Chairman of the Central Board of Direct Taxes (CBDT) Ravi Agrawal on Monday said the Income-Tax Department is analysing certain refund claims, particularly those identified as “high-value” or red flagged due to claims of specific deductions. This process has led to a temporary delay in issuing refunds, though legitimate payouts are expected by December.

Asked about the delay, Agrawal said, “We have also written to the taxpayers to file a revised return in case they have forgotten something.”

The Income Tax department will notify ITR forms and rules under the simplified Income Tax Act, 2025 by January, officials said. The new law, which replaces the six-decade-old Income Tax Act of 1961, comes into effect from the next fiscal beginning April 1, 2026. The intent is to make tax compliance simpler and more taxpayer-friendly, Central Board of Direct Taxes (CBDT) chief Ravi Agrawal said on Monday.

“We are in the process of designing forms and rules. We are working towards putting this in place by January so that taxpayers have sufficient time to adapt their processes within their system,” Agrawal told reporters after launching the Taxpayers’ Lounge at the India International Trade Fair (IITF).

On October 31, 2025, the Income Tax Appellate Tribunal (ITAT) Bangalore provided relief to Mr. Israni, a senior citizen, by removing the disallowance of the acuisition cost for a house property in Bengaluru that he jointly sold with his wife for Rs 8 crore. Out of this Rs 8 crore, he is entitled to Rs 4 crore, as his wife had a 50% share in this property.

This case began when Mr. Israni filed his income tax return (ITR) for AY 2022-23 on June 16, 2022 reporting a total income of Rs 35 lakh (35,67,355). This ITR was processed under Section 143(1) on August 16, 2022 where his income calculations were accepted as submitted .However, his case was chosen for scrutiny under CASS, leading to issuance of tax notices under Sections 143(2) and 142(1).

Responding to the tax notice, Mr. Israni made submissions on various dates throughout the assessment process. However, the tax officer noted that during the year under consideration, Mr. Israni sold a house property located in Bangalore for Rs 4 crore (4,02,00,000) (50% of Rs 8 crore or 8,04,00,000).

On October 27, 2025, the Income Tax Appellate Tribunal (ITAT) Mumbai ruled that short term capital gains (STCG) from transferring development rights to a builder under a registered agreement, should be taxed in the individual homeowner’s hands rather than the housing society’s.


This ruling came about after a case was filed by the RBI Employees Bhagvati Co-op. Housing Society Ltd which is a Co-operative Housing Society registered under the Maharashtra Co-operative Housing Society Act 1960. The housing society filed this case against the income tax department after they added Rs 5 crore (4,97,63,657) to their STCG income and slapped on a penalty of Rs 1.5 crore (1,53,76,971).

Chartered Accountant Suresh Surana said to ET Wealth Online that in this case of ITO vs RBI Employees Bhagvati Co-operative Housing Society Ltd., the assessee, a residential society in Mumbai, entered into a redevelopment agreement with a developer.

India’s direct tax collections have maintained steady momentum, with the latest data indicating a year-on-year increase in net collections (as of November 10, 2025), according to latest data from the Central Board of Direct Taxes (CBDT). The rise in tax collections underscores resilient corporate profitability, expanding individual tax base and improved compliance.

According to the latest numbers for FY 2025-26 (up to November 10, 2025), net direct tax collections have touched Rs 12.92 lakh crore, compared with Rs 12.07 lakh crore in the same period last year. This reflects a growth of 7 per cent year on year, even as refunds have fallen sharply.

Corporate tax leads the rise
Corporate tax (CT) collections have shown strong performance this year.
Gross corporate tax collections rose from Rs 6.60 lakh crore in FY25 to Rs 6.91 lakh crore in FY26.

Mr. Vashistha, a retired employee of the State Bank of India from Jaipur, had to file a case in the Income Tax Appellate Tribunal (ITAT) after the income tax department denied him a higher tax exemption of Rs 25 lakh for leave encashment. What happened here was Mr. Vashistha got Rs 13 lakh as part of his retirement benefits (leave encashment) and he claimed tax exemption for the entire amount. For the uninititated, at present up to Rs 25 lakh is tax exempt for leave encashment, but earlier it was Rs 3 lakh.

On November 3, 2021, the income tax department issued him a Section 143(1) notice denying the higher tax exemption of Rs 25 lakh for leave encashment. Although he challenged this tax notice in CIT (A), he ended up losing the case there.

The ITAT Jaipur noted that the only submission put forth by Vashistha’s authorised representative was that he received Rs 13 lakh (13,05,810) as leave encashment benefit under Section 10(10)AA of the Income Tax Act, 1961.

A food product company in Andhra Pradesh, an infrastructure company in Maharashtra and a beverages firm in Punjab all have one thing in common: Tax cases that have been pending in the high court for over 10 years, without a single hearing having taken place.

And they are not alone.

There were at least 4,000 cases pending for a decade or longer where a hearing had yet to take place, shows a Business Standard analysis of figures from the think-tank and research institution DAKSH, which has created a database with information from 23 out of 25 high courts on tax cases for the two decades from 2000 to 2021.

