CONTENTS
DIVISION ONE
Commentary on changes made by Income-tax Act, 2025 vis-a-vis Income-tax Act,1961 1
2 DEFINITIONS
2.1 Overview of differences in the definitions contained in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
2.2 Meaning of Assessment (Section 2(8) of 1961 Act/Section 2(13) of 2025 Act)
2.3 Meaning of ‘Assessment Year’ omitted (Section 2(9) of 1961 Act)
2.4 “Assistant Director” shall also mean ‘Deputy Director’ (Section 2(9B) of the 1961 Act/Section 2(15) of the 2025 Act)
2.5 Books of account to cover records maintained on cloud-based storage (Section 2(12A) of the 1961 Act/Section 2(19) of the 2025 Act)
2.6 Definition of ‘Charitable Purpose’ (Section 2(15) of the 1961 Act/ Section 2(23) of the 2025 Act)
2.7 Co-operative societies registered under the Union Territories laws are also covered (Section 2(19) of the 1961 Act/Section 2(32) of the 2025 Act)
2.8 Definition of ‘Income’ to include all import and export incentives (Section 2(24) of the 1961 Act/Section 2(49) of the 2025 Act)
2.9 Meaning of ‘Previous Year’ omitted (Section 2(34) of 1961 Act)
2.10 Relative of an individual to cover both Maternal and Paternal Lineal Ascendants (Section 2(41) and Section 56 of 1961 Act/Section 2(94) and Section 92(5) of 2025 Act)
2.11 A concept of ‘Tax Year’ is introduced in place of ‘Previous Year’ and ‘Assessment Year’ (Section 3 of 1961 Act/Section 3 of 2025 Act)
BASIS OF CHARGE
3.1 Overview of differences in the provisions relating to the basis of charge in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
3.2 Tax payable on total income shall be paid by TDS, TCS or Advance Tax (Section 4 of 1961 Act/Section 4 of 2025 Act)
3.3 ‘Conduct of business of an entity as a whole’ v. ‘Conduct of business of the company as a whole’ (Section 6 of 1961 Act/Section 6 of 2025 Act)
3.4 ‘Buy Back’ of shares shall be deemed to be the income of the previous year in which it is so declared, distributed or paid (Section 8 of 1961 Act/Section 7 of 2025 Act)
3.5 Income deemed to accrue or arise in India (Section 9 of 1961 Act/Section 9 of 2025 Act)
3.6 The cap on the investment by an eligible investment fund has been increased from 20% to 25% (Section 9A of the 1961 Act/Section 9 and Schedule I of the 2025 Act)
3.7 The provision giving guidelines issued by the CBDT, the binding impact has been removed (Section 9B of the 1961 Act/Section 8 of the 2025 Act)
3.8 A term defined in Central Acts relating to taxes or other central laws can be considered for interpreting the term used in a treaty (Sections 90 and 90A of the 1961 Act/Section 159(7) of the 2025 Act)
4
FIVE HEADS FOR COMPUTATION OF INCOME
4.1 Overview of differences in the provisions relating to the five heads of income in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
4.2 No deduction to be allowed for entertainment allowance to any employee (Section 16(ii) of the 1961 Act/Section 19 of the 2025 Act)
4.3 Certain payments are excluded from the definition of “profits in lieu of salary” [Section 17(3)(ii) of the 1961 Act/Section 18(2) of the 2025 Act]
4.4 Transfer of “any house property” for inadequate consideration v Transfer of “any property” for inadequate consideration [Section 27(i) of the 1961 Act/Section 25(a) of the 2025 Act]
4.5 Changes in the charging provision for the profits and gains from business and profession [Section 28 of the 1961 Act/Section 26 of the 2025 Act]
4.6 Changes in the provision for claiming deduction for depreciation [Section 32 of the 1961 Act/Section 33 of the 2025 Act]
4.7 Procedural aspects relating to making an application by scientific research institutions shall be prescribed by rules [Section 35 of the 1961 Act/Section 45 of the 2025 Act]
4.8 “Payment has actually been made” v. “Actually paid” [Explanation (iii) to Section 35ABB(1) of the 1961 Act/Section 52(7)(a) of the 2025 Act]
