81 FAQs on India’s Finance Bill (Budget) 2026

The Finance Bill (Budget) 2026 introduces wide-ranging amendments across income tax, TCS, STT, compliance, penalties, international taxation, and sector-specific incentives. Income tax slab rates under both new and old regimes remain unchanged, with rebate under section 87A ensuring zero tax up to INR 12 lakh taxable income under the new regime. Revised TCS and STT rates apply from specified assessment years, while ITR due dates are rationalized and extended, including revised and updated return timelines. A time-bound disclosure scheme under the Black Money Act offers limited immunity, alongside relaxation for small foreign asset holders. Search assessments now have extended timelines, and multiple penalties are converted into graded fees or reduced fines. MAT rate is reduced to 14% without credit carry-forward. Incentives are expanded for IFSC units, data centres, foreign companies, and critical minerals. Buy-back proceeds are taxed as capital gains. Safe Harbour limits are enhanced, and prosecution provisions are rationalized to promote decriminalization of minor tax offences.

(A) Income Tax, TCS and STT rates

1. What are Income Tax rates under “new” tax regime?

(Applicable from Assessment Year (AY.) 2026-27 under sec. 115BAC(1A) of Income Tax Act (ITA) 1961)

S. No.	Total income	Rate of tax
(i)	From INR 0 to 4,00,000	0%
(ii)	From INR 4,00,001 to 8,00,000	5%
(iii)	From INR 8,00,001 to 12,00,000	10%
(iv)	From INR 12,00,001 to 16,00,000	15%
(v)	From INR 16,00,001 to 20,00,000	20%
(vi)	From INR 20,00,001 to 24,00,000	25%
(vii)	From INR 24,00,001	30%

Notes:

(i) “No” changes are made in Income tax rates for individuals, HUFs, AoPs and BoIs under “new” tax regimes

(ii) “No” deductions are available under section 80C of Income Tax Act (ITA) 1961

(iii) (a) Income tax rebate is available when “taxable” income is “not” exceeding INR 12 lac under section 87A ITA, 1961

(b) Hence 0 (zero) Income tax is to be paid when “taxable” income is “not” exceeding INR 12 lac “after” income tax rates under section 87A ITA, 1961

(iv) “No” changes are made in surcharge rates for individuals, HUFs, AoPs and BoIs under “new” tax regimes

(v) “No” changes are made in health and education cess rates for individuals, HUFs, AoPs and BoIs under “new” tax regime

(vi) Assessee is permitted to opt “new” tax regime or “old” tax regime

2. What are Income Tax rates under “old” tax regime?

S. No.	Total income	Rate of tax
(i)	From INR 0 to 2,50,000	0%
(ii)	From INR 2,50,001 to 5,00,000	5%
(iii)	From INR 5,00,001 to 10,00,000	20%
(iv)	From INR 10,00,001	30%

Notes:

(i) “No” changes are made in Income tax rates for individuals, HUFs, AoPs and BoIs under “Old” tax regimes

(ii) Deductions are available under section 80C of Income Tax Act (ITA) 1961

(iii) “No” changes are made in surcharge rates for individuals, HUFs, AoPs and BoIs under “old” tax regimes

(iv) “No” changes are made in health and education cess rates for individuals, HUFs, AoPs and BoIs under “old” tax regime

3. What are “new” TCS rates?

(Applicable from Assessment Year (AY.) 2027-28 under sec. 394(1) of Income Tax Act (ITA) 2025)

S.no	Sections under ITA 2025	Sections under ITA 1961	Particulars	under ITA 2025	under ITA 1961
(i)	394(1)	206C(1)	On sale of alcoholic liquor for human consumption	2%	1%
			On sale of tendu leaves	2%	5%
			On sale of scrap	2%	1%
			On sale of minerals, being coal or lignite or iron ore	2%	1%
(ii)	394(1)	206C (1G)(a)	On remittance under Liberalized Remittance Scheme (LRS) exceeding INR 10 lac	(a) 2% for education /medical treatment (b) 20% for “non” education / medical treatment	(a) 5% for education/ medical treatment (b) 20% for “non” education / medical treatment
(iii)	394(1)	206C (1G)(b)	On sale of overseas tour programme package like: (a) On travel expenses (b) On hotel stay or boarding or lodging or similar or related expenditure.	2% “without” monetary limit	(a) 5% “not” exceeding 10 lac (b) 20% exceeding 10 lac

