Expenditure Disallowance Rules Simplified: Section 14A Gets Modern Language and Clearer Structure in Tax Bill 2025

Comparative analysis of expenditure disallowance provisions between Income Tax Bill 2025 and Income Tax Act 1961 reveals significant modernization while maintaining core principles. The 2025 Bill restructures Section 14A with clearer language, replacing "Notwithstanding" with "Irrespective of" and streamlining the Assessment Officer's powers into two distinct scenarios. Key changes include removal of reassessment provisions, elimination of retrospective application clause, and adoption of simplified terminology using "tax year." The Bill enhances administrative efficiency by maintaining fundamental disallowance principles while reducing interpretational ambiguity through more direct language and clearer structuring. Notable omissions include specific references to Sections 147 and 154, and the removal of the Explanation section, indicating a shift toward prospective application. .....

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