Long-term capital losses available against gains from transfer of depreciable assets

 Recently, the Mumbai ITAT in ACIT v. Reliance Infrastructure Limited ruled in favour of the taxpayer and reaffirmed that the special computational treatment applicable to gains arising from transfer of depreciable assets does not alter the inherent character of the underlying asset. Accordingly, where the asset transferred is a long-term capital asset, the taxpayer remains entitled to utilise available long-term capital losses against such gains.

Bombay HC Clarifies That Genuine Bad Debt Write-offs Need Not Fail for Accounting Technicalities

 Businesses often find themselves in a peculiar position when a customer default turns into a prolonged dispute. Even where recovery proceedings are actively being pursued, companies may commercially conclude that the amount is doubtful and provide for it in their books. The tax department has traditionally taken a view that unless each debtor account is formally written off, the deduction for bad debts should not be available. The Bombay High Court has held that the allowability of a bad debt claim must turn on the substance of the accounting treatment and not merely on the form of the entries passed.

Navigating the Complexities of GST Pre-deposit Requirements Before GSTAT

 The introduction of the Goods and Services Tax Appellate Tribunal (GSTAT) has brought significant changes to the pre-deposit framework for taxpayers appealing adverse orders. Understanding these nuanced requirements is essential for ensuring seamless appellate proceedings and avoiding procedural pitfalls.

Power of Commissioner to Reduce or Waive Income Tax Penalty

Overview of Penalties Under the New Act

Before looking at the waiver provisions, it's helpful to know what penalties exist. The 2025 Act, under Chapter XXI, continues to impose penalties for various defaults, including:

• Under-reporting and misreporting of income (Section 439)

• Failure to keep, maintain, or retain books of account (Section 441)

• Failure to get accounts audited (Section 442)

• Failure to deduct TDS (Sections 448 & 449)

Cross border 'fast track' merger permitted under automatic route

On 6 June 2026, the Reserve Bank of India (RBI) issued a notification ^[1] amending the rules governing cross-border mergers under the Foreign Exchange Management Act, 1999 (FEMA), as part of India’s ongoing efforts to simplify the regulatory framework and enhance ease of doing business.

Inbound Merger of a U.S. Company into an Indian Company: Regulatory Framework, Benefits and Key Compliance Requirements

Introduction

India has emerged as a preferred jurisdiction for multinational groups and technology startups seeking to simplify global structures, access Indian capital markets, and align their corporate domicile with business operations. One of the most effective mechanisms for achieving this objective is an inbound merger, wherein a foreign company merges into an Indian company, and the Indian company becomes the surviving entity.

A common scenario involves a U.S. holding company being merged into its Indian subsidiary or affiliate, resulting in the Indian company absorbing the U.S. entity. This structure has gained significant momentum due to the increasing trend of "reverse flipping," where overseas holding companies relocate their corporate headquarters to India in anticipation of domestic fundraising or public listing opportunities. Recent regulatory reforms have also streamlined the approval process for eligible inbound mergers, making India a more attractive destination for corporate reorganizations.

GST Insights: Three Key Rulings on Taxability, Intermediary Status, and ITC

1. Healthcare Services Retain Exemption Even When Provided Through Another Hospital

Valuation vs Demerger: Kolkata ITAT Clarifies the Boundaries

 Recently, the Kolkata ITAT held that no addition under section 56(2)(x) can be made in respect of assets received pursuant to a qualifying demerger, where the prescribed conditions under the Income-tax Act are duly satisfied. The Tribunal further clarified that valuation principles as prescribed under Rule 11UA of Income-tax Rules (ordinarily applicable for determining fair market value of shares) cannot be imported to challenge a demerger that otherwise complies with the statutory framework.

India Grants Full Tax Exemption to FIIs and BIS on Government Securities via Ordinance

 In a significant policy move, the Government of India has promulgated the Income-tax (Amendment) Ordinance, 2026, granting complete tax exemption to Foreign Institutional Investors (FIIs) and the Bank for International Settlements (BIS) on interest and capital gains arising from investments in government securities (G-Secs).

The ordinance, which took effect retrospectively from April 1, 2026, was promulgated by President Droupadi Murmu as Parliament was not in session.

Single Show Cause Notice for Multiple Financial Years Under GST: Why Courts Are Striking It Down

 A single show cause notice (SCN) issued for multiple financial years has become a common flashpoint under the Goods and Services Tax (GST) regime. While the tax department often adopts this practice for administrative convenience, it is now consistently being struck down by various High Courts across India. This article examines why such consolidated proceedings are legally untenable.