Notes:

• “No” TCS is applicable when remittances under LRS are “not” exceeding INR 10 lac in 1 financial year

4. What are “new” STT rates?

(Applicable from April 01, 2026)

S. No	Particulars	“New” STT	“Old” STT	Payable by
(i)	Sale of securities’ option	0.15%	0.1%	Seller
(ii)	Sale of securities’ option when option is exercised	0.15%	0.125%	Purchaser
(iii)	Sale of securities’ futures	0.05%	0.02%	Seller

(B) Income Tax Return (ITR)

5. What are “updated” Due dates for ITR?

(Applicable from AY. 2026-27 under sec. 263 of ITA 2025)

S. No.	Assesses	Due date
(i)	Companies and non-companies assesses when accounts are to be audited under Income Tax Act (ITA) 1961 / “any” other act in force.	30th Nov
(ii)	“Non” companies assesses having income from profits and gains of business or profession and accounts are “not” required to be audited under ITA 1961 / “any” other act in force when ITR 3 or ITR 4 is to be filed	31st Aug
(iii)	“Non” companies assesses “not” having income from profits and gains of business or profession “and also” accounts are “not” required to be audited under ITA 1961 / “any” other act in force “both” conditions are to be satisfied.	31st July

6. What are Due dates for “revised” ITR?

(Applicable from AY. 2026-27 under sec. 263 of ITA 2025)

• Now due date for filling “revised” ITR is extended to March 31 from Dec 31 following the tax year ended on March 31 with nominal fee INR 1 thousand when income “not” exceeding INR 5 lac and INR 5 thousand exceeding INR 5 Lac

7. What are Due dates for “updated” ITR for reducing of losses?

(Applicable from AY. 2027-28 under sec. 263 of ITA 2025)

• Now taxpayers will be allowed to file “updated” ITR when “updated” ITR is required to file for reducing losses previously claimed in “original” ITR filed

8. What are Due dates for “updated” ITR “after” re-assessment proceedings?

(Applicable from AY. 2027-28 under sec. 263 of ITA 2025)

• Now “updated” ITR will be allowed “after” initiation of re-assessment proceedings when “additional” income tax payable is increased by 10% of aggregate amount of income tax and interest payable against “updated” ITR

(C) Black Money Act (BMA) 2015

9. What is “new” Scheme for disclosure of foreign assets and income?

(Applicable from scheme’s date, yet to be notified during year ending March 31 2027)

• Now Central govt. has introduced a time-bound scheme “yet to be notified” for declaration of foreign assets and foreign-sourced income with payment of tax / fee based on the nature and source of acquisition for granting “limited” immunity from penalty and prosecution under BMA, 2015

10. What is “no new” scheme for disclosure of foreign assets and income?

(Applicable from scheme’s date, yet to be notified during year ending March 31 2027)

• Scheme is “not” introduced for declaration of foreign assets and foreign-sourced income with payment of tax / fee against the cases when prosecution is “already” initiated under “any” law in force or Proceeds of Crime (PoC) under PMLA, 2002 are identified.

11. What is “new” Relaxation for prosecution?

(Applicable from October 01, 2024 under sec. 49 and 50 of BMA 2015)

(i) Now prosecution provisions are “not” applicable for “non” disclosure when aggregate value of asset “other than” immovable property is “not” exceeding INR 20 lac.

