Wealth edition 21-Jul-2025 to 27-july-2025
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2. Tedious TDS compliance
3. Faceless assessments issues
4. Belated returns & refund panic
5. Delay in appeals continues
6. Digital enforcement sans rights
7. Family ownership
The new Income Tax Bill , 2025 is touted as a long-overdue rewrite of the Income Tax Act , 1961. Tabled in Parliament on 13 February, it is leaner—nearly half the word count of the old Act—visually cleaner, and organised into schedules and tables for easy navigation. The Select Committee examining the Bill is likely to table its report on 21 July with 285 recommendations, as the monsoon session of Parliament begins.This brevity is welcome, but the real question is: has the law become easier to comply with, or just easier to read? For most salaried individuals, pensioners, HUFs, and small businesses—the bulk of India's taxpayers— clean language alone isn't enough. They seek a system that's truly easier: fewer hurdles, faster resolutions, and fairer treatment. Let's explore certain key areas that reveal the difference between surface-level simplification and real compliance ease.The Bill does try to replace certain complicated legal jargons with easier-to-understand English counterparts. It replaces the confusing dual year concepts of 'assessment year' and 'previous year' with a uniform 'tax year'. Similarly, 'notwithstanding anything' makes way for the simpler phrase 'irrespective of'. However, the Bill does little to demystify these provisions for average taxpayers.The brevity is mainly due to smart formatting. Long subsections, provisos and explanations have been recast into separate schedules and tables. While it improves readability, core legal complexities remain: e.g., bulky clauses of eligible saving and investment avenues in Section 80C of the existing Act are now part of Schedule XV, with a shorter main provision under Section 123 in the Bill—thus streamlining form, not substance.The Bill retains the substantive core of the existing Act. The five heads of income remain unchanged, as does the computational architecture. Key reliefs and thresholds, including the `12-lakh exemption in the new tax regime, are still there. This ensures continuity but also retains historical complexities. Areas like capital gains, holding periods, asset classification, overlapping exemptions under sections 54, 54EC, 54F, and fair market value (FMV) rules are untouched and navigating them demands expertise.The new tabular layout for tax deduction at source (TDS) provisions—listing rates, thresholds, and deductee types—reduces confusion, but procedural pain points persist. Refunds of excess TDS mistakenly deducted and deposited by deductors still require manual follow-up, suffer delays, and lack transparency. The Bill misses an opportunity to mandate automatic system-driven refunds for over-deductions.In the current Act, Section 144B outlines faceless assessment in legislative detail.But the new Bill relegates this whole framework to executive rule-making under Section 273. By making it a government-notified scheme instead of embedding it in the law, the Bill lowers parliamentary oversight. It may offer administrative flexibility but dilutes legislative sanctity and taxpayer protection. Faceless reassessments, appeals and penalty proceedings are similarly diluted, raising worries on transparency and legal sanctity.While Section 263 of the Bill, corresponding to Section 139 of the Act, mandates return filing by specified taxpayers on or before due date, it also adds a new category—any person seeking to claim a refund must now file their return by the due date. This requirement has no parallel in Section 139 of the current Act.Section 239 of the current law allows refund claims through any return filed as per Section 139, including belated or revised returns. In the new Bill, Section 263(1)(a)(ix) disqualifies returns filed after the due date from claiming refunds, thus barring belated or revised returns from claiming refunds. Unless clarified or amended, this provision is a regressive departure and risks unfairly denying refunds to honest but delayed filers.Taking cognizance of this, the Select Committee has reportedly recommended for the deletion of this clause.Under both laws, the Commissioner of Income Tax (Appeals) 'may' dispose of appeals within a year. In reality, it often takes 4-5 years. Refunds get stuck, and justice is delayed. The current draft of the Bill does not make this timeline mandatory.While strengthening enforcement by authorising access to digital footprint, cloud data, and personal devices, the Bill raises privacy concerns. Strong oversight and clear limits must check the powers given.Families today often share ownership and income. But the tax law still treats each individual in isolation, leading to misattributed income or unwanted clubbing. The Bill missed an opportunity to allow for declaration-based beneficial ownership or joint filings. While enforcement adapts to the digital era, compliance is stuck in the past.True simplification must entail easier TDS compliances and regime choices, faster refunds, timely appeals, privacy safeguards, and rules reflect real financial lives. Until these changes follow, the burden on honest taxpayers may remain largely unchanged.
