Foreign Assets disclosure scheme operationalized - CBDT prescribes valuation rules, forms and compliance framework

 This Tax Alert summarizes the recent Notification notifying “The Foreign Assets of Small Taxpayers - Disclosure Scheme Rules 2026” (Rules) issued by the Central Government and 50 Frequently Asked Questions (FAQs) issued by Central Board of Direct Taxes^[2] (CBDT), pertaining to “The Foreign Assets of Small Taxpayers – Disclosure Scheme 2026” (Scheme) which was introduced vide Finance Act (FA) 2026^[3].

Taxability of Crypto Derivatives Under Indian Income-tax Law

 The Finance Act, 2022 introduced India's first dedicated tax regime for Virtual Digital Assets (VDAs) through Sections 2(47A), 115BBH and 194S of the Income-tax Act, 1961. The framework was designed to tax income arising from the transfer of cryptocurrencies, NFTs and similar digital assets.

However, the growing popularity of crypto futures and options traded on offshore exchanges has created an interpretational challenge. Unlike spot crypto transactions, many derivative contracts are cash-settled, meaning parties pay or receive only the price difference without acquiring, delivering or transferring the underlying cryptocurrency.

This raises a crucial question: should profits from cash-settled crypto derivatives be taxed under the special VDA regime of Section 115BBH, or under the ordinary provisions relating to business income and speculative transactions? The answer has significant tax implications because the two regimes operate differently.

GAAR vs SAAR: A Practical Note for Businesses in India

 Taxation is one of the most significant financial obligations for any business. Alongside managing operations, growth, and profitability, companies must carefully plan their tax affairs to ensure compliance while optimizing cash flows. Effective tax planning begins well before the financial year-end and typically involves using the deductions, exemptions, and incentives provided under the Income-tax Act, 1961.

India’s Position on the OECD Model Tax Convention – At a Glance

 Comparison table highlighting how India’s treaty policy differs from the OECD Model Tax Convention, especially on key articles such as Permanent Establishment (Article 5), Business Profits (Article 7), Royalties (Article 12) and Capital Gains (Article 13).

𝗪𝗼𝗿𝗸𝗶𝗻𝗴 𝗖𝗮𝗽𝗶𝘁𝗮𝗹 𝗮𝗱𝗷𝘂𝘀𝘁𝗺𝗲𝗻𝘁 𝗰𝗮𝗻𝗻𝗼𝘁 𝗯𝗲 𝗺𝗮𝗱𝗲 𝗶𝗻 𝘁𝗵𝗲 𝗮𝗯𝘀𝗲𝗻𝗰𝗲 𝗼𝗳 𝗮𝗻𝘆 𝗳𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 𝗰𝗼𝘀𝘁

 In DCIT v. Coca Cola India Inc., the Delhi ITAT held that a Working Capital Adjustment cannot be made merely because receivables from an AE remain outstanding for an extended period. The Tribunal observed that such adjustments under TNMM are intended to improve comparability and must be supported by evidence of actual financing cost or economic disadvantage. Since the assessee had no external borrowings, incurred no interest cost, and was fully funded by its US Head Office, the Revenue failed to establish any real financial burden arising from delayed receivables. Accordingly, the TP adjustment was deleted.

TAX AMENDMENT BILL 2026

The Lok Sabha has passed the Taxation & Other Laws (Amendment) Bill, 2026 (‘Amendment Bill’). The said Amendment Bill replaces the Income-tax (Amendment) Ordinance, 2026 which was earlier passed on 5 June 2026 and also proposes other amendments to the Income-tax Act, 2025 (‘the Act’), the most notable amendment being in respect of taxation of unitholders and SPVs of business trusts.

SC confirms omission of Rule 96(10) applies to even pending proceedings absence any saving clause

 This Tax Alert summarizes a recent judgement of the Supreme Court (SC)^[1] dealing with the effect of omission of Rule 96(10) of the Central Goods and Services Tax Rules, 2017 (CGST Rules) on any proceedings pending disposal on the date of such omission.