(ii) Now small taxpayerse. “former” students having “dormant” foreign bank accounts, ESOPand Restricted Stock Unit (RSU) holders of foreign companies, will be benefited with Scheme for disclosure of foreign assets and income

12. What is “no new” relaxation for prosecution?

(Applicable from October 01, 2024 under sec. 49 to 50 of BMA 2015)

• Prosecution provisions are applicable for “non” disclosure against immovable property “beside” aggregate value of property is “not” exceeding INR 20 lac

(D) Assessment, Penalty, Fee and Prosecution

13. What is “new” Common order for assessment and penalty?

(Applicable from AY. 2027-28 under sec. 439 of ITA 2025)

• Now Common order will be issued for assessment and penalty for under reporting and misreporting of income to avoid “multiple” proceedings

14. Who is Assessing Officer (AO)?

(Applicable from Assessment Year (AY.) 2026-27 under section 148 and 148A of ITA 1961)

• Now explicitly stated that AO is to include jurisdictional AO “excluding” for National Faceless Assessment Centre (NaFAC)

15. What is “new” Restriction for 3^rd party’s multiple years assessments?

(Applicable from Assessment Year (AY.) 2026-27 under section 296 of ITA 1961)

• Now restriction is imposed on 3^rd party (other person) “multiple” assessments whose information’s are received during a search therefore 1 “specific” year’s assessment is allowed on 3^rd party (other person)

16. What is “new” Reference point for limitation’s computation?

(Applicable from Assessment Year (AY.) 2026-27)

• Now date of search initiated / requisition made will be treated a reference point for limitation’s computation against block assessment

17. What is “new” Timeline for completion of assessments after search?

(Applicable from Assessment Year (AY.) 2026-27)

• Now timeline for completion of assessments “after” search is increased to 18 months from 12 months

18. What is “new” Fee for failure to get accounts audited?

(Applicable from AY. 2026-27 under sec. 271B of ITA 1961)

• Now fee INR 75 thousand for delay 1 month and INR 150 thousand for delay “more than” 1 month will be applied “instead” 0.50% or 150 thousand whichever is higher

19. What is “new” Fee for failure to furnish Transfer Pricing (TP) Report?

(Applicable from AY. 2027-28 under sec. 428(d) of ITA 2025)

• Now fee INR 50 thousand for 1 month delay and INR 100 thousand for “more than” 1 month delay will be applied “instead” fixed INR 100 thousand

20. What is “new” Fee for failure to furnish statement of financial transactions?

(Applicable from AY. 2027-28 under sec. 427(3) of ITA 2025)

1. Now fee INR 200 per day or maximum INR 100 thousand whichever is lower will be applied “instead” INR 500 per day “without” maximum amount

21. What is “new” Fee for failure to furnish statement “after” notice issued?

(Applicable from AY. 2026-27 under sec. 271F of ITA 1961)

• Now fee INR 1 thousand per day or maximum INR 100 thousand whichever is lower will be applied “instead” INR 1 thousand per day “without” maximum amount

22. What is “new” Penalty for failure to file Statement of Financial Transaction (SFT)?

(Applicable from AY. 2027-28 under sec. 427(3) of ITA 2025)

• Now penalty INR 200 per day will be applied for failing to file Statement of Financial Transactions (SFT) to stop “non” compliances in reporting against Virtual Digital Assets (VDAs)

23. What is “new” Penalty for disclosing “inaccurate” information’s?

(Applicable from AY. 2027-28 under sec. 509 of ITA 2025)

• Now Penalty INR 50 thousand will be applied for disclosing “inaccurate” information’s or failure to rectify “inaccurate” information’s in reporting against VDAs

24. What is “new” Immunity from penalty or prosecution?

• Now “certain” penalty / prosecution will be converted into “additional” Income tax when under reporting of income is due to mis-reporting

(E) Data Centre Services (DCS)

25. What is “new” Income Tax on DCS?

(Applicable from AY. 2027-28 to 2047-48 ITA 2025)

S. No	Particulars	New provisions	Old provisions
(i)	DSC owned and operated by Domestic companies	0%	0%
(ii)	DSC owned and operated by Foreign companies	100%	100%