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Time of India
22 minutes ago
- Time of India
Relief for these Property buyers and other taxpayers who got tax demand notice due to short deduction of TDS from in-operative PAN holders; Know more
What did the income tax department say? Where the amount is paid or credited from April 1, 2024 to July 31, 2025 and the PAN is made operative (as a result of linkage with Aadhaar) on or before September 30, 2025. Where the amount is paid or credited on or after August 1, 2025 and the PAN is made operative (as a result of linkage with Aadhaar) within two months from the end of the month in which the amount is paid or credited. What does this mean? How can property buyers get relief due to this circular? 'Inoperative PANs cannot be used for filing income tax returns (ITR) or conducting key financial transactions. This poses a challenge in cases such as property sales, where the seller's PAN is inactive due to non-linkage with Aadhaar. In such situations, the law mandates that the buyer must deduct TDS at 20% instead of the regular 1%. However, many buyers, unaware of the PAN status, end up deducting TDS at 1%, assuming compliance. This typically leads to a tax demand notice to the property buyer from the Income Tax Department for the shortfall of 19%.' Karundia explains how this relief works for those who short deducted TDS from April 1, 2024 to July 31, 2025: 'This benefit also applies to property buyers who failed to deduct TDS at the higher 20% rate from sellers with inactive PANs. For instance, if someone purchased a property on April 2, 2024, from a seller whose PAN was inoperative, the buyer was required to deduct TDS at 20% rather than the standard 1%. If they didn't and received a demand notice, the notice will be cancelled provided the seller activates their PAN by September 30, 2025.' Gupta explains how the relief works for those who short deducted TDS on or after August 1, 2025: The recent CBDT Circular No. 9/2025, issued on July 21, 2025, offers relief in such cases. It provides that no demand for short deduction will be raised if the deductee—i.e., the property seller—makes their PAN operative by linking it with Aadhaar within two months from the end of the month in which the payment was made. For example, if a property is purchased on August 2, 2025, from a seller with an inoperative PAN and the buyer deducts TDS at 1%, the buyer will not be penalized, provided the seller regularizes their PAN by October 31, 2025. Why did the income tax department give this relief? The Central Board of Direct Taxes vide Circular No. 03 of 2023 dated 28th March, 2023 had specified that the consequences of PAN becoming inoperative as per Rule 114AAA of the Income-tax Rules, 1962 shall take effect from 1st July, 2023 and continue till the PAN becomes operative. Further, Circular No. 06 of 2024 dated 23.04.2024 issued by the Board, provided relief to deductors/collectors from the applicability of higher TDS/TCS rates under section 206AA/206CC of the Income-tax Act, 1961 (hereinafter 'the Act') for transactions entered into upto 31.03.2024, where the PAN becomes operative (as a result of linkage with Aadhaar) on or before 31.05.2024. Several grievances have been received from the taxpayers that they are in receipt of notices intimating that they have committed default of 'shortdeduction/collection' of TDS/TCS while carrying out the transactions where the PANs of the deductees/collectees were inoperative. In such cases, as the deduction/collection has not been made at a higher rate, demands have been raised by the Department against the deductors/collectors while processing of TDS/TCS statements under section 200A or under section 206CB of the Act, as the case may be. The Income Tax Department has given relief to those income tax payers who got an income tax demand notice due to short deduction of TDS and short collection of TCS from those deductors and collectors, who have an in-operative PAN. An PAN will be termed in-operative, if it is not linked with income tax department said that all such tax demand notices issued due to short deduction/collection of the TDS/TCS, will be deleted, if the PAN is made operative again within a specified a circular dated July 21, 2025 the Income Tax Department said: "...There shall be no liability on the deductor/collector to deduct/collect the tax under section 206AA/206CC of the Act, as the case maybe, in the following cases:This circular says that those taxpayers who deducted TDS or collected TCS at a lower rate than otherwise prescribed for in-operative PAN cases will get relief from tax demand subject to the condition that the PAN is made operative within a specified circular mentions two different deadlines for giving this releif from short tax deduction and collection Accountant Ashish Karundia explains that numerous tax deductors and collectors have received TDS/TCS demand notices from TRACES for applying a lower tax rate on transactions involving taxpayers whose PAN was inactive at the time, often due to it not being linked with Aadhaar. "This circular issued on July 21, 2025, now provides relief in such situations. If the affected taxpayer activates their PAN by linking it with Aadhaar by September 30, 2025, any related short deduction or collection demands issued to the deductor or collector will be withdrawn."Karundia adds: 'Further, for transactions occurring on or after August 1, 2025, if the taxpayer's PAN becomes active within two months following the end of the month in which the transaction took place, the TDS/TCS demand will also be dropped. This second relief is not limited by the September 30 per Section 194-IA on property sales above Rs 50 lakh, buyers have to deduct TDS at 1% rate before making the payment to the sellers. However if the seller's PAN is in-operative then TDS at 20% rate is required to be deducted. The problem is in cases where the buyer deducted 1% TDS instead of 20% as it should be when the seller's PAN is in-operative. In such cases the property buyer will get income tax demand notice for 19% short deduction in TDS. This circular can give relief to such Accountant Mohit Gupta, partner, PNAM & Co. LLP, a chartered accountancy firm, says:ET Wealth Online has asked many chartered accountants about how this circular can give releif to property buyers, here's what they said:The Income Tax Department said this in the circular:The tax department said that to redress this grievance of taxpayers they partially modified the Circular No. 3 of 2023.
