The income tax department on Thursday said taxpayers will not be allowed to claim deduction for expenditures incurred to settle proceedings initiated under four laws, including the Sebi and the Competition Act.

In a notification issued on April 23, the Central Board of Direct Taxes (CBDT) notified that any expenditure incurred to settle proceedings initiated in relation to contravention or defaults under the four specified laws shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.

The four laws are the Securities and Exchange Board of India Act, 1992; the Securities Contracts (Regulation) Act, 1956; the Depositories Act, 1996; And the Competition Act, 2002.

The Central government has introduced changes to the Income Tax Act, 1961, expanding the scope of the Tax Collected at Source (TCS) on luxury goods. Starting April 22, 2025, TCS will be applicable to 'specified range' of luxury goods valued over ten lakh rupees, including items like wristwatches, art pieces, yachts, and more.

Below are comprehensive FAQs on the new provisions, along with the list of luxury goods that will be subject to TCS:
What changes were brought in section 206C(1F) of the Income Tax Act, 1961 through Finance (No. 2) Act, 2024?
Earlier, Section 206C(1F) provided for collection of TCS on the sale of motor vehicles of value exceeding Rs 10 lakh.
Through the Finance (No. 2) Act, 2024, Section 206C(1F) was amended to include a wider range of luxury goods.

India is spawning a new rich class, especially in its small towns, which splurges on personal luxury goods with abandon but often escapes the income tax net. But not anymore. The July 2024 Budget had proposed to bring the expenses made on luxury goods by the rich under the ambit of TCS (Tax collected at source) if cost of luxury goods is more than Rs 10 lakh. This tax is now taking effect from April 22, 2025. From wrist watches to art pieces to yachts to handbags, purses and shoes to golf kits, a number of luxury goods will now attract TCS.

However, with this new TCS, the government is not intending to bulk up its direct tax revenues. Once the TCS is collected from the buyer, it is the seller's duty to deposit the same against the buyer’s PAN.

Many salaried individuals claim tax exemption on house rent allowance (HRA) by paying rent to family members, such as parents. While this is legally permissible, the Income Tax Department has intensified scrutiny of such claims.

Increased scrutiny

Tax authorities say they have observed instances where individuals claimed HRA exemption without fulfilling rules to do so.

Common issues include:

Lack of a formal rental agreement.

Rent payments made in cash, or lacking bank transaction proof.

Absence of rent receipts.

Landlords not declaring rental income in their tax returns.

Such discrepancies raise flags, prompting the department to issue notices seeking clarification to many individuals recently.

The income-tax (I-T) department has issued showcause notices under Section 68 of the Income-Tax Act to several startups over funds routed through Singapore, seeking explanations for investments received over the past five years, people familiar with the development said.

The department is questioning the source, identity, and creditworthiness of overseas investors in these transactions, they said.

In addition, the notices are also being served on Non-Resident Indians (NRIs) holding bank accounts in Singapore.

“These are not routine inquiries, but formal show-cause notices.

The income tax department on Tuesday said it has introduced the 'e-Pay Tax' feature on its official online portal to make it simple for taxpayers to pay taxes. "The 'e-Pay Tax' feature introduced by the Department is an elegant, efficient, and hassle-free method to fulfil your tax obligations," the tax department said in a statement.

Gone are the days of long queues at banks, tedious form-filling, and the looming anxiety of last-minute tax payments. Recognising the need for simpler and more accessible payment methods, and in another step towards digitally empowering the taxpayers, the Income Tax Department has introduced the 'e-Pay Tax' feature on its official online portal, it added.

The Central Board of Direct Taxes (CBDT) has issued a notification specifying the list of luxury goods on which tax collected at source (TCS) will be levied. The CBDT has issued two notifications in this regard. The first notification deals with the nature of luxury goods, while the second one deals with the tax rate and threshold purchase amount above which tax will be levied.

It was a long-awaited notification, as the TCS on luxury goods was announced in the July 2024 Budget. The Budget 2024 memorandum stated that the TCS on luxury goods will be applicable from January 1, 2025. However, there was no notification in this regard to date.

The notifications issued on April 22, 2025, state that the new rules take effect from the date of publication.

