The Central Board of Direct Taxes on Friday notified the Income-tax Rules, 2026, laying down the operational framework for the revamped Income-tax Act, 2025, which comes into force from April 1.

The new rules introduce enhanced tax benefits for salaried individuals claiming house rent allowance (HRA), while simultaneously tightening disclosure norms by making it mandatory to declare the landlord-tenant relationship to avail deductions.

“These rules may be called the Income-tax Rules, 2026. They shall come into force on April 1, 2026,” the government said in a gazette notification.

India’s net direct tax collections grew 7.19% year-on-year to Rs 22.80 lakh crore as of March 17, 2026, according to the latest provisional data released by the tax department.

The overall net direct tax mop-up includes net corporate tax of Rs 10.91 lakh crore, non-corporate tax of Rs 11.32 lakh crore and securities transaction tax (STT) of Rs 55,717 crore.

Advance tax collections during the period rose 6.42% to Rs 11.13 lakh crore, with the increase partly moderated by weaker growth in non-corporate tax payments.

Before adjusting for refunds, gross direct tax collections stood at about Rs 27.15 lakh crore as of March 17, marking a 4.86% increase from Rs 25.89 lakh crore collected during the same period a year earlier.

The Income Tax Appellate Tribunal (ITAT), Delhi, has delivered a significant ruling for property buyers and high-value real estate transactions, holding that a builder’s rebate or discount cannot automatically be treated as taxable income.

The case involved Sh. Satya Prasan Rajguru vs DCIT (AY 2021–22), where the tax department attempted to tax a Rs 9.8 crore discount received by the buyer on the purchase of a luxury flat in Gurugram.

The case: Rs 23 crore flat and Rs 9.8 crore builder discount
The taxpayer had purchased a high-end apartment in DLF Camellias, Gurugram, for about Rs 23.13 crore, against a higher listed value of around Rs 32.95 crore.

In a significant ruling that could influence how capital gains tax exemptions are interpreted, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that multiple adjacent residential units can be treated as a single “residential house” for claiming exemption under Section 54 of the Income-tax Act.

The decision came in the case of Saroj Rani vs ITO (ITA No. 5472/DEL/2024) and deals with a long-running debate over whether investing in more than one apartment can still qualify for the capital gains exemption meant for investment in “one residential house”.

The background: Sale of property and reinvestment
The dispute arose after taxpayer Saroj Rani sold a residential property in Punjabi Bagh, Delhi for about Rs 2.70 crore and claimed exemption under Section 54 by reinvesting the proceeds into another residential property.

Since yesterday many chartered accountants and taxpayers are saying that taxpayers, including individuals, have been getting nudge emails from the income tax department about advance tax. The nudge email mentions that the Income Tax
Department has reason to believe that the taxpayer's advance tax payment doesn't match up with their financial activities.

Additionally, the same email from the income tax department also highlights some of the 'significant transactions' undertaken by the taxpayer during the year. However, CAs and taxpayers point out that the email has erroneously highlighted certain 'significant transactions' that were not undertaken by the said taxpayers who got this email or were not relevant for the said taxpayer.

A tax addition under Section 68 of the Income-tax Act cannot be sustained merely on the basis of statements recorded during departmental inquiries without allowing the taxpayer an opportunity to cross-examine the witnesses, the Income Tax Appellate Tribunal (ITAT) has held.

In a case involving alleged unexplained cash credits, the tribunal ruled in favour of the taxpayer after finding that the tax department had failed to provide independent evidence to support the additions.

The ruling reinforces an important legal principle that tax authorities must rely on credible and legally admissible evidence rather than suspicion when treating a transaction as unexplained income.

A new amendment has been made to the Income Tax Rules, 1962, which now requires banks to collect and report more detailed information on account holders and controlling individuals.

Specifically, financial institutions must now provide additional information regarding reportable accounts. This includes the status of self-certification, details of joint accounts and the number of account holders, whether the accounts are classified as new or pre-existing, and the role that qualifies someone as a controlling person for entity accounts.
The Central Board of Direct Taxes (CBLT) has notified three new amendmen to Income Tax Rules, 1962. CBDT Notification (No. 19/2026) dated March 5, 2026 said that three tax rules (Rule 114F, 114G and 114H) have been amended line with Foreign Account Tax Compliance Act and Common Reporting Standard in India.

Moving back to India is one of the most important financial transitions an NRI can make. Though the decision to return often begins with excitement about settling back home, it also brings a complex shift in tax and financial status.

Once the initial phase settles, many returning Indians move through a tax transition known as RNOR (Resident but Not Ordinarily Resident) before eventually becoming Resident and Ordinarily Resident (ROR). Each stage carries different tax implications.

In an exclusive conversation with FinancialExpress.com, CA Sagar Soman, Consultant – NRI Taxation & Cross-Border Wealth Advisory, explains how returning NRIs should navigate this transition and avoid common mistakes.

RNOR is a valuable tax window but not a long-term strategy
According to Soman, many returning NRIs try to maximise tax-free growth during the RNOR phase by keeping money abroad. However, this decision should not be automatic.

