Guide to Income Tax

DIVISION 1

AMENDMENTS AT A GLANCE

Chapter 1 Analysis of Amendments made by the Finance Act, 2026

Chapter 2A Tax Rates and Charge of Income Tax

DIVISION 2

LAW, PRACTICE & PROCEDURE

Chapter 3 Residential Status

Chapter 4 Non-Resident Taxation

Chapter 5 Salaries

Chapter 6 House Property

Chapter 7 Profits and gains of business or profession

Chapter 8 Capital Gains

Chapter 9 Income from other sources

Chapter 10 Clubbing

Chapter 11 Set-Off

Chapter 12 Deductions

Chapter 13 Tax Deduction at Source (TDS)

Chapter 14 Tax Collection at Source (TCS)

Chapter 15 Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT)

Chapter 16 Return of Income

Chapter 17 Tax Administration

Chapter 18 Interest, Fees and Penalties

DIVISION 3

MISCELLANEOUS

Chapter 19 Gold & Silver Rates (2001–2026) and Cost Inflation Index

DIVISION 4

SUPREME COURT & HIGH COURTS ON INCOME TAX

Supreme Court & High Courts on Income Tax

DIVISION 5

CBDT CIRCULARS & GOVERNMENT NOTIFICATIONS

1. Income-tax Act, 1961
2. Wealth-tax Act, 1957
3. Expenditure-tax Act, 1987
4. Banking Cash Transaction Tax

DIVISION 6

MODEL DEEDS

Model Deeds

DIVISION 7

ALLIED LAWS REFERRED TO IN INCOME-TAX ACT, 2025

Allied Laws Referred to in Income-Tax Act, 2025

Detailed Contents

Division 1

AMENDMENTS AT A GLANCE

Chapter 1

Analysis of Amendments made by the Finance Act, 2026

1. Tax Rates

(1) Individual Income Tax Rates

(2) Corporate Tax Rates

(3) Rationalisation of Minimum Alternate Tax (MAT) Provisions

(4) Co-operative Societies

(5) Firms (Partnership Firms and LLPs)

(6) Local Authorities

2. Profits and Gains from Business or Profession

(1) Rationalisation of due date for Crediting Employee Contribution to Claim Deduction

(2) Expansion of Presumptive Taxation to SEZ Units

(3) Tax Deduction for Prospecting and Exploration of Critical Minerals — Expansion of Schedule XII

(4) Allowing Deduction to Non-Life Insurance Business When TDS Not Deducted Earlier Is Paid Later — Amendment to Schedule XIV

(5) Extension of Tonnage Tax Scheme to Inland Vessels — Amendments to Sections 227, 228, 232, and 235

(6) Alignment of Annual Value of Stock-in-Trade Property — Amendment to Section 21(5)

(7) Definition of “Commodity Derivative” — Amendment to Section 66

(8) Summary Table: Key Amendments at a Glance

3. Capital Gains

(1) Rationalisation of Taxation on Buy-Back of Shares — Amendment to Section 69 of the Income-tax Act, 2025

(2) Restriction of Sovereign Gold Bond Exemption to Original Subscribers — Amendment to Section 70(1)(x) of the ITA, 2025

(3) Exemption of Income on Compulsory Acquisition of Land under the RFCTLARR Act — Amendment to Schedule III of the ITA, 2025

(4) Non-Allowability of Interest Deduction Against Dividend Income and Income from Units of Mutual Funds

(5) Rationalisation of Tax Rate on Unexplained Income under Section 195 of the ITA 2025

(6) Rationalisation of Certain Terms for Treasury Centres in IFSC (Amendment to Definition of “Dividend”)

(7) Benefit to startups

4. International Tax And Nri Taxation

(1) Extension of IFSC and OBU Tax Holiday to 20 Years and Post-Holiday Concessional Tax Rate

(2) New Exemptions for Foreign Companies and Non-Resident Individuals under Schedule IV

(3) Rationalisation of Tax Collected at Source (TCS) on Overseas Remittances, Tour Packages, and Education/Medical Remittances

(4) Relaxation of Specified Fund Rules under Schedule VI of the ITA 2025

(5) Simplification of TDS Compliance for NRI Property Transactions

5. Transfer pricing

(1) Unified Safe Harbour For Information Technology Services

(2) New Safe Harbour for Data Centre Services

(3) New Safe Harbour for Electronic Goods in Bonded Warehouses

6. Dispute Resolution

(1) Advance Pricing Agreement (APA) Framework – Fast-Track Process and Modified Returns for Associated Enterprises

(2) Clarification of the 60-Day TPO Order Timeline (Retrospective from June 1, 2007

(3) Clarification of DRP Assessment Time Limits

(4) Rationalisation of Return Filing Due Dates

(5) Extension of Revised Return Filing Period from 9 Months to 12 Months

(6) Expanded Scope of Updated Returns — Loss Reduction and Reassessment Response

(7) Clarification of Jurisdiction for Reassessment Notices — New Section 147A

(8) Providing time lines for framing assessments where revenue succeeds in courts

(9) Removing the power of arrest and detention by TRO

(10) Clarity on Set off and withholding of refunds

(11) Suspension of Interest on Penalty Demands during Appeals — Section 220(2) Amendment

(12) Enhanced Dispute Resolution Committee (Drc) — Section 245ma Amendment

(13) Reduction of Mandatory Pre-Deposit for Appeals — From 20% To 10%

(14) Mandatory uploading of order of Appellate Tribunal on the designated portal.

(15) Circumstances in which approval not to be invalid

(16) Din (Document Identification Number) Validation – Retrospective Clarification

7. Penalty And Prosecution

(1) Penalty for Under-Reporting and Misreporting to be imposed within the Assessment Order

(2) Expansion of Immunity from Penalty and Prosecution to Misreporting Cases — Section 440

(3) Decriminalisation of Tax Offences — Substitution of Sections 476 through 481

(4) Amendments to False Statements, Falsification and Abetment — Sections 482, 483, 484, 485

(5) Conversion of Procedural Penalties into Fixed Fees — Sections 446, 447, and 454

(6) Disclosure of Confidential Information — Section 280

8. Foreign Assets of Small Taxpayers — Disclosure Scheme, 2026 (Fast- 2026)

(1) Introduction and Legislative Framework

(2) Eligibility And Declaration

(3) Amount Payable By The Declarant

(4) Manner of Declaration and Payment

(5) Immunity from Penalty and Prosecution — Clauses 120, 121, and 123

(6) Rationalisation of Prosecution under the Black Money Act — Rs 20 Lakh Threshold

(7) Non-Refundability and Bar on Remedies