26. What is “new” Exemption’s nature for DCS?

(Applicable from AY. 2027-28 to 2047-48 ITA 2025)

• Now “Foreign” companies’ income is exempted when “any income” is accruing / arising / deemed to accrue / arise from DCS, existed in “notified” data centre, owned and operated by “domestic” companies

27. What is “new” Timeline for DCS exemption?

(Applicable from AY. 2027-28 to 2047-48 ITA 2025)

• Now DCS exemption is available up to March 31, 2047 subject to certain “specified” conditions like:

(i) “Foreign” companies are “not” permitted to own or operate “any” physical infrastructure or resource of data centre in India

(ii) “Foreign” companies are required to make 100% sales to users in India through Indian “re-seller” companies “only”.

(F) Foreign companies

28. What is “new” Exempted incomes for foreign companies?

(Applicable from AY. 2027-28 to AY. 2031-32 under ITA 2025)

• Now “Foreign” companies’ incomes are exempted when “any income” is arising in India from providing capital goods and equipment or tooling to a “contract” manufacturer located in Custom Bonded Warehouse (CBW) “and also” producing electronic goods on behalf of “same foreign” companies “after” satisfaction of “certain” conditions “both”

29. What is “new” Timeline for foreign companies?

(Applicable from AY. 2027-28 under ITA 2025)

• Now Exemption on income from providing capital goods and equipment or tooling are available up to March 31, 2031 “after” satisfaction of “certain” conditions

(G) International Financial Services Centre (IFSC)

30. What are “new” provisions for deduction in IFSC?

(Applicable from AY. 2027-28 under ITA 2025)

S. No	Particulars	Under ITA 2025	Under ITA 1961
(i)	@ 0% Income tax for unit in IFSC	20 “consecutive” years out of 25 years	10 consecutive years out of 15 years
(ii)	@ 0% Income tax for OBUs in IFSC	20 “consecutive” years	10 consecutive years
(iii)	@ 15% Income tax for units and OBUs in IFSC	After “consecutive” 20 years	Income tax with normal slab rates

31. What are “new” Exemptions for deemed dividend in IFSC?

(Applicable from AY. 2027-28 under ITA 2025)

• Now deemed dividend tax will be exempted when advances / loans are made between 2 group entities in “certain” circumstances like:

(i) When 1 entity is finance company or finance unit working in IFSC

(ii) When 1 entity is located “outside” India

(iii) When parent or principal entity is listed on “notified foreign” stock exchange

(H) Minimum Alternative Tax (MAT)

32. What is “New” MAT?

(Applicable from AY. 2027-28 under sec. 206 of ITA 2025)

S. No	Particulars	Under ITA 2025	Under ITA 1961
(i)	MAT rates	14%	15%
(ii)	MAT Credits	“Not” Allowed	Allowed

33. What is “Old” MAT credit’s set-off in next years?

(Applicable from AY. 2027-28 under sec. 206 of ITA 2025)

S. No	Particulars	Under ITA 2025	Under ITA 1961
(i)	For Domestic companies	25%	100%
(ii)	For Foreign companies	100%	100%

34. What is MAT exemption under “new” MAT?

(Applicable from AY. 2027-28 under ITA 2025)

• Now “Foreign” companies and Non–residents are permitted for MAT’s exemption when these are involved in “certain” businesses like:

(i) Business of operating cruise ships

(ii) Business of providing services / technology for setting electronics manufacturing facility in India to the resident companies

35. What is MAT credit under “new” MAT?

• Now MAT credit is “not” available under “New” MAT when MAT’s rate is 14%

(I) TCS and TDS

36. What is “new” TDS for manpower supply?

(Applicable from AY. 2026-27 under sec. 194C of ITA 1961)

(i) Now payments for supply of manpower are “explicitly” classified as contract for “work” to resolve previous ambiguities under section 194C of ITA 1961

(ii) Now payments for supply of manpower are “explicitly not” classified as fees for professional or technical services under section 194J of ITA 1961

37. What are “new” TDS rates for manpower supply?

(Applicable from AY. 2026-27 under sec. 194C of ITA 1961)

(i) @ 1% when payee is an Individual or Hindu Undivided Family (HUF).

