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A same sex couple has challenged a part of the Income Tax Act in the Bombay high court, saying it unfairly denies them a tax benefit that married heterosexual couples get on gifts. The Income Tax Department has strongly opposed their plea, telling the court it is "misconceived and the plea should be dismissed. What was the case about? The petitioners, Payio Ashiho and his partner Vivek Divan challenged Section 56(2)(x) the income Tax Act before a bench of Justice B.P. Colabawalla and Justice Firdosh Pooniwalla. Under this section, gifts between spouses are exempt from tax. But since law does not recognise same sex partners as spouses, the couple cannot claim this exemption. They say this is "indirectly discriminatory" and have asked the court to include same-sex couples under this tax exemption too, as per a report by LiveLaw. The Income Tax Department disagreed and filed an affidavit on October 14, 2025. The department said the couple is trying to use a tax law to get marriage recognition, without their relationship being recognised as a marriage under any Indian law first.
India is transitioning from the Income Tax Act, 1961, to the new Income Tax Act, 2025, a move that has raised several questions among taxpayers, businesses, and tax professionals regarding pending assessments, procedural matters, and ongoing applications. To address these concerns, the Central Board of Direct Taxes (CBDT) has issued a detailed set of Frequently Asked Questions (FAQs) that explains how pending cases and various tax proceedings will be handled once the new law comes into effect on 1 April 2026. Issued through an official memorandum dated 6 July 2026, the FAQs clarify the transition provisions under Section 536 of the Income Tax Act, 2025. The guidance covers a wide range of issues, including pending assessments, Lower Deduction Certificates (LDCs), No Deduction Certificates (NDCs), search cases, tax recovery proceedings, prosecutions, registrations and other procedural matters.
A Joint Development Agreement (JDA) can trigger capital gains tax even before a landowner receives or sells the flats promised under the deal. However, if those flats qualify for exemption under Section 54 or 54F of the Income-tax Act, the tax may eventually become nil. In a ruling that could benefit many landowners entering redevelopment agreements with builders, the Bengaluru bench of the Income Tax Appellate Tribunal (ITAT) has held that a taxpayer was entitled to claim exemption under Section 54/54F on all 23 flats received under a Joint Development Agreement. The Tribunal treated all the flats as one residential house for the purpose of the exemption, resulting in no capital gains tax liability despite holding that the JDA itself amounted to a transfer of the property.
The income tax department on Wednesday said it has released the Excel Utility for ITR-5 for the assessment year (AY) 2026-27, enabling eligible taxpayers to file their income tax returns through the e-filing portal. The ITR-5 form is meant for taxpayers such as companies, societies, trusts, limited liability partnerships (LLPs) and associations of persons (AOPs). In a post on X, the department on July 7 said, “Kind Attention Taxpayers! The Excel Utility for ITR-5 for Assessment Year 2026-27 is now available on the Income Tax e-Filing portal."
Tax treatment varies sharply by how you hold gold. Whether you buy physical gold, Gold ETFs, gold mutual funds, digital gold, or Sovereign Gold Bonds (for existing holders), each investment comes with a different tax treatment that can significantly affect your post-tax returns. Hence, if you’re planning to invest in gold or already own multiple forms of the yellow metal, understanding the tax rules is essential.
When Mr Rajan from Ambattur, Chennai sold his Noida property on July 9, 2019 for Rs 48 lakh, he made a long term capital gain of Rs 5.59 lakh. He then decided to buy a 1,851 sq.ft. land in Chennai for Rs 94.38 lakh to build his own house. To help with the Chennai land purchase, he took out a loan of Rs 49.85 lakh. Since he claimed Section 54 long term capital gains (LTCG) tax exemption, he didn't have to pay any tax on the sale of the Noida property. But then the Covid-19 lockdown hit in 2020, leading to a labour shortage that delayed the construction. The legal time limit of three years passed, and the house was still not completed. As a result, the Income Tax Department rejected his Section 54 tax exemption claim and demanded that he pay tax on the Noida property sale.
For non-resident Indians (NRIs), filing an income tax return every year comes with unique compliance challenges, starting with determining tax residency status. And, just as increased data-driven scrutiny by the income tax (I-T) department has narrowed the scope for faulty disclosures by resident taxpayers, it has also raised the bar for NRIs to file accurate and compliant returns.