4.9 Provisions for the deduction for employee welfare expenses have been consolidated at one place
4.10 Proportionate deduction in case of non-exclusive use of assets [Section 38 of the 1961 Act/Section 28(2) of the 2025 Act]
4.11 Salary payment outside India or to a non-resident in India [Section 40(a)(iii) of the 1961 Act/Section 35(c) of the 2025 Act]
4.12 Use of the term ‘Asset’ v. ‘Capital asset’ while computing “actual cost” in certain cases [Section 43 of the 1961 Act/Section 39 of the 2025 Act]
4.13 Deduction for surcharge shall be allowed on an actual payment basis, and no need to furnish the evidence of payment with the return [Section 43B of the 1961 Act/Section 37 of the 2025 Act]
4.14 More provisions are added to the list, which shall not apply for the computation of income from the insurance business [Section 44 of the 1961 Act/Section 55 of the 2025 Act]
4.15 Maintenance of books of account [Section 44AA of the 1961 Act/ Section 62 of the 2025 Act] 1.43
4.16 Audit of books of account [Section 44AB of the 1961 Act/Section 63 of the 2025 Act] 1.47
4.17
4.18
More provisions are added to the list, which shall not apply to the computation of presumptive income of the business [Section 44AD of the 1961 Act/Section 58(1) of the 2025 Act]
More provisions are added to the list, which shall not apply to the computation of presumptive income of the specified professions [Section 44ADA of the 1961 Act/Section 58(1) of the 2025 Act]
4.19 Changes in the presumptive tax scheme for business of plying, hiring and leasing of goods carriage [Section 44AE of the 1961 Act/Section 58(1) of the 2025 Act]
4.20 More provisions are added to the list, which shall not apply to the computation of presumptive income of the shipping business [Section 44B of the 1961 Act/Section 61(1) of the 2025 Act]
4.21 Changes in the presumptive tax scheme for exploration business [Section 44BB of the 1961 Act/Section 61(1) of the 2025 Act]
4.22 More provisions are added to the list, which shall not apply to the computation of presumptive income of the airline business [Section 44BBA of the 1961 Act/Section 61(1) of the 2025 Act]
4.23 Changes in the presumptive tax scheme for civil construction business [Section 44BBB of the 1961 Act/Section 61(1) of the 2025 Act]
4.24 More provisions are excluded that shall not apply to the computation of presumptive income of the cruise shipping business [Section 44BBC of the 1961 Act/Section 61(1) of the 2025 Act]
4.25 Changes in the presumptive tax scheme for the business of providing services or technology for setting up electronics manufacturing facilities in India [Section 44BBD of the 1961 Act/Section 61(1) of the 2025 Act]
4.26 More provisions are added to the list, which shall not apply in respect of the deduction for head office expenditure in case of non-residents [Section 44C of the 1961 Act/Section 60(1) of the 2025 Act] 1.55
4.27 The drafting error in the charging provision for capital gains is corrected by including a reference to provisions providing exemption [Section 45(1) of the 1961 Act/Section 67(1) of the 2025 Act]
4.28 Deduction to be allowed for land revenue, local rates, or municipal taxes from other source income (Section 57(ii) of the 1961 Act/ Section 93(1)(c) of the 2025 Act)
4.29 Deductions for employee welfare expenses to be allowed on timely payment while computing income from other sources [Section 58(1A) & (2) of the 1961 Act/Section 94(2) of the 2025 Act]
5
SPECIAL TAX RATES
5.1 Overview of differences in the provisions relating to the special tax rates in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
5.2 Computation of depreciation in case of persons opting for concessional tax regimes [Section 115BA/115BAA/115BAB/ 115BAD/115BAE of the 1961 Act/Section 199/200/201/203/ 204/205 of the 2025 Act]