(ii) @ 2% when payee is “not” Individual or Hindu Undivided Family (HUF)

38. What is “new” TDS limit for manpower supply?

(Applicable from AY. 2026-27 under sec. 194C of ITA 1961)

• Now 0% TDS when a single payment “not” exceeding INR 30 thousand or the “aggregate” payments “not” exceeding INR 100 thousand in 1 financial year

39. What is “new” TDS rate when payee “not” providing PAN?

(Applicable from AY. 2026-27 under sec. 206AA of ITA 1961)

• @ 20% TDS when payee is “not” providing Permanent Account Number (PAN)

40. What is “new” Lower or NIL deduction certificate?

(Applicable from AY. 2026-27 under clause 395 of ITA 2025)

• Now rule-based “automated” process is introduced for small taxpayers through e-applications for obtaining lower or NIL deduction certificate

41. What is “new” TAN for buying property from “non” residents?

(Applicable from AY. 2026-27 under sec. 194-IA of ITA 1961)

• Now resident individuals and HUFs are “not” required to obtain Tax Deduction and Collection Account Number (TAN) for TDS on payments to “non” residents for acquiring immovable property from them.

42. What is “new” TDS for Motor Accident Claim (MAC)?

• Now TDS is “not” applicable on interest awarded on compensation by Motor Accidents Claims Tribunal (MACT) to individuals.

43. What is “new” Income tax for MAC?

• Now interest on compensation is exempted under ITA, 2025 for ensuring victims to receive 100% amounts “without” financial erosion

(J) Safe Harbour Rules (SHR)

44. What is “new” limit for SHR?

• Now revenue limit is increased to INR 2000 crore from 300 crore for SHR against IT or services exporters

45. What are “new” Eligible services for 15.5% uniform margin?

(i) Software development services

(ii) IT enabled services

(iii) Knowledge Process Outsourcing (KPO) services

(iv) Contract research and development services for software development

46. What are “new” Choices for 15.5% uniform margin?

• Taxpayers are permitted for opting automated rule–based approval process “and also” 15.5% uniform margin for maximum 5 years “both”

47. What are “new” Rules for 15.5% uniform margin?

• CBDT is required to notify “separate” rules for 15.5% uniform margin

48. What are “new” Unilateral APAs?

(i) Now unilateral Advance Pricing Agreement (APA) for IT services companies are to be concluded within 2 years by appropriate authority

(ii) Now IT services companies are permitted to make request to appropriate authority that unilateral APAs may be concluded within 6 months

49. What is “new” Timeline for filling original / revise ITR?

• Associate enterprise (related party) is permitted to file original / revise ITR within 3 months from the end of month when APA is entered

50. What is “new” Procedure for computing ALP within 60 days?

(Applicable from June 01, 2007 under sec. 92CA(3A) of ITA 1961)

• Now Transfer Pricing Officer (TPO) is permitted for computing Arm’s Length

Price (ALP) within 60 days when statutory time limit for completion of assessment or reassessment expires on “specific” date

51. What is “new” Date for computing ALP within 60 days?

(Applicable from June 01, 2007 under sec. 92CA(3A) of ITA 1961)

• Now effective date is June 01, 2007 for computing ALP within 60 days when statutory time limit for completion of assessment or reassessment expires on “specific” date

52. What is “new” Definition for accountant?

• Now definition of accountant is to be rationalized for SHR to enable home-grown accounting and advisory firms to become global leaders.

