Mode of repayment restrictions: non cash repayment mandated for covered loans and advances to ensure traceability and compliance. Clause 188 mandates non cash repayment of loans, deposits and specified advances by account payee cheque, bank draft, electronic clearing or other prescribed electronic modes when the amount or the aggregate held by the person equals or exceeds twenty thousand rupees, with a higher threshold of two lakh rupees for primary agricultural credit societies and related rural banks. It exempts repayments to Government and regulated banking or notified entities, allows intra branch crediting by banks, broadly defines "loan or deposit," covers advances related to immovable property, and emphasizes aggregation to prevent splitting transactions.
Digital payment mandate requires businesses to provide prescribed electronic modes, promoting traceability and reducing cash transactions. Clause 187 mandates that every person carrying on business whose sales, turnover, or gross receipts exceed the prescribed monetary threshold in the immediately preceding tax year shall provide facilities for accepting payment through prescribed electronic modes, in addition to any other electronic modes offered; rule-making will specify the required modes, and compliance carries operational, record-keeping and penal implications while raising interpretive issues around prescription, group aggregation, and regulatory harmonization.
Restriction on high value cash transactions: mandatory use of prescribed banking or electronic modes to enhance traceability and compliance. Clause 186 prohibits receipt of cash at or above the specified monetary threshold except through account payee cheque, bank draft, electronic clearing, or other prescribed electronic modes, applying the ban to aggregated daily receipts from the same person, single transactions, and transactions linked to a single event or occasion; exemptions include government and specified banking entities and further classes as notified by the Central Government, while interpretive ambiguities and delegated rulemaking on permissible modes may require administrative clarification.
Cash transaction restriction: acceptance of loans, deposits and advances must be made only through traceable banking or electronic modes. Clause 185 prohibits accepting loans, deposits or specified sums in cash when the current transaction, the unpaid balance of prior transactions with the same person, or their aggregate reaches the prescribed threshold, and permits receipt only by account-payee cheque, account-payee bank draft, electronic clearing through a bank account or other prescribed electronic modes; exceptions cover the Government, specified banking and statutory entities, notified bodies, a rural higher threshold for primary agricultural credit societies and a narrow agricultural income exception.
Definition of High Court clarifies appellate forum for States and Union Territories in tax law, reducing jurisdictional ambiguity. Clause 374 of the Income Tax Bill, 2025, provides a comprehensive, enumerated definition of "High Court" by designating the specific High Court applicable to each State and Union Territory, updating nomenclature, reflecting post reorganization realities (including Jammu & Kashmir and Ladakh), and replacing reliance on piecemeal adaptation orders; this consolidation reduces jurisdictional uncertainty, aids administrative and judicial efficiency, and highlights the need for legislative updates or transitional provisions if future territorial changes occur.
Monetary limits on tax appeals: Board may set filing thresholds; non filing does not amount to departmental acquiescence. Clause 373 authorises the Board to fix monetary limits and other criteria for filing appeals by income tax authorities, permits the Board to revise those limits, and provides that non filing of an appeal in one case does not preclude filing in other years or against other assessees. The clause bars assessees from claiming departmental acquiescence due to non filing and directs tribunals and courts to have regard to the Board's instructions and the circumstances of filing or non filing while leaving the weight of those instructions to judicial discretion.
Exclusion of time to obtain copy suspends limitation for appeals and applications when copy not provided, subject to diligence. Clause 372 excludes the day of service and, where a copy was not provided with the notice, the time required to obtain that copy from computation of limitation for appeals and applications; the exclusion is subject to the assessee's reasonable diligence and requires documentary proof of application and receipt, with electronic service and portal access raising specific interpretive issues.
Consequential amendment of member assessments: appellate modification must trigger authorised adjustments to individual tax liabilities. Clause 371 requires that when appellate proceedings alter or direct a new assessment of a body of individuals or association of persons, the appellate authority must authorise the Assessing Officer to amend or make a fresh assessment of any member; the authorisation is mandatory, and the Assessing Officer may act only pursuant to that order. The clause modernises appellate references and retains the two-step mechanism while raising interpretive issues concerning the scope of "any member", timelines for action, and the definition of "fresh assessment".
Execution of Supreme Court cost orders: High Courts may transmit awards for local enforcement under established execution rules. The High Court, on petition, may transmit an order of the Supreme Court awarding costs to any court subordinate to the High Court for execution; the provision is limited to cost-related orders, is discretionary in application, requires adherence to execution rules and the Code of Civil Procedure, and mirrors the predecessor provision, leaving unresolved questions about the scope of "costs," appropriate subordinate fora, and special procedures where a government entity is the judgment debtor.
No automatic stay on tax recovery: assessed tax remains payable during appellate pendency unless a specific judicial stay is granted. Clause 369 requires that tax determined by an assessment order is payable despite the filing of an appeal to the High Court or Supreme Court, reflecting the No Automatic Stay principle that assessment orders remain enforceable unless a competent forum grants a specific stay; it narrows scope to appeals at the highest judicial levels, streamlines language compared with Section 265, and places onus on taxpayers to obtain interim relief if they seek to defer payment while preserving courts' discretion to grant stays subject to conditions.
Faceless tax administration expanded: scheme-making power permits executive modification of tax law subject to parliamentary laying. Clause 532 grants the Central Government power to notify schemes for any purpose of the Income Tax Act, 2025 to eliminate taxpayer interface and optimize resources, and to direct that Act provisions may be excluded or modified for scheme implementation; notifications must be laid before both Houses of Parliament and existing faceless schemes under the 1961 Act may be amended to ensure continuity.
