Income Tax Rules Update
CA Raj Chawla
Quotes of the day:
1. Good & Bad, Happy & Sad, Anger & Peace, Fear & Bold, Love & Hatred etc. All are just two faces of a coin. Learn to live with them and enjoy every moments of your life.
2. Life is like a Piano, The white keys are happy days and black keys are like sad ones. Just remember that you need both to make music.
Income Tax Rules Update
1. Central Board of Direct Taxes (CBDT) has notified the Income-tax Rules, 2026, establishing a comprehensive procedural framework for the Income-tax Act, 2025. These rules will come into effect from April 1, 2026, and aim to simplify tax compliance, reduce disputes, and improve governance .
Key Highlights:
2. Unified Tax Year*: Replaces the existing Financial Year and Assessment Year with a single Tax Year.
3. Revised ITR Filing Deadlines*:
· Salaried individuals and simple cases (ITR-1, ITR-2): July 31
· Business/profession (non-audit): August 31
· Companies and audit cases: October 31.
4. Tax Collected at Source (TCS) Changes*:
· Reduced TCS on education and medical remittances above ₹10 lakh from 5% to 2%
· Uniform 2% TCS on overseas tour packages.
5. Securities Transaction Tax (STT) Changes*:
· Increased STT on options sale from 0.10% to 0.15%
· Increased STT on futures sale from 0.02% to 0.05%
· Buyback Taxation*: Income from share buybacks taxed as capital gains
· Simplified PAN-Based TDS System*: Buyers can use PAN-based challans for TDS on property purchases from NRIs.
6. GST on Used Car Sale: If you're selling a used car and aren't a registered second-hand goods dealer, you'll need to pay GST on the full sale consideration, not just the profit margin. This ruling came from the Authority for Advance Ruling (AAR) under GST, Tamil Nadu, in the case of Ponnusamy Thangaraj (Order No. TN/4/ARA/2026, decided on 12-1-2026).
7. The applicant, a manufacturer, had purchased a car for personal use, capitalized it in business books, and didn't claim input tax credit or depreciation. When selling the car, they sought to apply the margin-based valuation, but the AAR ruled that since they weren't in the business of dealing in second-hand goods, tax is payable on the full value of consideration .
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With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
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