53. What are “Additional” services for SHR?

(i) Now Data Centre Services (DCS) by “non” residents are “additionally” included for SHR based on cost plus 15% margin

(ii) Now Component warehousing in a bonded warehouse by “non” residents are “additionally” included for SHR based on 2% margin on the invoice value

54. What are “Privileges” for DCS?

(i) Now SHRs based on cost plus 15% margin are available for DCS

(ii) Now tax exemptions for DSC are available similar to long term tax holidayed. up to March 31, 2047

(iii) Now tax exemptions for DSC are available “specifically to foreign” cloud providers using “Indian” data centres

(K) Non-Profit Organizations (NPOs)

55. What is “new” Merger between 2 registered NPOs?

(Applicable from AY. 2027-28 under sec. 354A of ITA 2025)

(i) Now Income tax is “not” to be imposed on accumulated income when merger is between 2 registered NPOs having same / similar objects “and also” satisfied “certain” conditions “both”.

(ii) Now Income tax is to be imposed on accumulated income when merger is between 2 registered NPOs but “not” having same / similar objects or “not” satisfied “certain” conditions.

(iii) Now Income tax is to be imposed on accumulated income when merger is between 2 registered NPOs but “not” satisfied “certain” conditions

56. What is “new” Merger between registered and “non” registered NPOs?

(Applicable from AY. 2027-28 under sec. 354A of ITA 2025)

• Now Income tax is to be imposed on accumulated income when merger is between registered and “non” registered NPOs “beside” having same / similar objects “and also” satisfied “certain” conditions “both”.

57. What are “new” provisions for Business activities exceeding 20%?

(Applicable from AY. 2027-28 under sec. 351 and 353 of ITA 2025)

• Now NPOs registration’s cancellation and other implications are “not” required when business activities are exceeding 20% of total receipts where satisfied “certain” conditions.

(L) Capital gains tax for Buy-Back of shares

58. What is “new” Capital gain tax for Buy-Back of shares?

(Applicable from AY. 2027-28 under sec. 2(40)(f) and 69 of ITA 2025)

(i) Now Buy-back of shares by promoters are to be taxed as capital gains

(ii) Now consideration received on the buy-back of shares or specified securities is to be chargeable to tax as capital gains instead of being treated dividend income

59. What is “Additional” capital gain tax for Buy-Back of shares?

• Capital gain tax on the capital gains for buy-back of shares is an “aggregate” amount of Income tax payable and “additional” income tax payable “both”

60. Who are Promoters for listed companies?

• Promoters are to include as defined under Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 2018 for listed companies

61. Who are Promoters for “non” listed companies?

• Promoters are to include as defined under Companies Act, 2013 or “any” person holding directly/indirectly the companies shareholding exceeding 10%

62. What are “new” Capital gain tax “rates” for Buy-Back of shares?

S. No	Particulars	When promoter is domestic co.	When promoter is “not” domestic co.
(i)	Short-term capital gains on listed shares	22% (20.00+2.00)	30% (20.00+10.00)
(ii)	Long-term capital gains on listed shares	22% (12.50+9.50)	30% (12.50+17.50)
(iii)	Short-term capital gains on “non” listed shares	Applicable slab	Applicable slab
(iv)	Long-term capital gains on “non” listed shares	22% (12.50+9.50)	30% (12.50+17.50)

Note:

(i) These rates are “excluding” applicable surcharge and cess

(ii) “New” capital gains tax is equivalent to “old” tax rate + “additional” tax rate “both”

63. What is “new” Capital gain tax for Sovereign Gold Bonds (SGB)?

(Applicable from AY. 2027-28 under sec. 70(1)(x) of ITA 2025)

(i) Now Capital gain tax on redemption of SGB will be exempted when RBI’s “original” subscriber is holding bonds “continuously” till maturity.

(ii) Now Capital gain tax on redemption of SGB will “not” be exempted when purchased from “original” subscriber.