Rule 96(10) inter alia restricted any person from claiming refund of integrated tax paid on export of goods or services if benefit of specified exemption notifications was availed. The said rule was omitted w.e.f. 8 October 2024^[2].

Subsequently, the Gujarat High Court (HC)^[3] held that such omission will be applicable to all proceedings/cases which are pending for final adjudication either before courts or adjudicating authorities. Revenue filed an appeal before SC.

The key observations of the SC are:

Delhi HC holds 10% pre-deposit requirement for penalty-only appeals inapplicable where SCN was issued before amendment

 This Tax Alert summarizes a recent ruling of the Delhi High Court (HC)^[1] on whether the newly introduced pre-deposit requirement for filing an appeal against penalty-only order applies where the show cause notice (SCN) was issued before 1 October 2025, while the adjudication order was passed thereafter.

The key observations of the HC are:   

Karnataka HC holds HSNS Cess framework unconstitutional due to manner of Cess calculation

 This Tax Alert summarizes a recent ruling of the Karnataka High Court (HC) ^[1] on the constitutional validity of Health Security se National Security Cess Act, 2025 (HSNS Cess Act), the Health Security se National Security Cess Rules, 2026 (HSNS Cess Rules) and the notifications issued thereunder.

The key observations of the HC are:

GSTN keeps proposed e-Way Bill enhancements on hold until further notice

 This Tax Alert summarizes the recent advisory¹ issued by Goods and Services Tax Network (GSTN) keeping the proposed enhancements to the e-Way Bill system on hold until further notice.

The key observations of the HC are:

TAX DUE DATE - AUGUST 2026.

 

Sl. No	Due Date	Related to	Compliance to be made
1	11.08.2026	GST	Filing of GSTR – 1 for the month of July 2026
2	31.08.2026	Income Tax	Filing of Form 10 of Charitable Trust
3	13.08.2026	ISD	Filing for the month of July 2026
4	20.08.2026	GST	Payment & filing of GST return for the Month of July 2026 - Form GSTR 3B
5	07.08.2026	TDS/TCS (Income Tax)	· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of July 2026. · Deposit TDS from Salaries deducted during the month of July 2026 Deposit TCS for collections made under section 394 including sale of scrap during the month of June 2026 if any Deliver a copy of Form 121(15G/15H), if any to CCIT or CIT for declarations received in the month of June 2026, if any

The Forensic Ledger: Spotting Early Warning Signals of Employee Embezzlement in Small Businesses

-Sakshi Agarwal 

 Let’s start with a small story in this regard. Client B runs a highly successful, medium-sized manufacturing firm that produces industrial packaging. Because he spent most of his time on the factory floor and pitching to new clients, he entrusted his entire back-office operations to Mr. A, a loyal senior accountant who had been with the company for over a decade. Mr. A was considered part of the family; he rarely took vacations, worked late on weekends, and single-handedly managed vendor payments, payroll, and bank reconciliations.

Kentucky Sales Tax Changes Effective August 1, 2026: What Businesses Need to Know

 

Kentucky has introduced several important sales and use tax developments that take effect August 1, 2026. If your business sells products or services into Kentucky—especially digital offerings or through remote sales channels—now is a good time to review your compliance obligations.

Here are the key updates:

Protecting Taxpayer Rights: Three Landmark Indian Tax Rulings

 Recent judicial pronouncements have provided significant clarity on the rights of taxpayers and the limitations of tax authorities under Indian tax law. Three important rulings—from the Supreme Court on GST input tax credit, the Chennai ITAT on income tax penalties, and the Mumbai ITAT on demergers—offer crucial guidance for businesses navigating complex tax disputes. Each decision reinforces the principle that tax authorities must act within statutory boundaries and cannot penalize taxpayers arbitrarily.