The Income Tax Bill 2025 - An Insight View

by D.P. Mittal

CONTENTS AT A GLANCE

Chapter 1-Income Tax Bill, 2025 - A Hurried Legislation

1.1 Introduction	1
1.2 Economic legislation and every major amendments in Income-tax Act preceded by Committee�s reports	2
1.3 Income-tax Bill, 2025 - Framed by Bureaucracy and not on the basis of an Expert Opinion	5
1.4 Ill digested Code in a frenzy of hurry	6
1.5 Income-tax Bill, 2025 based on Bureaucratic Opinion	7

Chapter 2-Income-tax Act Complex - A Myth

2.1 Introduction	17
2.2 Legislature allowed greater �play in the joints?	17
2.3 Complexity common features of all taxation laws	18
2.4 Administration of tax laws�Litigation not because of complexity	20
2.5 Tax administration	21
2.6 Administration of the Act-Public perception	23
2.7 High pitched assessments, erosion of tax base, proliferation of black money-reflective of the disease	24
2.8 Ostrich type approach	25

Chapter 3�Legal or Lay Language

3.1 Introduction

3.2 Tax laws believed complex being not drafted in a common man language

3.3 Plain and unambiguous language is delusion

3.4 Simple language may not appear simple to the court

3.5 Legislative drafting devices and technique sacrificed for sake of simplicity-confusion

3.6 Proviso - Function

3.7 Explanation Function

3.8 Draft Bill, 2025 enacted �explanations? as sub-sections

3.9 Placing qualifying and explaining expressions immediately after the clauses and not distantly away

3.10 �Irrespective of? in place of �notwithstanding?

3.11 Legislation in algebraic equations and symbols and not in words

3.12 Mathematical equations do not enact anything

3.13 Aggregation is not the total of all income but refers to income for which there is no source

3.14 Referential incorporation 42

Chapter 4�Income not to be Included in Total Income

4.1 Introduction	43
4.2 Schedule not a proper place	44
4.3 Central Government making rules	44
4.4 Income of political and electoral trusts	45

Chapter 5�Tax Year

5.1 Introduction	46
5.2 Substitution of tax year for the previous and the assessment year	46
5.3 Concepts of previous year and assessment year under the Income-tax Act, 1961	47
5.4 Liability to pay tax	47
5.5 Previous year (financial year) and assessment year are two necessary concepts	48
5.6 Income becoming taxable during financial year escape chargeability	48
5.7 Previous year and assessment year cannot be expressed by one expression, i.e., financial year	49

Chapter 6�Expenditure for Prohibited Purposes

6.1 Expenditure for purpose which is offence or prohibited-not allowed	50
6.2 Expenses related to income from lotteries, crossword, etc. [section 94(4)]	52

Chapter 7�Non-profit Organisations

7.1 Introduction	53
7.2 Property held in trust	54
7.3 Non-profit organisation � concept of total income and computation incompatible	56
7.4 Non-profit organisation is a person	56
7.5 Public trust is not a person or organisation but an obligation	56
7.6 Commercial activities	58
7.7 Determination of income business undertaking - No provision in the Act	60
7.8 Accreted income	61
7.9 Charitable purpose � definition	62

Chapter 8�Income-tax Act, 1961 be Retained

8.1 Introduction	64
8.2 The Indian Income-tax Act, 1961 - certain, clear and consistent	64
8.3 Two concepts even the Income-tax Bill, 2025 does not have answer	65
8.4 Best way to amend the tax laws is to retain the basic fabric of the Income-tax Act, 1961	66

About the Author

D.P. Mittal

D.P. Mittal-D.P. Mittal is an advocate, tax and business law consultant. He has authored about two hundred articles in Indian and foreign magazines and journals and also books on various law subjects; some of them are as follows: Interpretation of Taxing Statutes, Wills, Deeds and Documents; Laws relating to Copyrights, Patents, Trade Marks and GATT; Business and Commercial Laws; Law of Arbitration, ADR and Contract in India; Indian Patents Law; Natural Justice, Judicial Review & Administrative Law; Law of Trade Marks; Law of Information Technology (Cyber Law); Law of Arbitration (2002); Indian Patents Law and Procedure (2002); Trade Marks Passing off and Geographical Indications of Goods - Law and Procedure (2002); Competition Law; Law relating to Sick Industries; Interpretation of Statutes; Law Dictionary