Other Notable tax-related developments occurred in India
Direct taxes
- Record personal tax collections: For the first time in India's history, personal income tax (PIT) collections have surpassed corporate tax collections. This shift is attributed to increased formalization, digitization, and improved compliance.
- CBDT issues FAQs on new Act: The Central Board of Direct Taxes (CBDT) announced plans to release Frequently Asked Questions (FAQs) and streamlined rules to help taxpayers understand the newly notified Income-tax Act, 2025.
- Relief on low-value foreign assets: The Income Tax Department has decided to eliminate prosecution provisions for the non-disclosure of low-value foreign assets up to ₹20 lakh, following an announcement in Budget 2024.
- Tax raids on bogus trusts: The Income Tax Department has uncovered a network of bogus trusts allegedly involved in laundering Corporate Social Responsibility (CSR) funds. A wider search is underway to identify the implicated companies.
International and cross-border taxes
- Mauritius fine-tuning tax treaty: Mauritius's Minister of Financial Services and Economic Planning, Jyoti Jeetun, stated that the country hopes to "fine-tune" the tax treaty with India soon. The two countries are working to finalize a protocol amending their Double Taxation Avoidance Agreement (DTAA).
- Revised corporate tax rate for foreign companies: A lower corporate tax rate of 35% for foreign companies is scheduled to take effect from April 1, 2025.
- Increased scrutiny of luxury purchases: Reports suggest that the government is closely monitoring luxury purchases exceeding ₹10 lakh, raising concerns among tax experts about potential compliance hurdles.
Tax compliance and administration
- Extension of tax deadlines requested: Several professional bodies, including the Chandigarh Chartered Accountant Taxation Association (CCTAX), have appealed to the CBDT to extend tax audit and ITR filing deadlines. The request is based on persistent portal glitches, data mismatches, and disruptions from recent monsoon rains.
- EPFO compliance update: Following a July 2025 circular, employers must accurately report gross wages in the Electronic Challan-cum-Return (ECR) from August 2025 onwards. This is to correctly identify employees eligible for the ELI Scheme, which offers incentives for employers and employees whose wages are under ₹1,00,000 per month.
Faceless assessment scheme
- Expansion of physical verification powers: An August 2024 CBDT order expanded the powers of Income Tax Verification Units, allowing them to conduct physical verification in specific circumstances. This includes cases where there is an absence of a digital footprint, non-compliance with online notices, or a clear need for physical inspection.
- High courts address procedural errors: High courts have issued several rulings regarding the faceless assessment regime. For instance, the Delhi High Court ordered fresh adjudication for a GST demand that contained duplication errors, while the Calcutta High Court remanded a GST appeal because the assessee was not properly notified.