Mr. Vivekanand, Director (Finance, Taxation & Legal), FIPI began the session with the opening remarks. He welcomed all the distinguished members and participants from oil and gas industry and experts from EY. He expressed his views on the new Income-tax Bill 2025 (ITB 2025) and said that while the current Income-tax Act, 1961 (ITA 1961) has been in play for more than six decades, due to ever-changing global and economic landscape, the ITB 2025 has been proposed in the Parliament. He said that the Bill aims to reduce the complexity of India’s current tax framework thereby simplifying the language of the direct tax laws, reducing litigation, and providing tax clarity to many individuals and businesses. Further he said that the new income tax bill along with other tax schemes such as Direct Tax Vivad Se Vishwas Scheme would be able to align with global best practices to attract foreign investment, support domestic businesses, and benefit individual taxpayers. He concluded by saying that the new Bill represents a significant overhaul of the existing tax framework, promising to bring much-needed clarity and efficiency to India's tax system. He encouraged participants to put forward their practical issues/experiences to the expert members of EY for a healthy interactive discussion.

Ms. Neetu Vinayek, Partner at EY, initiated the session on the Bill. She mentioned that after the Honourable Finance Minister, Smt. Nirmala Sitharaman, announced a review of the ITA during the budget speech on July 23, 2024, a Departmental Committee was formed. The ITB, 2025, introduced in Lok Sabha on February 13, 2025, is set to take effect from April 1, 2026, for the tax year 2026-27. The Bill aims to modernize tax administration through

• Simplification of language


• Reducing litigation


• Reducing compliance burden


• Removing redundant provisions

She then talked about the design and framework of the new Bill. She said that the new bill has reduced the number of sections and nearly halved word count. Further, there has been streamlining of multiple provisions by moving them into distinct schedules where necessary to reduce verbosity. She mentioned that the dual concept of “previous year” and “assessment year” has been replaced with “tax year” and certain phrases e.g., “Notwithstanding anything contained” have been replaced with “Irrespective of anything contained.” Further, simplified cross-reference system between provisions have also been ensured in the new Tax bill.

She then talked about the major clauses of the new Bill. She said that while in ITA 1961, if the subsidy is not for meeting actual cost of asset directly or indirectly then it is not covered under explanation 10 to section 43(1) and cannot reduce from actual cost of the asset due to presence of multiple judicial precedents, however under ITB 2025, it will be possible to reduce it from actual cost of asset on pro-rata basis. Further, change of ‘registered’ owner who represents the true owner does not trigger section 79, for example, if shares are held by Government, change in registered owner upon change of President who represents Government is not the change which triggers section 79.

Further she said that, in case of BEPS 2.0, withdrawal of 2% equalisation levy was done by India to align itself with the OECD’s pillar one and pillar two solutions. While it was in the news that the government has “positive approach” towards the OECD tax deal and that it intends to adopt the two-pillar solution. However, no roadmap or amendments were proposed in ITB 2025 in relation to adoption of Pillar Two.

Further, she pointed out that prior to amendment to the ITA 1961 made vide Finance Act 2018, Section 9 provided that the income of a dependent agent would constitute a Dependent Agent Permanent Establishment (DAPE) in India, unless the activities of dependent agent were limited to the purchase of goods or merchandise. The exclusion of purchase related activities was deleted vide Finance Act 2018. Hence there was an ambiguity as to whether the general purchase exclusion contained in explanation 1 to Section 9(1)(i) would extend to the activities of DAPE in India.  But now with the general exclusion provided under the ITB 2025 with respect to any business connection in India for purchase exclusion also appear to make it clear that the purchase exclusion would be available even in respect of activities of a dependent agent in India.

In addition, she highlighted that the Government has introduced a series of measures aimed at enhancing the competitiveness and attractiveness of units in International Financial Services Centres (IFSC), GIFT City. The key proposals which were introduced vide the Finance Bill 2025 which are also contained in the ITB 2025 include extending sun-set dates for availing tax concessions, granting exemptions for insurance intermediary offices, and providing tax relief for ship leasing units in IFSCs.

Looking at the impact on the oil and gas sector, in case of Site Restoration Fund, she said that under the existing provisions under ITA 1961, the amount utilized out of specified account for purchase of specified assets is not eligible for deduction. However, under ITB 2025, utilization of funds for purchase of specified assets will be considered as deemed profit and gains for that tax year.

Mr Hiten Sutar, Partner, EY highlighted that the ITB 2025 has omitted the deduction for inter-corporate dividends for companies opting for the concessional tax regime of 22 %, which is allowed under the Income Tax Act 1961. He pointed out that such benefit continues for the concessional tax regime (15%) for new domestic manufacturing companies in the ITB 2025. He also mentioned that under ITA 1961, Section 28(iiia) to (iiie) covered special type of export incentives i.e. import license, cash assistance under any government scheme, duty drawbacks, Duty Entitlement Pass Book (DEPB), and Duty-Free Replenishment Certificate. However, ITB 2025 proposes to expand the scope to cover “any other export incentives” as well.  Further he said that under Section 40(a)(ii) of ITA 1961, any taxes or rates levied on profits and gains of any business / profession is not allowed as deduction. However, in case of ITB 2025, while the tax position remains the same, it clarifies by replacing the term ’profits and gains’ with ’income’.

Further he said that presently in ITA 1961, there are various provisions relating to TDS/ TCS, wherein different rates and thresholds have been provided depending on the nature of payment or status of payees. The new bill proposes to comprehensively overhaul the structure with an aim to streamline these provisions by consolidating them into a single section (except for TDS on salary) wherein all TDS provisions are categorized into three broad heads as follows:

• TDS on payments to resident


• TDS payments to non-resident and


• TDS on payments to any person (viz. resident or non-residents, both)

Lastly, in case of transfer pricing, he said that overall transfer pricing (TP) framework remains the same in the new Bill. Few modifications to the language are proposed, which are clarificatory in nature and no changes are proposed in the timelines, compliances, procedural aspects, and penalty provisions.

The participants raised number of queries/issues faced by them during the presentation which were well addresses by panellists. The session was very interactive as many queries raised by the participants were resolved by the EY team.

From the industry side, Mr. Vishnu Mishra, CGM (taxation), BPCL in his vote of thanks, complimented EY for providing a comprehensive presentation on the topic. He appreciated the approach and understanding of EY experts towards the subject and said that the same helped the members present from the oil and gas industry to enhance their understanding in the subject.  He also thanked FIPI for organising such an engaging session. Last but not the least, he thanked the participants from the energy industry for their active participation during the event.

Click here to view the presentation