An analysis of 320,000 unique cases showed that more than 12,000 tax cases were pending for a decade or more (33.7 per cent), without a hearing and that over 56,000 were pending overall.

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (“Black Money Act”) was enacted with a clear goal — to unearth undisclosed foreign income and assets and discourage tax evasion. Fast forward 10 years and its implementation has sparked serious concerns about fairness and proportionality, especially for regular taxpayers instead of willful offenders.

When Enforcement Overreaches Intent
In recent years, the Income Tax Department has received extensive data on foreign bank accounts of Indian residents through the Exchange of Information provisions under Double Taxation Avoidance Agreements (DTAAs) and the Automatic Exchange of Information (AEOI) network.

A large number of these accounts are owned by residents who temporarily went abroad for employment, research, or education and later returned to India. In many such cases, the funds in these accounts are entirely legitimate — often consisting of small savings, tax-paid income, or even money borrowed or remitted from India for children’s education.

The Central Board of Direct Taxes (CBDT) has notified a new framework to streamline the rectification of tax return errors and issuance of refunds under the Income Tax Act, 1961. The move is expected to simplify the correction of mistakes related to tax computation, prepaid tax credit, or refund processing for individual taxpayers.

As per the notification, the Commissioner of Income Tax (Centralised Processing Centre - CPC), Bengaluru, will now have concurrent powers to handle cases involving mistakes apparent from records, including refund-related discrepancies.

What the new rules mean for taxpayers

Under the revised framework, the Income Tax Department can now rectify issues under Section 154 of the Act that result in:

Errors in tax computation or refund determination,

Non-consideration of prepaid tax credits (like advance tax, TDS, or self-assessment tax),

Non-consideration of eligible reliefs, or

India's recent tax reforms have
strengthened investor confidence and reduced uncertainty, and the next phase of reforms will now focus on achieving "multilateral certainties", Principal Commissioner of Income Tax Raman Chopra said today.

"Multilateral certainties are required and we are working on them as a continuous process. Once the decision is taken and when it has to come, it will certainly come forward," he said, referring to the multilateral tax certainty framework, on the sidelines of the International Tax Summit in New Delhi.

Chopra further emphasised the ongoing international discussions on Pillars 1 and 2, including the US reservations on UTPR, and emphasized India's commitment to tax certainty, simplified compliance, and a non-intrusive tax administration. The last 10 years have seen an immense.

A Kolkata tax court has recently ruled that a large gift from a brother-in-law is completely exempt from income tax, even if no formal gift deed was created. The Income Tax Appellate Tribunal (ITAT) in Kolkata recently ordered in favour of a person, overturning a decision by tax authorities to add Rs 80 lakh to his taxable income.

The assessee had received a substantial sum as a gift from his brother-in-law (sister's husband). While the gift was transferred through banking channels, tax officials had questioned the transaction, arguing that the transfer wasn't validly documented and that the source of the money was unclear.

A key point of contention was the requirement of a formal gift deed. Tax officials initially insisted that because a proper deed was not made in India, the gift could not be recognised as tax-exempt.

The tribunal clarified that under the relevant section of the Income Tax Act (Section 56(2)(vii)), a sister's husband (a brother-in-law) is clearly defined as a relative. Gifts received from any person on this defined list are, therefore, fully tax-exempt.

A husband-wife duo entered into a development agreement with a builder from Mumbai, which stated that they would receive a certain number of apartments in exchange for their land. The agreement included a clause that if the builder failed to deliver the apartments on time, then she and her husband will be entitled to some compensation.

The builder failed to give possession of the apartments on the promised time and so he paid Rs 1.85 crore as compensation to her. He also paid compensation to her husband. She reported this money (Rs 1.85 crore) in her income tax return (ITR) as long-term capital gains (LTCG).

However, the income tax department believed that Section 50C of the Income Tax Act, 1961 is applicable in this case even for the cash compensation received and thus applied the stamp duty valuation at Rs 3.51 crore and calculated her long-term capital gains accordingly.

When the Karnataka high court disposed of a tax case against Texas Instruments in 2020 the ruling could not have come a day sooner for the American chipmaker.

It took the court no fewer than 3,403 days to pass its ruling.

That the resolution of the case -- the ruling went in favour of the multinational -- took nearly 10 years is not unusual in India.

There were 14,858 cases that took 10 to 15 years to resolve across high courts, shows a Business Standard analysis of a database of over 320,000 tax disputes filed between 2000 and 2021 across 23 out of 25 high courts compiled by legal thinktank DAKSH.

Another 1,890 took more than 15 years for disposal.

A combination of overburdened courts, misaligned incentives for department behaviour including aggressive revenue targets, and a tendency to treat all cases alike -- without prioritising important ones -- has resulted in unending timelines, according to experts who say speeding up this process may take some doing.

The Bombay High Court has observed that the income tax department has relied on AI (artificial intelligence) to reference three non-existent judicial rulings and issued a tax notice for Rs 22 crore income of a taxpayer.
The court noted that there are no such rulings that the income tax department is trying to use for this tax notice. The Bombay High Court questioned how the tax department came across these supposed judicial judgements.