The Central Board of Direct Taxes (CBDT) has identified a set of measures to collect Rs 26.97 trillion in direct taxes in the current financial year (FY27), which include better management of recovery of dues, detecting wrongful claims of tax exemptions, and outreach programmes to get tax returns updated where there is short payment of taxes, an official said. The official said tax collection so far has been encouraging, with net direct tax receipts reaching Rs 5.21 trillion by June 17, nearly a 15 per cent increase compared to the same period last year. This strong start has raised hopes that the annual target will be met comfortably. According to the official, who spoke on condition of anonymity, the Board's Central Action Plan for 2026-2027 lays down clear steps to achieve the goal.
When Mr Bhatia from Westend Colony, New Delhi received Rs 1.42 crore in rent from his various properties, he filed his income tax return (ITR) on September 3, 2015, claiming a tax refund of Rs 17 lakh. This refund was based on the advance tax he had paid and the TDS deducted from his rental income.
The PM Modi-led Central government announced on Friday that it has removed the requirement to deduct tax at source on aircraft lease rentals paid to leasing companies operating from International Financial Services Centres. The move is aimed at making aircraft leasing through GIFT IFSC more attractive and easing cash flow pressures on airlines.
A business can claim a deduction for a bad debt even if efforts to recover the money are still underway, the Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled. In an order pronounced on June 30, 2026, the Tribunal allowed Ahmedabad-based commodity trading firm Hemant Brothers to claim a deduction of ₹2.69 crore arising from the National Spot Exchange Ltd. (NSEL) payment crisis. It held that once a debt has been written off in the books of account and the conditions prescribed under the Income-tax Act are fulfilled, the deduction cannot be denied merely because recovery proceedings are pending.
Taxpayers generally receive their income tax refunds within 4 to 5 weeks after successfully e-verifying their Income Tax Return (ITR), as per the Income Tax Department. Many taxpayers expect the Income Tax Department to credit the exact refund amount shown while filing their ITR; however, sometimes taxpayers receive a refund that is lower than the amount claimed in the ITR. Here’s why taxpayers may receive only part of their expected refund and what they should do if the amount does not match. Reasons for receiving partial refunds Taxpayers receiving a partial refund generally indicate that the Income-tax Department (ITD) has recomputed the taxpayer’s return during processing after matching the information reported in the return with data available through Form 26AS, AIS, TIS, TDS statements and other third-party reporting systems. Some of the most common reasons include:
Jaipur Income Tax Appellate Tribunal (ITAT) has recently held that taxpayers opting for the new tax regime cannot be denied the Section 87A rebate merely Decause part of their income is taxed as short-term capital gains under Section 111A. "The Tribunal has held that the rebate under Section 87A is available against the total income tax liability and cannot be denied merely because a part of the income is taxed at a special rate. While this provides strong judicial support for taxpayers to claim the rebate while filing their Income-tax Returns, the issue has not yet attained finality. Since there is no binding decision of the jurisdictional High Court or the Supreme Court on this specific controversy, the Revenue may continue to contest the issue in appropriate cases," said Mohit Gupta, PNAM & Co LLP
For futures and options (F&O) traders, the revised ITR-3 form for assessment year 2026-27 has made it mandatory to report F&O turnover and income. The income tax return (ITR) will be marked defective without these details. The revised ITR-3 form has enhanced disclosure requirements in Schedule Part A —Trading Account. Taxpayers have to separately report income and turnover from F&O, intraday equity, commodity and currency, enhancing transparency and improving tax compliance. They must separately report F&O turnover and income, ensuring a clear distinction between non-speculative derivative trading and speculative intra-day equity transactions.
Under Indian tax law, if the money used to create a Fixed Deposit belongs to you, the interest earned is not your spouse's income, it is yours. Section 64 of the Income Tax Act, known as the clubbing of income provision, pulls that interest straight into your tax return regardless of whose name the FD sits in. This means two things. First, you must declare that interest income in your own ITR. Second, and this is where most people lose money, the TDS the bank deducted against your spouse's PAN can be claimed back by you. But only if you follow the exact process.
The Income Tax Department using data analytics and other tools and sources at its disposal have identified about 15,000 to 20,000 likely cases where individuals have used 'swapped provisions' trick to reduce their taxable income and thus pay a lower income tax. As reported by TOI, this initiative is part of the tax department's mandate to crack down on bogus claims. In line with this, the department has reached out to employers, urging them to examine discrepancies in Form 24Q concerning the TDS they deducted from their employees' salaries.