(iii) However, interest on SGB is “not” exempted

(M) Penalties and Prosecutions

64. What are “new” Rigorous imprisonments converted into simple imprisonments?

• Now “certain” rigorous imprisonments will be reduced to simple imprisonments as initiative aims to decriminalize “minor” tax offenses i.e. removing “mandatory” minimum and rigorous sentences for “certain” failures like:

(i) TDS defaults

(ii) Tax evasions

(iii) Obstructing searches

(iv) “Non” production of books of account

(v) Etc.

65. What are “new” Maximum punishments restricted to 2 years?

• Now “maximum” punishments will be reduced to 2 years from 7 years for “1^st” offence

66. What are “new” Maximum punishments restricted to 3 years?

• Now “maximum” punishments will be reduced to 3 years from 7 years for “subsequent” offence

67. What are “new” Gradations for tax evasion?

• Now gradations will be introduced for tax evasion amounts in accordance with punishments

68. What are “new” Maximum fines restricted to INR 10 lac?

• Now “maximum” fines will be reduced INR 10 lac

69. What are “new” Penalties converted into fines?

• Now “certain” penalties will be converted into fines

70. What are “new” Imprisonments converted into fines?

• Now “certain” imprisonments will be converted into fines

71. What are “new” Offences discriminated?

• Now “certain” offences will be discriminated

72. What are “new” Prosecution proceedings “not” to be initiated?

• Now prosecution proceedings will “not” be initiated when the tax amount is “not” exceeding INR 10 lac.

73. What are “new” Prosecution proceedings converted into fines?

• Now prosecution proceedings will be converted into fines when the tax amounts are “not” exceeding INR 10 lac.

74. What are “new” Prepayments for demand recovery stay?

• Now quantum of prepayment for stay of tax demand’s recovery will be reduced to 10% from 20%

(N) Miscellaneous

75. What is “new” defective DIN?

(Applicable from Oct 01, 2019 under sec. 292B of ITA 1961)

• Now assessment notices, summons or other proceedings will “not” be treated invalid or deemed to be invalid for “any” mistake, defect or omission against computer–generated DIN. This is a clarification “not” an amendment.

76. What is Date for “not” accepting defective DIN?

(Applicable from Oct 01, 2019 under sec. 292B of ITA 1961)

• Now proposed clarification will be effective retrospectively from Oct 01, 2019

77. What are “new” tax rate for “unexplained” credits, investments, expenditure etc.?

S. No	Particulars	under ITA 2025	under ITA 1961
(i)	Additions on account of unexplained credits, investments, assets, expenditures etc.	30%	60%

78. What is Interest “not” allowed against dividend?

(Applicable from AY. 2025-26 under sec. 93(2) of ITA 1961)

• Now interest will “not” be allowed against dividend income where interest was allowable up to 20% “before” this amendment.

79. What are “new” Deductions for employee contributions?

(Applicable from AY. 2027-28 under sec. 17(1)(h) of ITA 1961)

• Now Employee contributions for provident fund and superannuation fund deducted by employer and deposited on or before the due date of ITR are deductible for computing taxable income of employer.

80. What are “new” Lower deduction certificates (15G and 15H)?

(Applicable from AY. 2027-28 under sec. 393(6) of ITA 2025)

(i) Now payees are permitted to file Form 15G and 15H online / electronically

(ii) Now payees are permitted to file Form 15G and 15H to depositoriese. CDSL and NSDL for lower deduction on interest, dividends and income from mutual fund units.

(iii) Now payees are required to forward 15G and 15H to payers simultaneously

81. What are “new” Allowable expenditures for critical minerals?

(Applicable from AY. 2027-28 under sec. 51 of ITA 2025)

• Now expenditures are allowable for “certain” critical minerals in year of commercial production and for 4 previous years like:

(i) Beryllium bearing minerals

(ii) Glauconite

(iii) Graphite

(iv) Indium bearing minerals

(v) Lithium bearing minerals

(vi) Niobium bearing minerals

(vii) Potash

(viii) Rhenium bearing minerals

(ix) Tantalum bearing minerals

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(Author can be reached at email address satishagarwal307@yahoo.com or on Mobile No. 9811081957)

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