Income Tax Bill 2025 Clause 447 imposes one lakh rupee penalty for missing accountant's report under section 172
The Income Tax Bill 2025's Clause 447 introduces a penalty provision for failure to furnish an accountant's report under section 172, imposing a fixed penalty of one lakh rupees. This provision mirrors the existing Section 271BA of the Income-tax Act 1961, which penalizes non-submission of accountant's reports under section 92E for transfer pricing matters. Both provisions grant discretionary authority to Assessing Officers to impose penalties and use identical penalty amounts. The new clause aims to ensure compliance with statutory reporting requirements, promote transparency, and deter non-compliance through monetary penalties, continuing the legislative trend toward robust compliance frameworks in complex tax matters.

Income Tax Bill 2025 Clause 446 sets penalties for missing audit requirements under Section 63
The Income Tax Bill 2025's Clause 446 imposes penalties for failure to get accounts audited or furnish audit reports as required under section 63. The penalty is the lesser of 0.5% of total sales, turnover, or gross receipts, or Rs. 1,50,000. This provision largely mirrors existing Section 271B of the Income-tax Act 1961, maintaining the same penalty structure and triggers. Key differences include updated terminology using "tax year" instead of "previous year" and cross-reference to section 63 rather than section 44AB. The provision grants Assessing Officers discretionary authority to impose penalties, though it lacks explicit "reasonable cause" exceptions, potentially indicating stricter enforcement under the modernized framework.

Non-profit organizations face 100-200% penalties under Clause 445 for diverting income to related persons
Clause 445 of the Income Tax Bill, 2025 imposes penalties on registered non-profit organizations that divert income for the benefit of related persons, similar to Section 271AAE of the Income Tax Act, 1961. The provision establishes a two-tier penalty structure: 100% of the diverted amount for first violations and 200% for subsequent violations. It covers both direct and indirect benefits to related persons as defined in section 355(i). The penalty is triggered when specified income becomes chargeable to tax under section 337. This strict liability provision aims to prevent misuse of tax exemptions and ensure charitable funds serve their intended purposes, reflecting the legislature's commitment to robust oversight of the non-profit sector.

Income Tax Bill 2025 Clause 444 maintains same penalties as Section 271AAD for false accounting entries
The Income Tax Bill 2025's Clause 444 and the existing Section 271AAD of the Income-tax Act 1961 both penalize false accounting entries and omissions made to evade tax liability. Both provisions impose penalties equal to the aggregate amount of false or omitted entries and extend liability to third parties who cause such entries. The provisions define false entries to include forged documents, invoices without actual supply/receipt, and invoices involving non-existent persons. Clause 444 represents legislative continuity with minimal changes from Section 271AAD, maintaining the same penalty structure and authority distribution among tax officers while consolidating the policy framework for the new tax regime.

Income Tax Bill 2025 Clause 443 imposes 10% penalty on undisclosed income under sections 102-106
The Income Tax Bill 2025's Clause 443 imposes a 10% penalty on tax payable for undisclosed income under sections 102-106, including unexplained cash credits, investments, and expenditures. This provision mirrors Section 271AAC of the 1961 Act but updates cross-references and terminology. The penalty applies when authorities determine such income exists, with exceptions for voluntary disclosure in returns with timely tax payment. The clause prevents double penalties and incorporates procedural safeguards. Both provisions aim to deter tax evasion while encouraging compliance through voluntary disclosure mechanisms.

Income Tax Bill 2025 Clause 442 imposes 2% penalty on transaction value for transfer pricing documentation failures
The Income Tax Bill 2025's Clause 442 establishes penalties for documentation failures in international and specified domestic transactions, mirroring Section 271AA of the Income-tax Act 1961. The provision imposes a 2% penalty on transaction value for failing to maintain required documentation, failing to report transactions, or furnishing incorrect information. Additionally, a flat penalty of five lakh rupees applies for non-furnishing of information. The clause maintains identical penalty structure and quantum as existing law, ensuring continuity in transfer pricing compliance enforcement while updating section references to align with the restructured legislation.

Income Tax Bill 2025 Clause 441 sets twenty-five thousand rupee penalty for failing to maintain required books and documents
The Income Tax Bill 2025's Clause 441 imposes a fixed penalty of twenty-five thousand rupees for failure to keep, maintain, or retain books of account and documents as required under section 62 or relevant rules. The provision empowers Assessing Officers, Joint Commissioners, or Commissioners to impose penalties. This largely mirrors Section 271A of the current Income-tax Act 1961, maintaining the same penalty amount and authorities. However, Clause 441 omits the "without prejudice" clause found in Section 271A, potentially creating interpretative issues regarding overlap with other penalty provisions. Both provisions operate on strict liability principles without reasonable cause exceptions.