The Central Board of Direct Taxes (CBDT) has directed its zonal income tax heads to keep a close watch on the sectors which recorded a decline in tax payments in the first quarter of this financial year as well as top advance tax payees, along with identifying any incorrect exemptions or deductions, sharpening its focus on risk assessment, sectoral monitoring and taxpayer outreach to bolster revenue collection in the coming quarter. The communication, dated June 16, a copy of which was seen by ET, also mandated each zone to submit a report to the Directorate of Tax Research and Analysis by July 31. "The idea is to identify risks early, engage with large taxpayers proactively and ensure that tax payments are aligned with actual income trends," said a senior official, who did not wish to be identified.
A recent ruling by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has come as a major relief for taxpayers who invest their capital gains in a house but face delays in getting possession because of the builder. The tribunal held that a taxpayer cannot be denied tax exemption under Section 54F of the Income Tax Act merely because possession of the residential property was delayed due to reasons beyond their control, provided the investment was made within the prescribed timelines. The ruling is particularly relevant for homebuyers who have sold assets such as shares and invested the proceeds in a residential property to save capital gains tax.
The IMF expects India to be the world's third-largest economy by FY28. However India's share of world equity market capitalisation fell below 3% in May 2026, the first such reading in four years. That divergence, between the scale of our economy and our presence in global capital markets, is structural. The infrastructure to close it is being built at GIFT IFSC, from both directions. Roughly two-thirds of Indian household savings sit in real estate and gold. Equities are approximately 5% of household wealth. Foreign assets are less than half a percent. Indian and US equity markets don't move in lockstep. Our internal analysis, back-testing equally weighted India-US portfolios from the 2008 market bottom through early 2026, shows an equally split India-US allocation returned 1,080% against 750% for an India-only portfolio over that period. The gap is widest when it matters most: when domestic markets come under stress, uncorrelated exposure is what keeps a long-term portfolio intact.
For generations, Indian investors have viewed rental income as the most trusted route to passive income. Buy a property, lease it out, and collect a monthly cheque. But with property prices rising, rental yields staying modest, and tenant management becoming a real effort, investors are asking a more practical question: can bonds create similar monthly cash flow with lower capital? The answer lies in the math.
Tax season is underway, and as Al adoption gathers pace, several professionals are taking to LinkedIn to share how Al tools have helped them file their income tax returns. One widely discussed post came from a data security analyst who claimed Anthropic's Claude read his Form 16, cross-checked details with the AIS, navigated the Income Tax portal, resolved filing errors and submitted the return with minimal human intervention. He described the experience as feeling like "a CA was sitting next to me", sparking debate over Al's role in tax filing.
The Income Tax (I-T) Department has enabled online filing and Excel utility for Income Tax Return-3 (ITR-3) form for the Assessment Year 2026–27 (AY 2026-27) Financial Year 2025-26 (FY 2025-26) on its official e-filing portal. The ITR-3 form is meant for individuals and Hindu Undivided Families (HUFs) with business or professional income. Taxpayers who are not eligible to use simpler forms such as ITR-1, ITR-2 or ITR-4 are required to file ITR-3. Who can use ITR 3? If an individual or a Hindu Undivided Family has income under the heading ‘profits or gains of business or profession’ and is not qualified to submit Form ITR-1 (Sahaj), ITR-2, or ITR-4 (Sugam), they must use the ITR-3 form.
Recently, the Central Board of Direct Taxes (CBDT) issued guidelines for compulsory selection of income tax returns (ITRs) for complete scrutiny and in this regard specified two deadlines, one for internal use and the other for sending tax notices. The two deadlines are: June 15, 2026: (internal deadline) Tax officers have to forward certain selected ITRs which satisfy specific guidelines to the Directorate of Income Tax (Systems) so that further action can be taken. June 30, 2026: This is the deadline for issuance of tax notice under Section 143(2) for ITRs filed in FY 2025-26.
