A Parliamentary panel is believed to have suggested redefining the power status of Income-Tax authorities regarding discovery and production of evidence. It has reportedly rearranged the definition of associated enterprises. However, it has not recommended including company secretary cost accountant in the definition of ‘accountant.’
The Select Committee, on Wednesday, adopted its report on the new Income-Tax Bill. The report will now be submitted to the Speaker, following which the government will consider the changes as suggested the by the committee. The government can exercise its discretion in accepting the changes, and after the Cabinet has approved the suggestions, the amended Bill will be moved in Parliament for consideration and passage. The Bill is part of the legislative business for the Monsoon Session starting on July 21.
The Select Committee’s amendments, believed to have been marked clearly in the revised draft, introduce important clarifications and expansions, particularly in definitions, procedural streamlining, and anti-avoidance provisions.
Accountant
The committee has reportedly not favoured any change in the definition of ‘accountant.’ This means the meaning of ‘accountant’ will be a Chartered Accountant as defined in under Chartered Accountants Act, 1949, and one who holds a valid certificate of practice. This also means that Cost Accountant will continue to be out of this definition. Earlier, professional bodies representing cost accountants and company secretaries had voiced concerns over their exclusion from the definition of accountant in the Income-Tax Bill 2025, a contention that was opposed by the Institute of Company Secretaries of India (ICSI).
Sources told businessline that efforts of the committee was to further simplify and finetune the language, and not suggest substantive changes in the government Bill. Yet, some important additions have been made to make the proposed law more effective. It is believed to have inserted one clause under Section 246 of the Bill. Accordingly, it has reportedly suggested that the Income-Tax authority will have the same powers as vested in a court under the Code of Civil Procedure, 1908, in case it is trying a suit.
The committee is believed to have further finetuned the definition of Associated Enterprises. Accordingly, ‘associated enterprise,’ in relation to another enterprise, means an enterprise which participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise. This includes an enterprise holding, directly or indirectly, shares carrying not less than 26 per cent of the voting power in the other enterprise. This also means one enterprise has advanced a loan to the other enterprise, and such loan constitutes not less than 51 per cent of the book value of the total assets of the other enterprise, or which guarantees not less than 10 per cent of the total borrowings of the other enterprise.
Not mere tweaks
The government is aiming to present an Income Tax Bill, 2025, that is not a mere set of tweaks in the earlier Income-Tax Act, but a comprehensive code that rewrites how income is taxed, who pays it, and how the system will be governed. The legislation spans everything from digital documentation to dispute resolution, international taxation to non-profit oversight, all tied together in a modernised architecture aimed at clarity, compliance, and control.
Through the new Bill, the government seeks to consolidate and simplify India’s fragmented and often arcane Income-Tax laws. The objective it to do away with the Income-tax Act of 1961, replacing it with a codified structure that reflects the economic realities and technological possibilities of today’s India.
