. It expressly disallows deductions for expenditures linked to offenses or prohibited activities, corporate social responsibility obligations, and political-advertisement costs, and clarifies that benefits, perquisites, compounding payments, and settlements related to unlawful conduct are non-deductible.
Business income deductions clarified and modernized, expanding allowable items and tightening conditions for claiming them. Clause 32 prescribes a list of allowable other deductions for business income computation, covering employee bonuses and commissions, interest on borrowed capital (with exclusions until assets are in use), contributions to specified credit guarantee funds, pro rata discount on zero coupon instruments, amounts carried to special reserves by defined financial entities, non-capital expenditure by notified statutory corporations, cooperative society purchase expenditure, marked to market or expected losses, family planning expenditures by companies, cost of animals used in business adjusted for carcass receipts, and transaction taxes where income is included in business profits.
Bad debt deductions: new limits and conditions for financial institutions, distinguishing rural-advance treatment and recovery rules. Clause 31 of the Income Tax Bill, 2025 creates a structured regime for deductions for provisions for bad and doubtful debts and for bad debts written off, prescribing percentage-based deduction limits for specified financial institutions with an additional allowance for rural-branch advances; it requires that write-offs be reflected in income computations, provides for partial recovery treatment, and distinguishes provisions from actual bad debts while aligning deductions with accounting and disclosure standards.
Search and seizure powers expanded to permit access to digital records, enhancing tax enforcement while raising privacy concerns. Clause 247 expands search and seizure authority to electronic media and digital records, authorising officers to access and seize emails, social media, trading and bank accounts where information indicates non production of documents or undisclosed assets; it modernises enforcement by treating digital records equivalently to physical evidence while raising privacy and misuse concerns that require procedural safeguards.
Insurance premium deductions permit tax relief for business stock, cattle insurance, and employer-paid health cover via non-cash payments. Clause 30 permits deduction for premiums paid for insurance against damage or destruction of business stocks, for premiums by federal milk cooperative societies to insure the life of cattle of primary society members engaged in milk supply, and for employers' premiums for employee health insurance provided payment is made through non-cash modes under approved schemes.
Employee welfare deductions clarified: new limits, timing and eligibility for employer contributions under Clause 29. Clause 29 prescribes conditions and limits for deducting employer contributions to recognized provident funds, approved superannuation funds, pension schemes (subject to a uniform percentage of salary including dearness allowance), and approved gratuity funds, sets the due date rules for employee contributions, and restricts deductions for provisions or contributions unless expressly authorised, thereby clarifying and refining the deductibility regime compared with current Sections 36 and 40A.
Employee welfare deductions clarified: permitted employer contributions to approved funds subject to prescribed limits and arm's-length scrutiny. Deductions for employer contributions to specified employee welfare vehicles are permitted only when made to recognised or approved funds and in accordance with prescribed limits, timing and conditions; provision-only gratuity reserves are generally non-deductible unless conditions are met, and contributions to other funds or trusts are disallowed except as expressly allowed or required by law.
Tax deduction for agricultural and skill development projects streamlines incentives while barring duplicate claims under the Act. Clause 47 permits deductions for expenditures on agricultural extension projects and for companies' skill development projects, excluding land and building costs, subject to Board notification and requisite documentation. It includes an express prohibition on claiming the same expenditure under any other provision of the Act for the same or any other tax year, consolidating and streamlining prior separate incentives while imposing compliance obligations to substantiate eligibility.
Site restoration fund deductions limited and conditional; misuse of withdrawals treated as taxable income under new regime. Clause 49 and Schedule X create a Site Restoration Fund regime allowing deductions for deposits into specified accounts subject to caps and conditions: claims require a government agreement and audited accounts, deposits must be made by year-end, withdrawals are restricted to scheme purposes and misuse is taxed as income, expenditures funded by withdrawals are nondeductible, and disposals tied to the scheme within a set period reverse deductions and are taxed.
Capital expenditure deduction for specified businesses enables immediate full write-off, subject to eligibility, exclusivity and usage conditions. Clause 46 permits full deduction of capital expenditure for a specified business in the year incurred, including pre-operational capitalized expenditure, subject to conditions: no splitting or reconstruction of existing businesses, prohibition on previously used machinery or plant, and, for certain sectors, fulfillment of regulatory approval and operational criteria; it bars claiming other deductions for the same expenditure and requires assets to be used exclusively for the specified business for at least eight years.
E-way bill compliance under GST rules governs prior movement information, transit documents, validity, cancellation, and special goods regimes. Rule 138 of the Central Goods and Services Tax Rules, 2017 governs the e-way bill system for movement of goods and requires prior electronic information ... Summary
E-way bill compliance under GST rules governs prior movement information, transit documents, validity, cancellation, and special goods regimes.
Rule 138 of the Central Goods and Services Tax Rules, 2017 governs the e-way bill system for movement of goods and requires prior electronic information before movement begins in specified cases, generally where consignment value exceeds fifty thousand rupees. The rule allocates responsibility for Part A and Part B of FORM GST EWB-01 among registered persons, authorised transporters, e-commerce operators, courier agencies and fallback transporters, while also covering special cases such as job work, handicraft goods, consolidated movement and transport by road, rail, air or vessel. Rule 138A specifies the documents that must accompany the conveyance, Rule 138 provides validity, cancellation and exemption rules, and Rule 138F creates a special intra-State regime for notified precious goods.
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