The government will examine demands for rationalising taxes on equity investments, but is not considering any knee-jerk response to stem foreign institutional investor (FII) outflows from Indian equity markets, a senior Finance Ministry official told The New Indian Express. “There is a need for a deeper study of the taxation of capital gains from equity investments,” the official said, acknowledging that there are currently divergent views on the issue. The official was responding to a question from TNIE on why the government chose to provide tax relief on investments in government bonds by foreign investors while leaving unaddressed the long-standing demand for lower capital gains taxes on equities.
A ruling by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has underscored the importance of understanding tax deduction at source (TDS) obligations when purchasing property. The case involved a Mumbai resident, who had jointly purchased a residential flat in the tony area of Haji Ali, worth Rs 1.9 crore with her husband. She held a 15% share in the property (Rs. 28.50 lakh) and deducted TDS of Rs 28,500 under Section 194-IA on her share of the purchase price. However, the tax department later raised a demand exceeding Rs 5.8 lakh, alleging short deduction of tax on the ground that the seller's PAN was inoperative and therefore higher TDS provisions under Section 206AA should have applied. The ITAT deleted the demand, noting that the seller had subsequently linked Aadhaar with PAN and regularised the PAN within the timeline prescribed by a circular issued by the Central Board of Direct Taxes (CBDT) in July 2025. The ITAT also observed that the seller had disclosed the capital gains in his tax return and paid the applicable taxes, making it inappropriate to treat the buyer as an 'assessee in default'.
Can a taxpayer face a hefty tax demand merely because her name appears on a property purchase agreement, even though the entire payment was made by someone else? In a recent ruling by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) in the case of Sanjeevani Sanjay Rane vs ACIT (ITA No. 7361/Mum/2025) for Assessment Year 2017-18, the tribunal deleted additions of Rs 54.93 lakh made by the tax department after finding that the entire investment in the property had been made by the taxpayer’s husband and that the source of funds was adequately explained. How the dispute began The case relates to a residential property purchased during FY 2016-17 for Rs 52.81 lakh. According to the taxpayer, her name was included in the registered agreement only as a family member for convenience, while the entire consideration for the property was paid by her husband, Sanjay Rane.
The Central Board of Direct Taxes (CBDT) has notified fresh guidelines for compulsory scrutiny of Income Tax Returns (ITRs) during the financial year 2026-27, identifying six categories of cases that may be selected for detailed examination by the Income Tax Department. The guidelines, issued through a notification dated June 4, 2026, aim to ensure closer scrutiny of high-risk cases involving surveys, search and seizure actions, tax-evasion information, recurring tax disputes, and certain trusts or institutions claiming tax benefits despite cancellation or denial of registrations. Which taxpayers can face mandatory scrutiny? According to the CBDT guidelines, the following categories of cases can be selected for compulsory scrutiny: 1. Taxpayers covered under survey operations Returns of taxpayers on whom a survey under Section 133A of the Income-tax Act was conducted on or after April 1, 2024, will be selected for scrutiny. However, surveys conducted under Section 133A(2A) have been excluded from this category.
Natural diamonds, at least in India, have always earned blanket trust from customers—trust in their value, reliability, and endurance. They are expected to last and to shine light( pun intended) on generations gone by as they are passed down family lines. The diamond industry is evolving, like all industries need to, in order to adapt to modern requirements and younger generations. Consumers nowadays have questions and access to answers from the internet. They want to know, “Is my diamond natural or laboratory-grown? Has it been certified? Is it ethically sourced?”, etc. For this reason, the Bureau of Indian Standards (BIS) has introduced disclosure norms for clarity and consistency.
A Pune bench of the Income Tax Appellate Tribunal (ITAT) has come to the rescue of a scrap dealer who was saddled with a tax demand of nearly Rs 44 lakh after the Income Tax Department treated cash deposits in his bank account as unexplained money. The case involved Wajeed Khan, a scrap trader who had been in business for over a decade. The dispute centred on cash deposits of Rs 1.28 crore made in his cooperative bank account during FY 2015-16. Why did the tax department reopen the case? Wajeed had filed his income tax return declaring an income of Rs 3,00,340. However, the department’s Insight portal flagged cash deposits of Rs 1,28,26,078 in his bank account, prompting the reopening of the assessment under Section 147.