5.3 Removal of difficulty guidelines under the concessional tax regimes for manufacturing domestic companies and resident cooperative societies will not be binding on the assessee [Section 115BAB/115BAE of the 1961 Act/Section 201/204/205 of the 2025 Act]
5.4 A co-operative society is allowed to form a business by rehabilitation in the prescribed circumstances for the concessional tax regime [Section 115BAE(2)(a)(i) of the 1961 Act/Section 205(2)(a) of the 2025 Act]
5.5 Once the explanation by the assessee against ‘unexplained income’ is found unsatisfactory, the addition shall be made by the AO [Section 68 of the 1961 Act/Section 102 of the 2025 Act]
5.6 Addition for unexplained assets owned by or belonging to the assessee [Sections 69A and 69B of the 1961 Act/Section 104 of the 2025 Act]
5.7 Borrowing or repayment through bearer negotiable instruments is taxable as unexplained [Section 69D of the 1961 Act/Section 106 of the 2025 Act]
6
SEARCH, SEIZURE AND POWER OF AUTHORITIES
6.1 Overview of differences in the provisions relating to the search and seizure in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025 1.68
6.2 An authorised officer can now exercise the power to issue a summon during the course of a search action as well [Section 131(1A) of the 1961 Act/Section 246(2)(c) of the 2025 Act] 1.69
6.3 Changes in the provisions relating to search and seizure [Section 132 of the 1961 Act/Section 247 of the 2025 Act]
6.4 Monetary limit increased to call for Information in respect of any assessee who made certain payments [Section 133(4) of the 1961 Act/Section 252(1)(e) of the 2025 Act]
6.5 The statement of a person can be recorded on oath during the survey [Section 133A(3)(iii) of the 1961 Act/Section 253(5)(b) of the 2025 Act]
6.6 Joint Director is also an “income-tax authority” for the purposes of collecting certain information [Explanation to Section 133B of the 1961 Act/Section 254(4) of the 2025 Act]
ASSESSMENT PROCEEDINGS
7.1 Overview of differences in the provisions relating to the assessment proceedings in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
7.2 The time limit to furnish a special audit or inventory valuation report changed to six months from the end of the month of the direction [Proviso to Section 142(2C) of the 1961 Act/Section 268(10) of the 2025 Act]
7.3 Powers of the Valuation Officer are defined in the provision [Section 142A of the 1961 Act/Section 269 of the 2025 Act]
7.4 Team-based decision-making removed from the faceless scheme for inquiry and valuation [Section 142B(1)(c) of the 1961 Act/ Section 532(1) of the 2025 Act]
7.5 Relief from tax on income from retirement benefit account to be allowed during summary assessment [Section 143(1)(c) of the 1961 Act/Section 270(1)(c) of the 2025 Act]
7.6 Faceless assessment procedure to be laid down in rules [Section 144B(1) of the 1961 Act/Section 273(1) of the 2025 Act]
7.7 DRP to focus on the structure and content of directions instead of listing out specific items to consider [Section 144C(6) of the 1961 Act/Section 275(6) of the 2025 Act]
7.8 Direction by approving panel to invoke GAAR and finding or direction of the court is included in ‘information’ to initiate the reassessment [Section 148 of the 1961 Act/Section 280 of the 2025 Act]
7.9 No need to follow the procedure before issuing a notice for reassessment where a direction is given to invoke GAAR or a finding or direction given by the court [Section 148A of the 1961 Act/ Section 281 of the 2025 Act]
7.10 No limitation period to apply where a direction is given by the approving panel to invoke GAAR [Section 150 of the 1961 Act/ Section 283 of the 2025 Act]
7.11