Income Tax Bill 2025 Clause 440 offers immunity from penalties and prosecution for compliant taxpayers
The Income Tax Bill 2025's Clause 440 introduces an immunity mechanism allowing assessees to avoid penalties and prosecution by meeting specific conditions. An assessee can apply to the Assessing Officer within one month of receiving an assessment order if they have paid all tax and interest due and filed no appeal. The Assessing Officer must grant immunity after the appeal period expires, except in cases involving serious infractions under section 439(11). The application must be disposed of within three months with opportunity for hearing. If immunity is granted, no further appeal or revision against the assessment order is permitted. This clause largely mirrors Section 270AA of the current Income-tax Act 1961, with updated cross-references to new provisions, maintaining the policy of incentivizing voluntary compliance while preserving deterrent effects for egregious cases.

Income Tax Bill 2025 Clause 439 maintains 50% penalty for under-reporting and 200% for misreporting income
The Income Tax Bill 2025's Clause 439 largely mirrors Section 270A of the Income-tax Act 1961, establishing penalties for under-reporting and misreporting income. Both provisions impose 50% penalty for under-reporting and 200% for misreporting, using formula-based calculations to reduce arbitrariness. The clause defines seven scenarios constituting under-reporting, provides exceptions for bona fide explanations and voluntary disclosures, and distinguishes between inadvertent errors and deliberate falsification. Key differences include updated cross-references to new sections and minor variations in exclusions. The provision maintains procedural safeguards requiring written orders and prevents double penalization, continuing the objective, deterrent-focused approach while ensuring fairness in tax enforcement.

Income Tax Bill 2025 Clause 189 defines banking terms for high-value property transactions to combat tax evasion
Clause 189 of the Income Tax Bill, 2025 introduces definitions for terms related to payment modes in high-value transactions, particularly immovable property transfers. The provision defines "banking company" as entities under Banking Regulation Act, 1949, "specified sum" as money receivable in property transfers regardless of completion, and "specified advance" as advance payments for property transactions. These definitions largely mirror Section 269T of the Income-tax Act, 1961, maintaining continuity while potentially expanding regulatory scope. The clause aims to combat tax evasion by ensuring uniform interpretation of anti-evasion measures and facilitating restrictions on cash transactions in real estate dealings.

Income Tax Bill 2025 Clause 188 prohibits cash loan repayments above twenty thousand rupees
The Income Tax Bill 2025's Clause 188 regulates repayment modes for loans, deposits, and specified advances, succeeding Section 269T of the Income Tax Act 1961. It prohibits cash repayments above twenty thousand rupees by banking companies, cooperative banks, other companies, firms, and individuals. Permitted modes include account payee cheques, bank drafts, electronic clearing systems, and prescribed electronic modes. The provision uses aggregation mechanisms to prevent circumvention through transaction splitting. Exemptions apply to government entities, banking companies, and notified institutions. Agricultural credit societies receive enhanced thresholds of two lakh rupees. The clause aims to enhance transaction transparency, prevent tax evasion, and promote digital payments while maintaining structural similarity to existing provisions.

Businesses with Rs. 50 crore turnover must accept electronic payments under Income Tax Bill Clause 187
Clause 187 of the Income Tax Bill, 2025 mandates businesses with sales, turnover, or gross receipts exceeding Rs. 50 crore in the preceding tax year to provide facilities for accepting payments through prescribed electronic modes. This provision succeeds Section 269SU of the Income Tax Act, 1961, maintaining similar language and structure while promoting digital payments and reducing cash transactions. The clause requires businesses to offer prescribed electronic payment options in addition to any existing electronic modes, with specific modes to be determined through subordinate legislation. The measure aims to enhance transparency, combat tax evasion, and support domestic payment systems like RuPay and BHIM-UPI, continuing the government's push toward a digital economy.

Income Tax Bill 2025 Clause 186 prohibits cash receipts above two lakh rupees except through banking channels
Clause 186 of the Income Tax Bill, 2025 continues the regulatory approach of Section 269ST of the Income Tax Act, 1961, by prohibiting cash receipts of two lakh rupees or more except through specified banking channels. The provision applies to aggregate receipts from a person in a day, single transactions, and transactions relating to one event or occasion. Permitted modes include account payee cheques, bank drafts, electronic clearing systems, and prescribed electronic modes. Exemptions exist for government entities, banking companies, post office savings banks, cooperative banks, and other notified persons. The clause aims to combat tax evasion, promote digital payments, and enhance transaction transparency while maintaining policy continuity with existing legislation.

Income Tax Bill 2025 Clause 185 prohibits cash transactions above Rs 20,000 to prevent tax evasion
Clause 185 of the Income Tax Bill, 2025 replaces Section 269SS of the Income-tax Act, 1961, maintaining the same anti-evasion framework. The provision prohibits accepting loans, deposits, or specified sums exceeding twenty thousand rupees in cash, requiring transactions through account payee cheques, bank drafts, electronic clearing systems, or prescribed electronic modes. Key exceptions include government entities, banking companies, corporations, and agricultural transactions between parties with only agricultural income. The threshold increases to two lakh rupees for primary agricultural credit societies. The provision targets tax evasion and promotes transparency by ensuring traceable financial transactions, particularly in real estate through inclusion of property advances as "specified sum."