As per the proposed Income Tax Draft Rules, 2026, credit card usage may come under stricter income tax scrutiny from April 1, 2026. Expenses made on employer-provided credit cards might be considered taxable perquisites unless the cardholder shows that the expenses are made for official purposes along with the required documentation.

These changes are expected to bring greater transparency to credit card usage, rather than leading to any immediate change in how credit cards function or benefit consumers.

The proposed treatment of employer-paid credit card expenses as taxable perquisites is particularly relevant for mid and senior-level employees. If a company pays the annual fee of a personal card, or absorbs personal spending, the value could be added to taxable salary unless structured properly. Many employees overlook this because the benefit is indirect.

The Income Tax Department has introduced a major overhaul in form numbering under the Income Tax Rules 2026, replacing several commonly used forms that were earlier prescribed under the Income Tax Act 1961 and IT Rules 1962. The changes affect tax audit reports, PAN applications, TDS returns, charitable trust filings, foreign remittances, and appellate forms, among others.

According to the updated list of frequently used forms, nearly 30 commonly used forms have been assigned new numbers, requiring taxpayers, chartered accountants, companies and trusts to use the revised formats going forward.

One of the most significant changes is in Tax Audit reporting, where the earlier Forms 3CA and 3CB have now been replaced by Form 26. The new form reportedly contains 55 segment-wise clauses, indicating a more detailed reporting structure.

The Income Tax Department has detected suppression of sales worth around Rs 408 crore by restaurants following a nationwide verification exercise conducted across the food and beverage (F&B) sector.

The probe stems from an investigation launched in November 2025 to examine possible tax evasion patterns among restaurants. During the exercise, the department found that several establishments were allegedly deleting bulk bills and making other alterations in their billing systems to understate actual sales.

Officials analysed transactional data from about 1.77 lakh restaurants using artificial intelligence-enabled analytical tools and compared it with the turnover declared in their income tax returns. The analysis pointed to large-scale under-reporting of income across several cases.

Geopolitical conflicts are usually analysed through the lens of diplomacy, security or energy markets. Yet, their ripple effects sometimes reach the everyday lives of ordinary individuals in unexpected ways. The ongoing tension involving the United States, Israel and Iran have periodically disrupted aviation routes across parts of West Asia. Major transit hubs such as Dubai and Abu Dhabi have experienced sudden airspace restrictions and flight cancellations, leaving many travellers stranded.

For Indians in the United Arab Emirates, including expatriates, professionals, and senior citizens from India visiting their children, such disruptions may initially seem little more than a travel inconvenience. However, in the realm of taxation, even a brief involuntary extension of stay can trigger consequences far beyond delayed flights. A deviation of just two or three days may alter a person's tax residency status, reshape compliance obligations, and potentially expose foreign income to taxation.

The explanation lies in the way our nation's tax system determines residential status.

The arithmetic
Under Section 6 of the Income Tax Act, residential status is determined primarily by the number of days spent in India during a financial year. The law lays down clear thresholds. An individual becomes a resident if they stay in India for 182 days or more during the year. Alternatively, residency may also arise if the individual stays in India for 60 days in that year and for 365 days or more during the four preceding financial years. These rules appear objective and straightforward. Under ordinary circumstances, they function smoothly. Yet, they are also rigid because the law counts days without examining the reasons behind them. This rigidity becomes evident when real-life travel disruptions collide with statutory thresholds.

The Income Tax Department has launched a pan-India verification drive targeting restaurants suspected of under-reporting sales, according to a report by CNBC-TV18.

The move comes after tax officials recently detected alleged manipulation of billing data that allowed some restaurants to suppress their actual sales and reduce tax liabilities.

Sources told CNBC-TV18 that the tax department has directed its field units across the country to carry out sample checks to identify cases where restaurants may have under-reported their revenue.

The Income Tax Appellate Tribunal (ITAT) Pune on February 19, 2026 gave full tax exemption to Mr Gugale from Baramati, Pune after he sold his land for Rs 3.21 and used this money to buy a house. He had to go and file a case in ITAT Pune as the Income Tax
Department had initially denied his tax exemption claim under Section 54F because he made a crucial technical mistake of not fully depositing the land's sale proceeds in a special bank account called 'Capital Gains Account Scheme (CGAS) before filing his income tax return (ITR).

ITAT Pune held that Section 54F exemption cannot be denied when sale proceeds are fully invested in a house, even if not fully deposited in the capital gains account before filing the return. The Karnataka High Court reached the same conclusion in a similar case (case no: CIT vs. Ramchandra Rao [2015] 56 taxman.com 163).

When 133 cr is involved, second thoughts are inevitable. But the I-T Appellate Tribunal's (ITAT) Delhi bench has reminded the tax administration that Sec 263 of I-T Act is not a statutory licence for second thoughts, especially when they arise after a completed scrutiny assessment.

