Finance Acts

Amendment of section 40 In section 40 of the Income-tax Act, in clause (b), in sub-clause (v), in item (a), with effect from the 1st day of April, 2025,— (a)   for the letters and figures “Rs. 3,00,000”, the letters and figures “Rs. 6,00,000” shall be substituted; (b)   for the letters and figures “Rs. 1,50,000”, the letters and figures “Rs. 3,00,000” shall be substituted.

Amendment of section 37 In section 37 of the Income-tax Act, in sub-section (1), in Explanation 3, in clause (iii), for the words “outside India.”, the following shall be substituted with effect from the 1st day of April, 2025, namely:— “outside India; or (iv) to settle proceedings initiated in relation to contravention under such law as may be notified by the Central Government in the Official Gazette in this behalf.”.

Amendment of section 36 In section 36 of the Income-tax Act, in sub-section (1), in clause (iva), for the words “ten per cent”, the words “fourteen per cent” shall be substituted with effect from the 1st day of April, 2025.

Amendment of section 28 In section 28 of the Income-tax Act, after Explanation 2, the following Explanation shall be inserted with effect from the 1st day of April, 2025, namely:— ‘Explanation 3.— It is hereby clarified that any income from letting out of a residential house or a part of the house by the owner shall not be chargeable under the head “Profits and gains of business or profession” and shall be chargeable under the head “Income from house property”.’.

Amendment of section 16 In section 16 of the Income-tax Act, in clause (ia), the following proviso shall be inserted with effect from the 1st day of April, 2025, namely:— ‘Provided that in a case where income-tax is computed under clause (ii) of sub-section (1A) of section 115BAC, the provisions of this clause shall have effect as if for the words “fifty thousand rupees”, the words “seventy-five thousand rupees” had been substituted;’.

Amendment of section 13 In section 13 of the Income-tax Act, in sub-section (1), in clause (d), in the proviso, after clause (iii), the following clause shall be inserted with effect from the 1st day of October, 2024, namely:— “(iv) any asset referred to in sub-clauses (i), (ia) and (ii) of clause (b) of the third proviso to clause (23C) of section 10 or any accretion to the shares, forming part of the corpus mentioned in the said sub-clauses (i) and (ia) and voluntary contributions referred to in sub-clause (iv) of clause (b) of the said proviso.”.

Insertion of new section 12AC After section 12AB of the Income-tax Act, the following section shall be Inserted with effect from the 1st day of April, 2025, namely:— “12AC. Merger of charitable trusts or institutions in certain cases – Where any trust or institution registered under section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, merges with another trust or institution, the provisions of Chapter XII-EB shall not apply if— (a)   the other trust or institution has same or similar objects; (b)   the other trust or institution is registered under section 12AA or section 12AB or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be; and (c)   the said merger fulfils such conditions as may be prescribed.”.

Amendment of section 12AB In section 12AB of the Income-tax Act, for sub-section (3), the following sub-section shall be substituted with effect from the 1st day of October, 2024, namely:— “(3) The order under sub-section (1) shall be passed, in such form and manner as may be prescribed, within a period of,— (i)   three months calculated from the end of the month in which the application was received in case of clause (a); (ii)   six months calculated from the end of the quarter in which the application was received in case of sub-clause (ii) of clause (b); and (iii)   one month calculated from the end of the month in which the application was received in case of clause (c).”.

Amendment of section 12A In section 12A of the Income-tax Act, in sub-section (1), in clause (ac) with effect from the 1st day of October, 2024,— (a)   in sub-clause (ii),— (i)   after the words, figures and letters “under section 12AB”, the words, brackets, figures and letters “or approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10″ shall be inserted; (ii)   after the words “the period of the said registration”, the words “or approval, as the case may be,” shall be inserted; (b)   in sub-clause (iii),— (i)   after the words, figures and letters “under section 12AB”, the words, brackets, figures and letters “or provisionally approved under sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10″ shall be inserted; (ii)   after the words “period of the provisional registration”, the words “or provisional approval, as the case may be,” shall be inserted; (c)   after sub-clause (vi), the following proviso shall be inserted, namely:—     “Provided that where the application is filed beyond the time allowed in sub-clauses (i) to (vi), the Principal Commissioner or Commissioner may, if he considers that there is a reasonable cause for delay in filing the application, condone such delay and such application shall be deemed to have been filed within time;”.

Amendment of section 11 In section 11 of the Income-tax Act, in sub-section (7), with effect from the 1st day of April, 2025,— (a)   for the words, brackets, figures and letters “other than clause (1), clause (23C), clause (23EC), clause (46) and clause (46A) thereof”, the words, brackets, figures and letters “other than clause (1), clause (23C), clause (23EA), clause (23EC), clause (23ED), clause (46), clause (46A) and clause (46B) thereof” shall be substituted; (b)   in the first proviso,— (i)   for the portion beginning with the words “is notified under” and ending with the word, brackets and figures “clause (46)”, the words, brackets, figures and letters “is notified under clause (23EA) or clause (23EC) or clause (23ED) or clause (46)” shall be substituted; (ii)   after the words “whichever is later”, the words, figures, letters and brackets “, or, the 1st day of April of the previous year relevant to the assessment year for which the exemption is claimed under clause (46B) of the said section” shall be inserted; (c)   in the second proviso,— (i)   after the words “notification under”, the words, brackets, figures and letters “clause (23EA) or” shall be inserted; (ii)   after the words, brackets, figures and letters “clause (23EC) or”, the words, brackets, figures and letters “clause (23ED) or” shall be inserted.