Income Tax Bill 2025 Clause 374 redefines High Court jurisdictions for tax appeals, updating territorial boundaries post-2019 reorganization
Clause 374 of the Income Tax Bill, 2025 defines "High Court" for tax appeals, updating the definition from Section 269 of the Income-tax Act, 1961. The new clause reflects current territorial realities, including post-2019 reorganization of territories into Union Territories and merged territories. It designates specific High Courts for each State and Union Territory, such as the High Court of Punjab and Haryana for territory, High Court at Calcutta for territory, and High Court of Kerala for territory. The provision eliminates ambiguity by providing comprehensive, up-to-date jurisdictional references, replacing outdated nomenclature and removing references to reorganized territories, ensuring clarity for taxpayers and practitioners in determining appropriate appellate forums.

Income Tax Bill 2025 Clause 373 modernizes appeal limits while maintaining core protections against frivolous litigation
The Income Tax Bill 2025's Clause 373 and the current Income Tax Act 1961's Section 268A both regulate appeals filed by tax authorities. These provisions empower the Central Board of Direct Taxes to set monetary limits for filing appeals, preventing litigation in low-revenue cases. Key protections include: non-filing of appeals in one case doesn't preclude appeals in other cases involving the same taxpayer or different taxpayers; taxpayers cannot claim the tax authority acquiesced by not filing appeals; and appellate forums must consider the Board's instructions when hearing appeals. The 2025 Bill modernizes language by removing references to obsolete "application for reference" procedures and changing "assessment year" to "tax year," while maintaining core policy objectives of reducing frivolous litigation and ensuring administrative consistency.

Income Tax Bill 2025 Clause 372 maintains identical appeal limitation provisions from current Section 268
The Income Tax Bill 2025's Clause 372 maintains identical provisions to Section 268 of the Income-tax Act 1961, addressing limitation period computation for appeals and applications. Both provisions exclude the service date and time required to obtain order copies from statutory limitation periods when copies aren't provided at service. This ensures procedural fairness by preventing assessees from being disadvantaged by administrative delays in accessing order contents. The provision applies to all appeals and applications under the Act, reflecting legislative commitment to effective remedies. Minor language modernization occurs with "provided" replacing "furnished" and "required" replacing "requisite," but legal effect remains unchanged. The continuity demonstrates legislative satisfaction with existing procedural safeguards in tax litigation.

Income Tax Bill 2025 Clause 371 allows assessment amendments for members after collective entity appeals
Clause 371 of the Income Tax Bill 2025 addresses amendment of assessments for members of bodies of individuals or associations of persons following appellate proceedings. When appeals under sections 356, 357, or 362 result in changes to the collective entity's assessment or direct new assessments, the Joint Commissioner, Commissioner, or Appellate Tribunal must authorize the Assessing Officer to amend or make fresh assessments for affected members. This provision mirrors Section 267 of the Income Tax Act 1961 but updates appellate section references to reflect the new legislative structure. The mandatory authorization requirement ensures procedural safeguards while maintaining equity between collective and individual tax liabilities.

Income Tax Bill 2025 Clause 370 maintains existing framework for enforcing Supreme Court cost awards through High Courts
The Income Tax Bill 2025's Clause 370 establishes procedural mechanisms for executing Supreme Court cost awards in tax matters. The provision allows High Courts to receive petitions for executing Supreme Court cost orders and transmit them to subordinate courts for enforcement. This clause is identical to Section 266 of the Income-tax Act 1961, indicating legislative satisfaction with the existing framework. The provision ensures Supreme Court authority is maintained through effective local enforcement, prevents cost orders from becoming unenforceable, and provides successful litigants with clear recovery mechanisms. The unchanged language suggests the mechanism has operated effectively without significant litigation or interpretative difficulties in practice.

Income Tax Bill 2025 Clause 369 requires tax payment despite pending appeals unless courts order stay
The Income Tax Bill 2025's Clause 369 mandates tax payment according to assessment orders regardless of pending appeals before High Court or Supreme Court. This provision succeeds Section 265 of the Income-tax Act 1961, maintaining the principle that appeals do not automatically stay tax collection unless specifically ordered by courts. The updated clause omits references to "reference" proceedings, reflecting modern appellate procedures where references have been largely phased out. Both provisions balance taxpayer appeal rights with government revenue collection interests, requiring taxpayers to actively seek judicial stay if they wish to defer payment during appeals. The core obligation remains unchanged despite linguistic modernization.