Indian Express
22 minutes ago
- Indian Express
Jagdeep Dhankhar draws curtains on a stormy Rajya Sabha run
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He made this statement as the Opposition benches continued to demand the PM's presence in the Rajya Sabha to address them on the issue of violence in Manipur. The ties between the Rajya Sabha Chairman and the Opposition hit a low during the Winter Session last year when 146 MPs were suspended from both Houses of Parliament, mostly over their demand for Union Home Minister Amit Shah's statement on a Parliament security breach, followed by a discussion on the matter. It was the highest-ever number of suspensions in a Parliament session. As the proceedings came to a halt, Dhankhar wrote to Congress president Mallikarjun Kharge, the Leader of the Opposition (LoP) in the Upper House, about the 'acrimony and disruptions'. Kharge replied saying that 'he was firmly in favour of dialogue and discussion'. In his letter, Dhankhar highlighted that the latter's 'refusal to meet him to resolve the political stalemate' was 'not in sync with parliamentary practices' and sought a meeting. Kharge had declined Dhankhar's invitation and in a letter said that the mass suspension of MPs was 'premeditated' and 'weaponised' by the ruling party to sabotage parliamentary practices. In June 2024, Dhankhar courted controversy after Kharge entered the Well of House during a protest against paper leaks, with Dhankhar saying this was the first time that a LoP had done such a thing and called it a 'stain' on Parliament. Kharge responded by saying he was trying to grab the attention of the Chairman who was looking towards the Treasury benches. In July 2024, Rajya Sabha MP Kapil Sibal questioned the manner in which the Upper House was being run by Dhankhar and claimed that in no country the presiding officer of a House 'frequently interrupts' members during their speeches. The same month, Dhankhar said the RSS has 'unimpeachable credentials' and Constitutional rights to contribute to the development of the nation. 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After that, he moved to state politics and was elected to the Rajasthan Assembly in 1993 from Kishangarh on a Congress ticket. He again tried his luck in the Lok Sabha elections in 1998 but lost from Jhunjhunu. Starting that year, Dhankhar served as a full-time senior advocate in the Supreme Court and in 2003 switched to the BJP. He advised the party on important legal matters.
The Print
35 minutes ago
- The Print
Par panel on new Income Tax Bill suggests changes in TDS refund claims, taxation of trusts
The Committee has recommended changes in the Income Tax Bill, 2025, which will replace the six-decade-old Income Tax Act, 1961. BJP Member Baijayant Panda, who headed the Select Committee of the Lok Sabha to scrutinise the Income Tax Bill, 2025, tabled the report in the Lower House. New Delhi, Jul 21 (PTI) A Parliamentary panel, which examined the new Income Tax Bill, on Monday suggested that the Finance Ministry allows individual taxpayers to claim TDS refunds by filing I-T returns after the due date without penalty, and exempt anonymous donations made to religious-cum-charitable trusts from taxation. The panel suggested that the ambiguity with regard to Non-Profit Organisations (NPOs), especially those with mixed charitable and religious objectives, for taxing anonymous donations should be removed. The Committee opposed taxing 'receipts' of NPOs as it contravenes the principle of real income taxation under the Income Tax Act. It recommended reintroducing the term 'income' to ensure only net income of NPOs is taxed. Observing that there is a 'significant divergence in the treatment of anonymous donations' to registered NPOs, the committee suggested that such donations should be exempt for religious as well as charitable trusts because many such entities have a hybrid nature. 'While the Bill's stated aim is textual simplification, the committee observe a critical omission concerning religious-cum-charitable trusts, which could have substantial adverse impacts on a large segment of India's NPO sector,' it noted. The Clause 337 of the Income Tax Bill, 2025, proposed a flat 30 per cent tax on anonymous donations received by all registered NPOs, with a narrow exemption extended only to those established wholly for religious purposes. This marks a stark departure from the current Section 115BBC of the Income-tax Act, 1961. The existing law provided a more comprehensive exemption: anonymous donations were not taxed if received by any trust or institution created or established wholly for religious and charitable purposes, unless such a donation was specifically directed towards a university, educational institution, hospital, or medical institution run by that same trust or institution. The existing provision legitimately recognises these 'religious-cum-charitable' entities as a distinct and valid class eligible for concessions on anonymous donations, understanding that such organisations often receive contributions through traditional means (like donation boxes) where donor identification is practically impossible. 'The committee strongly urge the reintroduction of a provision analogous to the explanation found in Section 115BBC of the 1961 Act,' the Select Committee report said. With regard to refund of TDS refund claims by individuals who are otherwise not required to file tax returns, the committee suggested removal of the provision in the Income Tax Bill that makes it mandatory for an assessee to file I-T returns within the due date. The committee observe that the current mandatory requirement to file a return solely for the purpose of claiming a refund could inadvertently lead to prosecution, particularly for small taxpayers whose income falls below the taxable threshold but from whom tax has been deducted at source. 'In such scenarios, the law should not compel a return merely to avoid penal provisions for non-filing. The committee, therefore, recommend to remove sub-clause (1)(ix) from Clause 263 to provide flexibility for allowing refund claims in cases where the return is not filed in due time,' it noted. PTI JD CS JD DR DR This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
