📌 DIRECT TAX PROPOSALS – KEY POINTERS
• New Income Tax Act to come into force from 1 April 2026
• Simplified tax rules and forms to be notified shortly
• Forms redesigned for easy compliance by ordinary taxpayers
• Interest awarded by Motor Accident Claims Tribunal to natural persons to be exempt from income tax
• TDS on such interest to be completely removed
• TCS on overseas tour packages reduced:
• From 5% / 20% → 2% (no threshold)
• TCS on remittances for education & medical purposes:
• Reduced from 5% → 2%
• Supply of manpower services specifically included under contract payments to remove ambiguity
• TDS rate on such services capped at 1% / 2%
• TCS on alcohol, scrap, minerals rationalised to 2%
• TCS on tendu leaves reduced from 5% → 2%
• Role-based automated process for lower / nil TDS certificates
• No physical application before Assessing Officer required
• Form 15G / 15H:
• To be submitted once and shared digitally with multiple companies
Filing & Revision of Returns
• Time limit for revising return extended till 31st March
• Earlier: 31st December
• Subject to nominal fee
• Staggered due dates:
• ITR-1 & ITR-2: 31st July
• Non-audit cases / trusts: 31st August
Non-Resident Transactions
• TDS on sale of immovable property by non-resident:
• To be deposited through resident buyer
• Using PAN-based challan
• TAN requirement removed
One-Time Foreign Asset Disclosure Scheme (6 months)
Applicable to students, young professionals, small taxpayers
Category A
• Undisclosed income / asset up to ₹1 crore
• Pay:
• 30% tax + 30% penalty
• Immunity from prosecution
Category B
• Asset value up to ₹5 crore
• Pay:
• ₹1 lakh fee
• Full immunity from penalty & prosecution
Litigation & Penalty Reforms
• Assessment & penalty proceedings to be combined into single order
• No interest on penalty amount during appeal
• Pre-deposit reduced from 20% → 10%
• Taxpayers allowed to update returns even after reassessment begins
• Additional tax: 10% extra
Prosecution Decriminalisation
• Technical defaults converted into fees instead of penalties
• Minor offences → fine only
• Serious offences:
• Simple imprisonment
• Max term reduced to 2 years
• Non-disclosure of foreign assets below ₹20 lakh:
• Immunity with retrospective effect from 1 Oct 2024
Cooperative Sector Relief
• Deduction extended to cooperative societies supplying:
• Cattle feed & cotton seed
• Inter-cooperative society income:
• Allowed as deduction if distributed to members
• Dividend exemption (3 years) for notified national cooperative federations
• Only if passed on to member cooperatives
IT & ITeS Sector Boost
• All IT, ITeS, KPO, R&D services grouped under single IT services category
• Safe harbour margin: 13.5%
• Turnover limit raised:
• ₹300 crore → ₹2,000 crore
• Automated approval — no officer discretion
• Safe harbour valid for 5 years
• Fast-track APA:
• Completion within 2 years (+6 months extension)
Global Investment & Manufacturing
• Tax exemption till 2047 for foreign cloud service companies using Indian data centres
• 15% safe harbour for related-party data centre services
• 2% margin safe harbour for component warehousing
• 5-year tax exemption for non-residents supplying capital goods to Indian manufacturers in bonded zones
Global Talent Incentive
• Exemption on foreign-sourced income of non-resident experts
• Valid for 5 years under notified schemes
• MAT exemption for non-residents taxed on presumptive basis
Accounting & Compliance Simplification
• ICDS to be merged into Indian Accounting Standards
• Separate ICDS compliance to be abolished from AY 2027-28
• Definition of “Accountant” rationalised
By: via 🇮🇳AlliesFinServe #StockMarket #Bharat Telegram.me/AlliesFin