Income-tax (Amendment) Ordinance, 2026 Notified: Govt Gives Tax Relief on G-Sec Investments for FIIs- So the Centre has officially issued and promulgated the Income-tax (Amendment) Ordinance, 2026, which I guess is meant to be a rather big tax relief for Foreign Institutional Investors (FIIs). It basically waives capital gains and also interest income earned from investments in government securities, the so-called G-Secs. It was published in the Gazette of India on Friday and the Ordinance is amending the Income-tax Act, 2025, and, importantly, it has been applied retrospectively starting from April 1, 2026. In plain terms, India is making its sovereign debt market more appealing for overseas investors, because the tax friction on G-Sec returns is being removed. This step is being read as a strategic nudge to lift foreign participation, especially when global capital flows are still very sensitive to uncertainty and changing risk appetite. Extension Of Benefit To Bank For International Settlements The Income-tax (Amendment) Ordinance, 2026 sort of also extends a similar tax exemption to the Bank for International Settlements (BIS), widening the relief beyond Foreign Institutional Investors. Under that provision, any interest that BIS earns on government securities, and also any capital gains that arise from the sale, exchange, or transfer of such securities by BIS, will be completely exempt from taxation. This step seems to fit the larger aim of encouraging broader involvement in India’s sovereign debt market and making it more appealing to some major global financial institutions, in a way.
India is preparing to roll out new measures aimed at attracting more foreign money into the country, with key decisions likely to be taken as early as this week. According to Bloomberg, citing people familiar with the matter, the Union Cabinet is expected to discuss a major reduction in the taxes that foreign funds pay when investing in Indian bonds. Interest tax on bonds also under review The Cabinet is also expected to examine the future of the 20% tax currently imposed on interest earned from bonds. According to Bloomberg, officials are weighing two options: either scrapping the levy altogether or reducing it to a very low level. The proposal is still under consideration, and a final decision could be taken after Cabinet discussions.
The Central Board of Direct Taxes (CBDT) has instructed assessing officers to exercise greater diligence and consistency in invoking anti-evasion provisions relating to unexplained income and assets after a draft audit report by the Comptroller and Auditor General of India flagged inconsistencies in their application that led to revenue losses for the government. These provisions-Sections 68, 69A, 69B, 69C and 69D-are used when taxpayers are unable to explain the source of money, assets, investments or expenses found during scrutiny, allowing authorities to treat unexplained cash, investments, jewellery, or spending as income if the taxpayer cannot justify where it came from. Section 68 typically covers unexplained credits in books of account, 69A deals with unexplained money or valuables found in possession, 69B relates to under-reported investments, 69C covers unexplained expenditure, and 69D deals with unexplained borrowing or repayment transactions.
The income tax appellate tribunal's (ITAT) Mumbai bench has held that the absence of a formal gift deed cannot, by itself, justify treating a property purchase as an 'unexplained investment' when the source of funds is clearly identifiable. Under I-T laws, if income or an asset is treated as unexplained, it is subjected to a steep punitive tax rate. The ITAT held in its May 27 order that a man purchasing a property in his daughter's name out of natural love and affection cannot be treated as a suspicious transaction merely because no formal gift deed was executed. The daughter, a Mumbai-based homemaker with no independent source of income, came under the tax department's scanner after information surfaced that she had purchased an immovable property valued at Rs 1.1 crore in 2015-16.
A Mumbai taxpayer who declared annual income of just Rs 6.30 lakh found himself facing a tax addition after the Income Tax Department noticed that he had paid credit card bills worth Rs 27.65 lakh in a year, including nearly Rs 14 lakh in cash. The tax department treated the cash payments as unexplained money and added the amount to his income under Section 69A of the Income Tax Act. However, after examining income tax returns, bank statements and other evidence submitted by the taxpayer and his family members, the Income Tax Appellate Tribunal (ITAT) granted substantial relief and deleted a large part of the addition.
The Income Tax Department has begun the phased rollout of online filing and Excel utilities for ITR-1, ITR-2 and ITR-4 on the e-filing portal for Assessment Year (AY) 2026-27. With the utilities now available, taxpayers can start filing income tax returns for Financial Year (FY) 2025-26. While the annual tax filing process may appear routine, several important changes in ITR forms and disclosure requirements could impact how individuals, salaried employees, landlords, and small business owners file their returns this year. Here's a point-by-point look at the key changes for AY 2026-27: 1. Unrealised rent A significant change has been introduced for taxpayers earning rental income. For AY 2026-27, ITR-1 and ITR-4 forms now include a dedicated field titled "The amount of rent which cannot be realized."