It seems that due to deletion of two words – ‘no deduction’ in the proposed new Income Tax Bill 2025 will result in removal of the concept of ‘nil TDS’ certificate for both Indian taxpayers and non-residents including NRIs. To understand how big of an impact this removal is, you need to understand when does a taxpayer need a nil TDS certificate? A nil TDS certificate needs to be applied online by a taxpayer when he/she expects to get an income on which no income tax is required to be paid due to any reason.

So, it's like if your actual income tax liability from any income is 0 but Rs 1 lakh TDS is being deducted on this income, then in this situation you can apply for this nil TDS certificate and if it's granted then zero TDS will be deducted. Similarly in case of tax liability being less than the TDS amount you can apply for lower TDS deduction request.

The Central Board of Direct Taxes (CBDT) has clarified that startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) and compliant with required declarations will not face scrutiny under Section 68 of the Income-tax Act, 1961, for foreign investments. Investments in such entities are exempt from tax-related questioning under this provision, which deals with unexplained credits, the Board said.

"Recognised startups that fulfil the conditions laid down in Notification No. G.S.R. 127(E) of DPIIT dated February 19, 2019, and file declaration in Form-2, are eligible for various tax exemptions and deductions under the Income-tax Act, 1961. Investments made in such companies are eligible for benefits and are not subject to scrutiny," CBDT said on X in response to tax lawyer Ajay Rotti’s post on X.

If you own a society flat that is scheduled to undergo redevelopment by the builder or developer and get an offer to exchange the older one with a new accommodation, you won’t have to pay any income tax on it.

In a recent judgement, the Mumbai Income Tax Appellate Tribunal (ITAT) ruled that such an exchange cannot be taxed under Section 56 of the Income Tax Act. Section 56 of the Income Tax Act deals with income under the head of “income from other sources.”

The bench members B R Baskaran (accountant member) and Sandeep Gosain (judicial member) of the Mumbai ITAT said that giving up rights in the old flat to get a new one is not considered taxable income, as it doesn’t count as receiving a property for less than its value.

A Parliamentary panel examining the Income Tax Bill, 2025, has invited suggestions from experts, industry bodies, and stakeholders as part of its review of the draft legislation aimed at simplifying India’s income tax laws.

The Select Committee of the Lok Sabha, chaired by senior BJP leader Baijayant Panda, is currently holding consultations on the Bill. The Lok Sabha Secretariat has requested interested parties to submit their views in both English and Hindi to the Director (CF&S CITB), Room No 133A, Parliament House Annexe, New Delhi-110001.

The panel has already engaged with leading industry associations and tax experts, including the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI), EY, and the Institute of Chartered Accountants of India (ICAI).

Four new members have been appointed to the Central Board of Direct Taxes (CBDT) by the Union government. An official order issued on Thursday said the Appointments Committee of the Cabinet (ACC) headed by Prime Minister Narendra Modi has approved the names of four 1989 batch Indian Revenue Service (IRS) officers of the Income Tax cadre-- Pankaj Kumar Mishra, Sanjay Bahadur, L Rajasekhar Reddy and G Aparna Rao.

Mishra, a former director of FIU has been working as Member (Finance) in the Atomic Energy Commission while Bahadur as principal director general (training) of the I-T department in Delhi.

Reddy is working as principal chief commissioner (TDS) at Chennai and Rao as principal chief commissioner at Bengaluru.

The Income Tax Department has continuously been expanding the scope of monitoring tax evasion. Tax officials have scaled up the use of Artificial Intelligence (AI) and data analytics to enhance tax compliance and detect discrepancies in financial behaviour.

Now if you invest a large amount, buy property, or spend more than you spend on credit card, all these transactions are being monitored by the tax department, say tax experts.

Banks, mutual fund companies, registrars and other financial institutions give the ‘Statement of Financial Transaction (SFT)’ report to the department every year, which contains information about your high value transactions, according to CA (Dr.) Suresh Surana. Now this data is being combined with Income Tax Return (ITR), TDS, GST, and foreign transactions — and this is how it is being decided whether there is any irregularity in your income and expenses, Surana adds.

In a significant judgment aimed at checking black money and tax evasion, the Supreme Court on Wednesday asked that the lower courts to notify the income tax department if any suit claims to have made a cash transaction of Rs 2 lakh and above. This is to intimate the tax authorities to verify the transactions and check violation of Section 269 ST of the Income Tax Act, 1961.

A Bench comprising Justices JB Pardiwala and R. Mahadevan said that whenever, a sum of Rs 2 lakh and above is claimed to be paid by cash towards consideration for conveyance of any immovable property in a document presented for registration, the sub-registrar shall inform the income tax authority, who shall follow the due process in law before taking any action.