Power to frame schemes expands executive authority to implement faceless, centralized tax administration with parliamentary oversight. Clause 532 authorizes the Central Government to notify schemes for any purpose under the Income Tax Act, permit notification based exceptions or adaptations of statutory provisions to implement those schemes, amend or continue existing schemes, and requires that such notifications be laid before both Houses of Parliament, thereby enabling faceless, centralized, and technology driven administration while raising concerns about the breadth of delegated legislative power and the indeterminate standard of technological feasibility.
Revisionary jurisdiction prevents orders prejudicial to the assessee while ensuring timely administrative review and minimum processing time. Clause 378 empowers senior tax officials as the Competent Authority to revise subordinate orders suo motu or on application, provided any revision is not prejudicial to the assessee. It prescribes one year limitation periods for initiation, allows condonation for sufficient cause, requires a nominal application fee, mandates disposal within a year from the end of the financial year of filing with specified exclusions for rehearings and judicial stays, and introduces a minimum sixty day residual period after exclusions for completion of revision.
Revisionary power: Competent Authority can revise orders prejudicial to revenue after hearing and within limitation. Clause 377 empowers a defined Competent Authority to call for and examine the record of proceedings and, after giving the assessee an opportunity of being heard and making necessary inquiry, to revise orders that are erroneous and prejudicial to the revenue by enhancing, modifying, cancelling or directing fresh assessments, including specified transfer pricing orders; it sets a two year limitation subject to exceptions to give effect to appellate directions and excludes certain periods from the limitation computation.
Appeals to Supreme Court: new bill mirrors CPC procedure but omits a saving proviso, raising interpretive risk. Clause 368 adopts the Code of Civil Procedure procedures for appeals to the Supreme Court "so far as may be", vests the Court with discretion on costs, and mandates that where a High Court judgment is varied or reversed, effect be given to the Supreme Court's order through the Bill's prescribed execution mechanism. The saving phrase and the absence of an express proviso preserving other reference and stay provisions are central interpretive and practical concerns.
Certification for Supreme Court appeal restricts access to cases presenting substantial legal questions, streamlining appellate tax litigation. Clause 367 confines appeals to the Supreme Court from High Court judgments to cases which the High Court certifies as fit for appeal and reframes the source of such appeals to judgments delivered on appeals under section 363, streamlining the previous reference/appeal bifurcation and maintaining a high certification threshold to limit review to substantial questions of law or issues of public importance.
Multi-judge bench requirement ensures collective resolution of contested legal points in tax appeals under the new bill. Clause 366 mandates a multi-judge bench requirement for specified tax appeals, directing that matters be heard by not less than two judges and decided according to the majority opinion; if no majority arises, judges must state the precise point of law in dispute, the point is reheard by additional judges, and the final decision on that point is determined by the majority of all judges who have heard the case.
Substantial question of law: High Court appeals limited to legal issues, streamlining tax appellate review and implementation. Clause 365 permits appeals to the High Court from Appellate Tribunal orders only when the High Court is satisfied a substantial question of law arises; it prescribes eligible appellants, a time-limited memorandum-based filing, condonation for sufficient cause, High Court formulation and limitation of the question(s) heard (with power to add questions for recorded reasons), reasoned judgments with costs, authority to decide issues not determined or wrongly decided by the Tribunal, application of Civil Procedure rules, and an express duty on the Assessing Officer to give effect to the High Court's judgment.
Procedural autonomy preserved in appellate tribunal; statutory cross references modernized while e governance provisions omitted, affecting bench practice. Clause 364 maintains the President's authority to constitute Benches, preserves the dual Judicial and Accountant member default and Special Benches for significant issues, permits single member disposal for lower value matters subject to presidential or authorised member designation, grants the Tribunal procedural autonomy and quasi judicial powers, modernises cross references to new penal and procedural statutes, and omits previous express provisions enabling executive notification of e governance schemes, raising transitional and implementation questions.
Tribunal Orders: stay limits and rectification rules balance taxpayer rights and revenue protection in the appellate process. Clause 363 establishes the Tribunal's authority to decide appeals after hearing parties, permits rectification of mistakes apparent from record within a prescribed period subject to a nominal fee and hearing where liability is increased, and prescribes an aspirational timeline for disposal. It provides a conditional stay-of-recovery regime requiring deposit or security with limited extension criteria and automatic vacation if disposal does not occur within the aggregate period; the Tribunal may award costs, must communicate orders to the assessee and Commissioner, and its orders are final save for specified statutory exceptions.
Make-available requirement limits treaty characterization of management and support payments as fees unless recipients gain independent technical capability. Fees for technical services under Article 12(4) of the India-Singapore DTAA require more than managerial, technical or consultancy characterisation. The ... Summary
Make-available requirement limits treaty characterization of management and support payments as fees unless recipients gain independent technical capability.
Fees for technical services under Article 12(4) of the India-Singapore DTAA require more than managerial, technical or consultancy characterisation. The services must satisfy an additional treaty gateway, including making available technical knowledge, experience, skill, know-how or processes that enable the recipient to apply the technology independently. Advice, operational assistance, recurring support, training or business benefits do not alone establish transfer of technical capability. Where the DTAA is more beneficial than the broader domestic definition, the treaty limitation governs, subject to treaty-residence and documentation requirements.
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