Team-based decision-making removed from the faceless reassessment scheme [Section 151A of the 1961 Act/Section 532 of the 2025 Act]
7.12 Time limit to complete the assessment [Section 153 of the 1961 Act/Section 286 of the 2025 Act]
7.13
Team-based decision-making removed from the faceless rectification scheme [Section 157A of the 1961 Act/Section 532 of the 2025 Act]
7.14 An SLP under Article 136 of the Constitution of India shall be considered in the provision for avoiding repetitive appeals by the assessee [Section 158A of the 1961 Act/Section 375 of the 2025 Act]
7.15 Powers given to the Central Government to make faceless schemes for various provisions [Section 532 of the 2025 Act]
8
TDS AND TCS
8.1 Overview of differences in the provisions relating to TDS and TCS in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
8.2 Uniform threshold for deduction of tax is introduced for all payments of interest on securities [Section 193 of the 1961 Act/Table 1, Sl. No. 5(i) of Section 393(1) of the 2025 Act]
8.3 Exemption from deduction of tax from interest payable to a co-operative bank is omitted [Section 194A(3)(iii) of the 1961 Act/Table 4, Sl. No. 7 of Section 392(4) of the 2025 Act]
8.4 Tax to be deducted on payment or credit of interest on compensation awarded by the Motor Accidents Claims Tribunal [Section 194A(3)(ix) & (ixa) of the 1961 Act/Table 4, Sl. No. 7 of Section 392(4) of the 2025 Act]
8.5 A new provision is introduced to empower the CBDT to issue guidelines for the removal of difficulties in giving effect to the entire chapter of collection and recovery of tax [Section 400 of the 2025 Act] 1.100
8.6 Slight change in the threshold for TDS on payment in respect of a life insurance policy [Section 194DA of the 1961 Act/Table 1, Sl. No. 8(i) of Section 393(1) of the 2025 Act] 1.102
8.7 Slight change in the threshold for TDS on payment under National Saving Scheme policy [Section 194EE of the 1961 Act/Table 3, Sl. No. 6 of Section 393(3)] 1.102
8.8 Advertising services fall within the scope of “professional services” for TDS on commission or brokerage [Section 194H of the 1961 Act/Table 1, Sl. No. 1(ii) of Section 393(1) and Section 402(28)] 1.103
8.9 Expanding the definition of ‘rent’ for the purpose of TDS on payments made by certain individuals or HUFs [Section 194-IB of the 1961 Act/Table 1, Sl. No. 2(i) of Section 393(1) and Section 402(29)] 1.104
8.10 Tax to be deducted on credit or payment in case of compulsory acquisition of immovable property [Section 194LA of the 1961 Act/Table 1, Sl. No. 3(iii) of Section 393(1) of the 2025 Act] 1.105
8.11 No higher TDS rate & lower threshold on cash withdrawal for return defaulters [Section 194N of the 1961 Act /Table 3, Sl. No. 5 of Section 393(3)] 1.105
8.12 Certificate for deduction of TDS at lower rates extended to all TDS provisions [Section 197(1) of the 1961 Act/Section 395(1) of the 2025 Act] 1.106
8.13 No corresponding provision is introduced to enable notifying a scheme for processing of statements made by a person not being a deductor [Section 200A(3) of the 1961 Act/Section 399 of the 2025 Act] 1.107
8.14 In case of motor vehicle and notified goods, the tax is to be collected at the time of collection or debited to the account of the buyer [Section 206C(1F) of the 1961 Act/Table 1, Sl. No. 6(a) of Section 394(1)] 1.107
8.15 Reference to furnishing an invalid/wrong PAN has been omitted since it is covered under the main provisions [Section 206AA and Section 206CC of the 1961 Act/Section 397(2)(a) of the 2025 Act] 1.108
8.16 Time limit to furnish a correction statement of the TDS/TCS statement is reduced [Section 200(3) of the 1961 Act/Section 397(3) (f) of the 2025 Act] 1.108
9
RETURN AND APPEALS
9.1 Overview of differences in the provisions relating to the special tax rates in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
