🧾 Income Tax Updates
🚨 IT Dept Cracks Down on Fraudulent ITR Refund Scams
📖 Summary:
The Finance Ministry has announced the initiation of strict actions against fraudulent tax activities, especially rackets run by intermediaries promising inflated tax refunds. A nationwide verification drive is underway to identify and penalize involved individuals and entities.
💡 Practical Insight:
Professionals must exercise extreme caution and heightened diligence. It is crucial to advise clients to be wary of unsolicited offers for higher refunds and ensure all claims are backed by genuine documents to avoid severe scrutiny and penalties.
💰 CBDT Extends Tax Relief for Sovereign Wealth & Pension Funds
📖 Summary:
The CBDT has extended the income tax exemption available to Sovereign Wealth Funds and Pension Funds under Section 10(23FE). The benefit, earlier available until March 31, 2025, is now extended to March 31, 2030, continuing the incentive for foreign investment in India's infrastructure sector.
💡 Practical Insight:
This long-term extension provides stability and certainty for foreign funds investing in India. Fund managers should ensure their investments continue to meet all prescribed conditions to maintain eligibility for this valuable tax exemption.
🏢 GST Law & Compliance
🚨 [CRITICAL] GSTR-3B Filing is Now Final: No Revisions Allowed
📖 Summary:
A major compliance shift effective from July 1, 2025: once GSTR-3B is filed, it cannot be edited or revised. This change makes every submission final for that tax period, significantly increasing the risk associated with inaccurate reporting or data entry errors.
💡 Practical Insight:
This mandates a rigorous, multi-level pre-filing verification process. Businesses must reconcile all data meticulously, including outward supplies, ITC claims, and tax payments, before submission. 👉 *Consult your CA immediately to tighten internal controls for GST compliance.*
⚖️ GSTN Allows Online Appeals for Rejected Amnesty Applications
📖 Summary:
The GST Network has enabled a new functionality allowing taxpayers to file online appeals against orders (FORM GST SPL-07) that have rejected their applications under the GST Amnesty Scheme. This provides a formal recourse for aggrieved applicants.
💡 Practical Insight:
This is a welcome relief for businesses whose amnesty applications were rejected. It provides a structured digital pathway to challenge the decision, potentially saving significant time and litigation costs. This is immediately actionable for clients who received rejection orders.
🔐 GSTN Enhances Data Security for ASP-GSP Users
📖 Summary:
GSTN has issued a new advisory detailing enhanced data security measures for taxpayers utilizing Application Service Provider (ASP) and GST Suvidha Provider (GSP) platforms for their GST compliance activities.
💡 Practical Insight:
Taxpayers using third-party software for GST compliance should promptly review the new security protocols with their service providers. This ensures their financial data remains protected and they are fully compliant with the new requirements.
🗂️ Compliance & Portal Updates
💻 [CRITICAL] ITR-2 for AY 2025-26 Live with Major Schema Changes
📖 Summary:
The online filing utility for ITR-2 is now live on the e-filing portal for AY 2025-26. The due date for filing for taxpayers not requiring an audit is extended to September 15, 2025. The form contains significant schema changes that require careful attention.
💡 Practical Insight:
Key changes to address before filing:
- Capital Gains: Requires separate reporting for gains arising before and after July 23, 2024.
- Assets/Liabilities: Disclosure threshold increased. Now required only if total income exceeds Rs. 1 crore (previously Rs. 50 lakh).
- Share Buybacks: Proceeds from buybacks after October 1, 2024, need specific reporting treatment in both capital gains and other income schedules.
🏛️ Recent Important Tax Judgments
🧑⚖️ Landmark Clarification: Bombay HC Cites CBDT Circular to Dispose Low-Value Tax Appeal
📖 Summary:
In a significant ruling, the Bombay High Court disposed of a revenue appeal where the tax effect was below the prescribed monetary limit. The court affirmed that the revised limits in CBDT Circular No. 5 of 2024 (raising the HC limit to Rs. 2 crore) supersede previous instructions and their exceptions.
💡 Practical Insight:
This ruling strongly reinforces the CBDT's policy to reduce government litigation. Taxpayers with pending High Court appeals where the tax effect is below Rs. 2 crore can expect their cases to be withdrawn, providing significant relief from prolonged legal battles.
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