Navigating the New Foreign Remittance Compliance Regime under ITA 2025

 The transition to the Income-tax Act, 2025 (ITA 2025) and the accompanying Income-tax Rules, 2026 introduces a significantly overhauled compliance framework for foreign remittances and treaty benefit claims. The familiar forms—10F, 15CA, and 15CB—have been succeeded by Forms 41, 145, and 146 respectively. This rewrite outlines the key structural shifts, enhanced disclosure requirements, and a critical interpretational issue regarding treaty eligibility.

Asset' vs ‘Undertaking’: NCLAT provides clarity

 The scope of shareholder approval for asset sales has long been a contested area, particularly where high-value assets are involved. A recent ruling by the National Company Law Appellate Tribunal (‘NCLAT’) provides useful clarity on when such approval is actually required.

When Buy-Back Becomes a Restructuring Activity

 Not all share buy-backs are mere return of capital. Under certain conditions, a buy-back can be recharacterised as a restructuring activity – with significant tax and legal implications.

TDS Critical Takeaway from the Pfizer Case

A recent ruling in the Pfizer case has delivered an important lesson for taxpayers deducting TDS on cross-border payments.

Major Shift in LDC Framework: Act Now

A significant change under Section 395(1) of the Income-tax Act, 2025 is reshaping how Lower Deduction Certificates (LDCs) operate via TRACES.

⚠️ Critical Update: Starting April 1, 2026, a Master LDC Certificate will no longer be valid for quoting in TDS returns.

AIF Scheme Eligible for Pass-Through Exemption Despite Separate PAN

 In a recent ruling, the Mumbai Tribunal held that a scheme floated under a SEBI-registered Category II AIF trust can claim pass-through exemption, and such benefit cannot be denied merely because the scheme has a separate PAN while the SEBI registration stands in the name of the parent trust.

Withdrawn IPO Expenses treated as Revenue Expenditure

 The Delhi Bench of the Income-tax Appellate Tribunal ('Tribunal'), in a recent decision, held that expenses incurred on withdrawn IPO are revenue in nature and that income arising from foreign exchange differences and write-back of provisions qualifies for export-linked deductions.

Background

Gujarat HC – Relief for delay in opting concessional tax regime

 Gujarat High Court has granted relief to a taxpayer by allowing condonation of delay in opting for the new tax regime, holding that genuine and bona fide procedural delays may not result in denial of tax benefits.

Background

Indirect Transfer on Liquidation of a Foreign Holding Company

1. Introduction

Cross-border investment structures often employ intermediate holding companies in jurisdictions like the Cayman Islands. A common corporate restructuring step involves liquidating such a holding entity, which results in the upstream shareholder (for example, a Singapore company) acquiring direct ownership of the underlying subsidiaries—including, potentially, an Indian company.

ITAT Delhi – Cross border Buy-back may Qualify as Corporate Reorganisation whereby Capital Gains Not Taxable in India

 Recently, the Delhi Bench of the ITAT has held that a buy-back of shares within a corporate group can qualify as a “corporate reorganisation” under Article 13(5) of the India–Netherlands DTAA, thereby rendering the resultant capital gains taxable only in the Netherlands and not in India.

Recent Policy Changes Impacting Indian Manufacturing and Exports

 In a series of recent policy and regulatory interventions, the Government has introduced a set of measures aimed at strengthening export competitiveness, easing compliance, and enhancing domestic manufacturing resilience. Together, these measures spanning customs facilitation, import policy, sustainability regulation, and trade support reflect a calibrated policy response balancing trade facilitation, cost competitiveness, domestic industry protection, and sustainability alignment.