Bombay High Court said: “In this era of Artificial Intelligence (‘AI’), one tends to place much reliance on the results thrown open by the system. However, when one is exercising quasi judicial functions, it goes without saying that such results [which are thrown open by AI] are not to be blindly relied upon, but the same should be duly cross verified before using them. Otherwise mistakes like the present one creep in.”

The Central Board of Direct Taxes (CBDT) on Wednesday extended the deadline for filing of income tax returns and submitting audit reports for the assessment year 2025-26, providing relief to taxpayers and professionals, particularly companies, proprietorship and working partners in firms requiring mandatory audits. The revised dates are December 10 and November 10 respectively.

This was the second extension for furnishing the audit report. Earlier, it was extended from September 30 to October 31 following the representations from various professional associations, including chartered accountant bodies, highlighting certain difficulties being faced by taxpayers and practitioners in timely completion of audit reports. The representatives cited various reasons including disruptions caused by floods and natural calamities in certain parts of the country, the CBDT said.

The Income Tax Appellate Tribunal (ITAT) has rejected the income-tax department’s bid to treat Netflix India as a full-fledged content and technology service provider, and deleted a Rs 444.93-crore transfer pricing adjustment for 2021–22, in a major relief for multinational digital platforms.

The Mumbai bench of the tribunal held that Netflix Entertainment Services India LLP (Netflix India) operates merely as a limited-risk distributor of access to the Netflix streaming service, with no ownership of intellectual property (IP) or control over content or technology.

Selling joint property? Be careful of the income tax implications, TDS deductions, and how it needs to show up in your income tax returns. Each beneficiary has to keep an eye on tax implications, calculations of capital gains and TDS when filing their income tax return. Any mismatch could lead to an income tax notice seeking explanation.
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One such case where an income tax notice issued a father-son duo jointly selling their ancestral land for Rs 13 crore. The purchaser erroneously deducted the entire TDS amount of Rs 13 lakh solely under the father's name, instead of splitting it equally between both parties at Rs 6.5 lakh each. The son properly declared his Rs 6.5 crore share in his income tax return and settled the required taxes without taking any TDS credit.

The father submitted his income tax return belatedly under Section 139(4) of the Income Tax Act, 1961 on December 28, 2022 for AY 2022-23, declaring a total income of Rs. 2.76 crore (2,76,47,210).

In AY 2022-23, the jointly-owned ancestral land was sold for Rs 13 crore (13,00,00,000), with each party receiving Rs 6.5 crore (Rs 6,50,00,000). The purchaser withheld the complete TDS under Section 194A at 1%, totalling Rs 13,00,000, exclusively under the father's name.

The Central Board of Direct Taxes (CBDT) has signed 174 Advance Pricing Agreements (APAs) during 2024-25, the highest in any year, indicating the progress in ease of doing business by providing certainty to multinationals regarding transfer pricing.

The service sector has been the top beneficiary as around 60% of total APAs signed during 2024-25 pertain to the sector alone, according to the 7th APA Annual Report released by the CBDT.
The spurt in bilateral APAs is the result of a special drive by the CBDT, sources said.


Bilateral APA aims to prevent double taxation and provide tax certainty in both the jurisdictions of treaty partners. Notably, bilateral APAs were losing popularity in the last few years due to the huge time involved in negotiation among treaty partners.

However, a significant boost in Bilateral APAs during the last 3 years indicates that the speed of negotiation among treaty partners has increased significantly. This trend will encourage other taxpayers also to come forward and opt for APA in order to avoid long drawn litigation, said Amit Maheshwari, Tax Partner, AKM Global.

The Income Tax (I-T) Department has introduced a new feature on its website which shows the exact date and time when the Assessing Officer (AO) or Commissioner of Income Tax (Appeals) [CIT(A)] has viewed or reviewed your tax notice submission in faceless proceedings.

The new feature ensures taxpayers know when their response has been accessed by the tax authority.

Bimal Jain, Founder, A2Z Taxcorp LLP, says that the new feature gives confirmation and assurance that the submission has actually been seen by the Income Tax officer. “It removes uncertainty, helps monitor progress, and prevents allegations of non-consideration or delay in proceedings,” says Bimal.

Mihir Tanna, Associate Director, Direct Tax, SK Patodia & Associates LLP Chartered Accountants, is yet to see the new feature on the I-T Department's portal.

The Gujarat High Court has ordered CBDT to extend the deadline for filing Income Tax returns (ITR) for audit cases. The court has directed CBDT to extend the due date to November 30, 2025. The deadline for audit cases is October 31, 2025. If Central Board of Direct Taxes (CBDT) accepts the order and doesn’t appeal against it in the Supreme Court, it will need to issue a notification for the same. Here are the key takeaways from the Gujarat High Court’s order-

What does Gujarat High Court order say?

The Court directed the CBDT to:
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“Issue a circular under Section 119 of the Income Tax Act to extend the due date for filing returns under Section 139(1) up to 30 November 2025 for assessees required to file audit reports.”