9.2 No updated return only on violation of specified laws [3rd proviso (c) to section 139(8A) of the 1961 Act/section 263(6)(c)(vi) of the 2025 Act]
9.3 Every order passed by the Commissioner (Appeals) or Joint Commissioner (Appeals) is appealable before ITAT [Section 253 of the 1961 Act/section 362 of the 2025 Act]
9.4 An Advance Ruling could be declared void for any misrepresentation [Section 245T of the 1961 Act/section 386 of the 2025 Act]
10
REGISTERED NON-PROFIT ORGANISATIONS
10.14 Compliances to be done by registered NPOs [Sections 347, 348, 349 and 350 of the 2025 Act]
10.15 Specified Violations [Section 351 of the 2025 Act]
10.16 Tax on Accreted Income [Section 352 of the 2025 Act]
10.17 Other Violations [Section 353 of the 2025 Act]
10.18 Approval for Donations [Section 354 of the 2025 Act]
MISCELLANEOUS
11.1 Overview of differences in the other provisions in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
11.2 No double deduction to be allowed for housing projects to AOP/ BOI and its members [Section 80A read with 80-IBA of 1961 Act/ Section 122 read with Section 142 of 2025 Act] 1.187
11.3 Removal of the phrase “Without Prejudice” from various penalty provisions [Section 271A/271AA/271AAD/271AAE/271H/271J/271K of the 1961 Act/Section 440/441/443/444/460/462/463 of the 2025 Act]
11.4 Prosecution for failure to furnish return of income in search cases shall be non-cognizable [Section 276CCC of the 1961 Act/Section 480 of the 2025 Act]
11.5 Definitions of ‘Electronic Mail’ and ‘Electronic Mail Message’ are inserted [Section 282 of the 1961 Act/Section 501 of the 2025 Act] 1.190
11.6 Meaning of ‘Registered Valuer’ is inserted [Section 287A of the 1961 Act/Sections 513 and 514 of the 2025 Act]
11.7 Income of a minor child arising ‘directly or indirectly’ will be clubbed with the income of the parent [Section 64(1A) of the 1961 Act/ Section 99(1) of the 2025 Act] 1.191
11.8 Removing ambiguity from the definition of “Associated Enterprise” [Section 92A of the 1961 Act/Section 162 of the 2025 Act] 1.192
11.9 Period to be excluded from the limitation period of assessment shall end on the date APA is entered into with the CBDT [Section 92CC(10) of the 1961 Act/Section 168(11) of the 2025 Act] 1.195
11.10 Expansion of reasonable cause provision (Section 273B of the 1961 Act/Section 470 of the 2025 Act) 1.195
11.11 Consequential changes in the provision requiring the person leaving India to obtain a Tax Clearance Certificate (Section 230 of the 1961 Act/Section 420 of the 2025 Act) 1.196
11.12 Due date to file a belated return is aligned with provisions granting relief from prosecution for failure to furnish return of income (Section 276CC of the 1961 Act/Section 479 of the 2025 Act)
11.13 Repeal and Savings provision repeals the 1961 Act and preserves the rights, liabilities, and proceedings already existing under [Section 536 of the 2025 Act] 1.198
DIVISION TWO
Words & Phrases Judicially defined and relevant under Income-tax Act, 2025
DIVISION THREE
Landmark Rulings of Supreme Court/High Courts relevant under Income-tax Act, 2025 Landmark Rulings of Supreme Court/High Courts relevant under Income-tax Act, 2025 3.3
TDS AND TCS
8.1 Overview of differences in the provisions relating to TDS and TCS in the Income-tax Act, 1961 vis-à-vis the Income-tax Act, 2025
a i
[see Para 8.2] b iii
[see Para 8.3] c
[see Para 8.4]
d
[see Para 8.5] ei
[see Para 8.6] f [see Para 8.7] g ii [see Para 8.8] h i [see Para 8.9]
i iii [see Para 8.10]
j[see Para 8.11]
k[see Para 8.12] l [see Para 8.13]
m a [see Para 8.14]
n a [see Para 8.15]
o f [see Para 8.16]
p see Para 8.17
q see Para 8.18
