Income-tax Bill 2025 defines political party, electoral trust incomes

It defines how different types of income (such as salaries, business profits, and capital gains) are calculated, taxed, and exempted.

Who it concerns: Individuals, Hindu Undivided Families (HUFs), companies, firms, associations, political parties, and non-residents who have income accruing or arising in India.

What the bill does

• Defines the scope of total income and residence in India.
• Establishes rules for computing income from salaries, house property, business/profession, capital gains, and other sources.
• Specifies deductions for expenses like life insurance, health insurance, education loans, and electric vehicle purchases.
• Sets rules for setting off and carrying forward losses across different heads of income.
• Includes provisions for double taxation relief and agreements with foreign countries.
• Establishes rules for transfer pricing and arm's length pricing for international transactions.
• Introduces a General Anti-Avoidance Rule to tax impermissible avoidance arrangements.
• Mandates specific modes of payment (electronic) for certain loans and transactions.
• Provides for a new tax regime for individuals, HUFs, and certain domestic companies.

Also in the document

• The Bill includes specific provisions for incomes of political parties and electoral trusts.
• It contains special provisions for businesses in Special Economic Zones, North-Eastern States, and Offshore Banking Units.
• The Bill addresses taxation of income from Global Depository Receipts and foreign exchange fluctuations.