Last month, in an order involving senior advocate Mukul Rohatgi's AY 2020-21 return, ITAT quashed the revisionary order under Sec 263 and restored the completed scrutiny assessment passed under Sec 143(3) read with Sec 144B. So, has ITAT reshaped Sec 263 law? No. It has firmly redrawn its boundaries at a time when those boundaries have been under pressure. For AY 2020-21, Rohatgi's return was scrutinised and assessed at about 2133 cr. Subsequently, the principal commissioner invoked Sec 263 on three grounds:
Characterisation of certain MF gains (long-term vs short-term).

Determination of annual letting value for properties in India and abroad.
Alleged failure to initiate penalty under Sec 271C for non-deduction of TDS.
Sec 263 allows a commissioner to revise an assessment only if it's both: erroneous, and prejudicial to interests of revenue. These are conjunctive conditions, not alternatives. The Supreme Court settled this in 'Malabar Industrial'. The tribunal found the principal commissioner lacked objective material demonstrating the completed assessment suffered from a legally sustainable error causing revenue prejudice. That finding proved fatal to the revision.

The Central Information Commission (CIC) has advised the Income Tax Department to "institutionalise a taxpayer-friendly mechanism", flagging that taxpayers are often made to run from "pillar to post" while seeking resolution of their grievances.

The observation came in an order passed by Information Commissioner Vinod Kumar Tiwari while disposing of a complaint related to 'discrepancies' in TDS credited to the applicant over several assessment years.

The commission noted that in several such cases, taxpayers are repeatedly forced to pursue authorities to reconcile discrepancies.

The Finance Bill, 2026 proposes several reforms aimed at encouraging voluntary compliance-including expanding the scope of updated returns and rationalising penal consequences for small taxpayers disclosing foreign assets and income under the Foreign Assets of Small Taxpayers Disclosure Scheme, 2026.

The updated return mechanism was first introduced through Section 139(8A) of the Income-tax Act, 1961 by the Finance Act, 2022, allowing taxpayers to file an updated return within 24 months from the end of the relevant assessment year. The time limit was subsequently extended to 48 months by the Finance Act, 2025 (effective 1 April 2025), subject to payment of additional tax ranging from 25% to 70% of the aggregate of tax and interest payable under Section 140B.
From 1 April 2026, the framework is incorporated in Section 263(6)(a) of the Income-tax Act, 2025, with additional tax payable under Section 267.

Direct taxes now account for 58.5% of total tax collections, with non-corporate taxes the dominant contributor. In indirect taxes, GST is now the most buoyant revenue source. This suggests an improvement in the progressivity of the tax system, explain Richa Sawhney & Manoj Mishra

l Direct tax collection trends
INDIA’S TAX COLLECTIONS have exhibited a sustained upward trajectory over the past decade, increasing from Rs 12.45 lakh crore in FY15 to around Rs 44 lakh crore by FY25. While indirect taxes accounted for a relatively higher share of total tax revenues in FY17 and FY21, this pattern has reversed in recent years, with direct taxes’ share of total tax revenues being nearly 58.5% in FY25.

From a distributional perspective, this shift is significant as direct taxes are inherently progressive, as they are linked to income and profitability, whereas indirect taxes are considered to be regressive, disproportionately affecting lower-income households through consumption. The rising share of direct taxes suggests an improvement in the progressivity of the tax system, with positive implications for equity and the overall incidence of taxation.

Many Indians working overseas and earning their salaries abroad have to pay due taxes in that foreign country, be it Singapore, or the United States of America (USA). In cases, where a salaried employee has already paid taxes there, India offers a foreign tax credit (FTC). To take advantage of this, you need to submit Form 67 as per Rule 128 of the Income Tax Rules, 1962.

Although you must file Form 67 before the income tax return (ITR) filing deadline to receive the FTC, missing this deadline can lead to tax disputes. Some taxpayers have successfully contested these disputes in ITAT, but it's best to file Form 67 within the due date to secure the FTC credit in India and avoid double taxation.
However, under the draft Income Tax Rules, 2026, the rules have changed for Form 67 (re-numbered to Form 44 now). The draft income tax rules have not yet been approved by the Parliament.

Here comes a hitch for the taxman. Deported fugitives, truant bottowers slapped with lookout notices, extradited accused or even approvers singing like a canary before law enforcement agencies the long cast of characters who are unable to fly out of the country-cannot be readily forced to disclose their foreign bank accounts, companies, and properties.

This stems from a Delhi High Court order that has stayed the tax office's demand that Rajiv Saxena, the Dubaibased businessman who was extradited to India in January 2019 in connection Forced Stay? No BMA, says Court I-T Dept can't blindly impose law on involuntary residents' in India to get foreign asset info with the AgustaWestland case, must share the details of his foreign assets.
With this, the income tax authorities cannot blindly invoke the Black Money Act (BMA) simply because a person has unwillingly become a 'resident'-following his involuntary stay in India beyond 181 days. Under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, which came into effect on July 1, 2015, all residents must declare their overseas assets in the annual tax return.