8.2 Uniform threshold for deduction of tax is introduced for all payments of interest on securities [Section 193 of the 1961 Act/ Table 1, Sl. No. 5(i) of Section 393(1) of the 2025 Act]
8.2-1 Provision of the 1961 Act
v Proviso
8.2-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.3 Exemption from deduction of tax from interest payable to a co-operative bank is omitted [Section 194A(3)(iii) of the 1961 Act/Table 4, Sl. No. 7 of Section 392(4) of the 2025 Act]
8.3-1 Provision of the 1961 Act iii
8.3-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act any co-operative society engaged in carrying on the business of banking (including a co-operative land mortgage bank)’
8.4 Tax to be deducted on payment or credit of interest on compensation awarded by the Motor Accidents Claims Tribunal [Section 194A(3)(ix) & (ixa) of the 1961 Act/Table 4, Sl. No. 7 of Section 392(4) of the 2025 Act]
8.4-1 Provision of the 1961 Act
8.4-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act ix ixa
8.5 A new provision is introduced to empower the CBDT to issue guidelines for the removal of difficulties in giving effect to the entire chapter of collection and recovery of tax [Section 400 of the 2025 Act]
8.5-1 Provision of the 1961 Act
8.5-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.6 Slight change in the threshold for TDS on payment in respect of a life insurance policy [Section 194DA of the 1961 Act/Table 1, Sl. No. 8(i) of Section 393(1) of the 2025 Act]
8.6-1 Provision of the 1961 Act
8.6-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.7 Slight change in the threshold for TDS on payment under National Saving Scheme policy [Section 194EE of the 1961 Act/ Table 3, Sl. No. 6 of Section 393(3)]
8.7-1 Provision of the 1961 Act
second proviso
8.7-2 Provision of the 2025 Act
8.8 Advertising services fall within the scope of “professional services” for TDS on commission or brokerage [Section 194H of the 1961 Act/Table 1, Sl. No. 1(ii) of Section 393(1) and Section 402(28)]
8.8-1 Provision of the 1961 Act
Explanation (i) professional services
Explanation (ii)
8.8-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.9 Expanding the definition of ‘rent’ for the purpose of TDS on payments made by certain individuals or HUFs [Section 194-IB of the 1961 Act/Table 1, Sl. No. 2(i) of Section 393(1) and Section 402(29)]
8.9-1 Provision of the 1961 Act
8.9-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act (either separately or together)
a
b (including factory building);
c land appurtenant to a building (including a factory building).
8.10 Tax to be deducted on credit or payment in case of compulsory acquisition of immovable property [Section 194LA of the 1961 Act/Table 1, Sl. No. 3(iii) of Section 393(1) of the 2025 Act]
8.10-1 Provision of the 1961 Act
8.10-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.11 No higher TDS rate & lower threshold on cash withdrawal for return defaulters [Section 194N of the 1961 Act /Table 3, Sl. No. 5 of Section 393(3)]
8.11-1 Provision of the 1961 Act
b -
8.11-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.12 Certificate for deduction of TDS at lower rates extended to all TDS provisions [Section 197(1) of the 1961 Act/Section 395(1) of the 2025 Act]
8.12-1 Provision of the 1961 Act
8.12-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
8.13 No corresponding provision is introduced to enable notifying a scheme for processing of statements made by a person not being a deductor [Section 200A(3) of the 1961 Act/Section 399 of the 2025 Act]
8.14 In case of motor vehicle and notified goods, the tax is to be collected at the time of collection or debited to the account of the buyer [Section 206C(1F) of the 1961 Act/Table 1, Sl. No. 6(a) of Section 394(1)]
8.14-1 Provision of the 1961 Act
8.14-2 Analysis of change in the 1961 Act vis-à-vis the 2025 Act