Under Section 269ST of the Income Tax Act, it is prohibited for any person to receive an amount of Rs 2 lakh or more in cash, from a person in a day, either for a single transaction or for multiple transactions related to one event or occasion.

The Income Tax Department has sent emails to taxpayers informing them that since their income tax return (ITR) has been pending for assessment/ re-assessment, their tax refund amount will be withheld till the time the tax officer makes a detailed analysis of it. The said email also mentions that Section 245 (2) will be the charging section for such an action. In simple words, Section 245 gives the income tax department power to adjust your present year’s tax refund with any year’s tax demand amount. There is no limitation period for Section 245 cases.

In this same context, on March 11, 2025, the deputy director of Income Tax has sent many emails to taxpayers mentioning that, “Since there are pending assessment / re-assessment proceedings in your case, the refund release/withhold will be based on the response provided by Jurisdictional Assessing Officer (JAO) in accordance with the provisions of section 245(2) of the Income Tax Act, 1961.”

The short-term capital gains amounting to Rs 1.35 crore, arising from the redemption of mutual fund units, are not taxable in India for the Non-Resident Indian (NRI) investors under the India-Singapore tax treaty. This came as a relief for the NRI investors as the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) eased out the rule.

The case involved A Shah, a Singapore tax resident, who declared capital gains of Rs 88.75 lakh from debt mutual funds and Rs 46.91 lakh from equity mutual funds for the financial year 2021–22. In her income tax return, she claimed exemption for these gains under the residual clause of Article 13 of the India-Singapore tax treaty, asserting that such gains are taxable only in her country of residence, Singapore.

The Mumbai bench of Income Tax Appellate Tribunal on March 24, 2025 held that the allotment date and not registration date of a home determines the capital gains (long term or short term) for real estate property sale transactions. This is a very significant precedent for homeowners as usually the allotment letter is given when 10% or more payment is made and the registration of house is done when the builder gives possession of the flat. The difference in time between property allotment and registration can sometimes span over a few years if not months.

In the case being referred to here, a homeowner sold two flats in Malad, Mumbai in AY 2010-11 (FY 2009-10) for Rs 43 lakh each. The flats were alloted on October 7, 2005 (FY 2005-06) and sold in FY 2009-10 but were registered in FY 2015-16. Further, he reinvested the gains from the sale of these flats to buy another property and thereby claimed Section 54 long term capital gains (LTCG) tax exemption in his income tax return (ITR) for FY 2009-10.

The Central Board of Direct Taxes (CBDT) has set April 30 as the end date for filing declarations under the Direct Tax Vivad se Vishwas Scheme (DTVSV) 2024, aimed at resolving pending income-tax disputes before various appellate authorities, including the Supreme Court and high courts, as of July 22, 2024.

The second edition of DTVSV was announced in the July budget last year and was made operational from October 1.

All the declarations must be filed electronically using Form 1, available on the income tax department's e-filing portal, a CBDT notification said.

A separate form is required for each dispute, it said.

The finance ministry on Tuesday notified Form ITR-B through the gazette which needs to be filed by taxpayers who need to reveal any previously undisclosed income caught in an income tax search or requisition operation on or after September 1, 2024 through block assessment.

“Unlike the detailed disclosures necessitated in conventional ITR forms, Form ITR-B calls for limited data specifically related to the block assessment period. This ensures that taxpayers are not overburdened with compliance requirements while ensuring precision in data reporting,”said Sandeep Jhunjhunwala, M&A tax partner, Nangia Andersen LLP.

The block assessment process in income tax refers to a special procedure used by tax authorities to assess the undisclosed income of a taxpayer, typically when there is evidence of concealed or undisclosed income over a period of time.

The UK has implemented new taxation rules impacting individuals and employees who currently hold non-domicile status. Before 6 April 2025, UK residents who had their permanent home (domicile) outside the UK did not have to pay UK tax on foreign income.

From 6 April 2025, the rules for the taxation of non-UK domiciled individuals has ended. The concept of domicile as a relevant connecting factor in the UK tax system has replaced the remittance basis of taxation with a new tax regime based on ‘residence’ from 6 April 2025.

Previously, UK resident non-domiciles who haven’t become deemed-domiciled could choose to be taxed on the remittance basis.