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TMI BlogTax incentives to individuals who are enrolled in the Agnipath Scheme : Clause 125 of the Income Tax Bill, 2025 Vs. Section 80CCH of the Income Tax Act, 1961X X X X Extracts X X X X X X X X Extracts X X X X ..... lects the government's commitment to supporting military personnel through tax benefits, thereby encouraging participation in the scheme. The Agnipath Scheme, introduced by the Ministry of Defence, is a strategic move to bolster military recruitment and retention by offering financial incentives. Section 80CCH of the Income Tax Act, 1961, which was inserted by the Finance Act, 2023, mirrors Clause 125 in its intent and provisions. Both aim to offer tax deductions for contributions to the Agniveer Corpus Fund, thereby promoting the scheme and providing financial relief to the participants. This commentary will provide a detailed analysis of Clause 125 and compare it with Section 80CCH, highlighting similarities, differences, and potentia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Deduction for Individual Contributions: Sub-section (1) allows for a deduction of the entire amount paid or deposited by the individual in their account in the Agniveer Corpus Fund during the tax year. 3. Deduction for Government Contributions: Sub-section (2) provides for a deduction of the entire amount contributed by the Central Government to the individual's account in the Agniveer Corpus Fund. 4. Definitions: Sub-section (3) provides definitions for "Agnipath Scheme" and "Agniveer Corpus Fund," establishing the framework within which the deductions are applicable. Comparative Analysis with Section 80CCH of the Income Tax Act, 1961 Section 80CCH, as inserted by the Finance Act, 2023, is structurally and substantively simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent strategy for the armed forces by providing financial incentives. This can lead to increased enrolment in the Agnipath Scheme. 3. Compliance and Administration: Taxpayers will need to maintain records of contributions to the Agniveer Corpus Fund to claim deductions. The government will need to ensure that the administrative framework supports the seamless implementation of these provisions. 4. Policy Considerations: These provisions reflect a policy decision to integrate tax incentives with national security objectives. This alignment of fiscal policy with defense strategy underscores the government's commitment to both economic and security goals. Conclusion Clause 125 of the Income Tax Bill, 2025, and Section 80CCH of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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