India Tax Due Date - February 2026.

 

Sr No	Due Date	Related to	Compliance to be made
1	11.02.2026	GST	Filing of GSTR 1 for the month of January, 2026

2	13.02.2026	GST	GST ISD for Jan 2026
3	20.02.2026	GST	Payment of GST for the month of January, 2026 Filing of GSTR 3B for the month of January, 2026

4

07.02.2026

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 January 2026. · Deposit TDS from Salaries deducted during the month of January 2026 • Deposit TCS for collections made under section 206C including sale of scrap during the month of January 2026, if any

Transfer of Right to Receive Flat under Development Agreement Taxable as LTCG

 In a recent ruling, the Kolkata ITAT held that gains arising from the transfer of a right to receive a flat under a development agreement are taxable as long-term capital gains where such right—emanating from the assessee’s pre-existing leasehold rights in land—was held for more than the prescribed period.

“The New Litigation Skill CAs Were Never Trained For: Writing for Algorithms, Not Officers”

 

Introduction

For generations, tax litigation was shaped by human interaction. Arguments were framed for officers, appeals were drafted with persuasion in mind, and representation relied heavily on professional intuition and experience. Chartered Accountants were trained formally and informally to write for people.

Mumbai ITAT holds tax liability can be determined during Insolvency Proceedings even though recovery of tax dues is barred

 Recently, Mumbai ITAT ruling has reaffirmed that while recovery of tax dues is barred during the subsistence of an IBC moratorium of insolvency proceedings, appellate proceedings before the ITAT being in the nature of determination of tax liability, are not prohibited.

The Tiger Global Ruling: A Watershed Moment in India's Treaty Jurisprudence

The recent Supreme Court judgment in the Tiger Global International II Holdings case is not merely another tax ruling. It is a seminal moment that crystallizes India's judicial stance on capital gains taxation, treaty entitlement, and the perennial tension between domestic anti-abuse provisions and international tax obligations. To fully grasp its significance, one must journey through over a century of legal evolution, from the dusty mines of South Africa to the modern corridors of global finance.

GST on Non-Compete Fees: A Key Consideration for Business Transactions

In the complex landscape of India’s Goods and Services Tax (GST), the tax treatment of non-compete fees has emerged as a critical area for businesses during mergers, acquisitions, or even employment contracts. Simply put, a non-compete fee is a payment made by one party to another in exchange for an agreement to refrain from conducting a similar business or profession within a specified geographical area and time period.

Navigating the Nexus: India's Evolving Stance on Permanent Establishment in the Digital Age

The concept of a Permanent Establishment (PE) serves as the cornerstone of international tax law, determining a country's right to tax the business profits of a foreign enterprise. Traditionally rooted in physical presence—an office, a factory, a management place—the PE principle is being stretched and redefined in our globalised, digitised economy. India, as a major market and a capital-importing nation, has been at the forefront of this evolution, aggressively interpreting and expanding PE provisions to protect its tax base. This article examines four critical frontiers in this ongoing recalibration: the advent of the Virtual PE, the nuanced interpretation of Service PE post the landmark Hyatt ruling, the emerging risks associated with the Home Office, and the policy direction suggested by the NITI Aayog report on profit attribution.

No GST on Assignment of Leasehold Rights: Bombay High Court Provides Clarity

 In a significant ruling that provides relief to taxpayers and clarifies the scope of the Goods and Services Tax (GST) law, the Nagpur Bench of the Bombay High Court has held that the assignment of leasehold rights in immovable property does not constitute a "supply of services" and is therefore not liable to GST.

Deemed Dividend value under Income Tax taxable for borrower company only if he is shareholder in the lending entity

 The Delhi Income-tax Appellate Tribunal (‘the Tribunal’) recently held that an unsecured loan received by a company cannot be treated as ‘deemed dividend’ in its hands since the recipient company itself is not a shareholder of the lending company, even though there is a common beneficial shareholder.

Commissioner Income Tax (Appeals) cannot adjudicate issues already deleted by Assessing Officer in rectification order under section 154

 In a recent and noteworthy ruling, the Hon’ble Delhi Income Tax Appellate Tribunal has provided important clarity on the scope of appellate jurisdiction where an addition has already been removed by the Assessing Officer through rectification under section 154 of the Income-tax Act, 1961 (‘the Act’). The Tribunal has categorically held that once an addition no longer survives in the assessment by virtue of a rectification order, the Commissioner (Appeals) cannot adjudicate upon that issue, as there remains no subsisting subject matter for appeal.

Business Loss allowable even when major transactions being intra-group : Tax dept. cannot Second-Guess Commercial Decisions

 In a recent ruling, the Bangalore Tribunal held that business losses, including those arising from inter-group transactions, are allowable where the expenditure is incurred wholly and exclusively for business purposes, and cannot be disallowed based on the Revenue’s subjective assessment of business expediency.

ITAT denies deemed valuation of land during return processing stage

 In a recent ruling, the Delhi Bench of the Income Tax Appellate Tribunal (“ITAT”) held that no adjustment under section 50C of the Income-tax Act (dealing with deemed valuation of immovable property) can be made at the stage of initial processing of return. The ITAT categorically ruled that invoking the deeming fiction of section 50C while issuing an intimation under section 143(1) is beyond the limited scope of prima facie adjustments permitted under the Act.

Supreme Court of India rules on tax treaty eligibility and taxation of an indirect transfer of shares of an Indian company by a Mauritius based investment fund

 This Tax Alert discusses the recent landmark Supreme Court (SC) ruling in the case of Tiger Global International Holdings ^[1] (Taxpayer) upholding rejection of advance ruling sought by the Taxpayer seeking treaty exemption for indirect transfer. The rejection was on the ground that the application relates to a transaction or issue designed prima facie for the avoidance of income-tax.

The core fact involved was that the Taxpayer, being a Mauritian company and holding a valid Tax Residency Certificate (TRC), sold shares held in a Singapore company which derived substantial value from shares of an Indian company during the tax year 2018-19. The shares of Singapore Company were acquired prior to 1 April 2017.

The Taxpayer claimed exemption from indirect transfer source rule under Income tax Act, 1961 (ITA) on the basis of Article 13(4) of India-Mauritius Double Tax Avoidance Agreement (I-M treaty or I-M DTAA). Upon denial of nil withholding certificate by the Indian Tax Authority, the Taxpayer sought an advance ruling from the Authority for Advance Ruling (AAR) by relying upon, inter alia, the TRC issued by Mauritian Authority, Circular No. 789 dated 13 April 2000 issued by Central Board of Direct Taxes (CBDT) and earlier SC rulings upholding the significance of TRC for treaty eligibility.

However, after examining the facts regarding business operations of the Taxpayer, the AAR rejected the application at threshold on the ground of prima facie tax avoidance. But on Taxpayer’s writ petition, the Delhi High Court reversed the AAR ruling. The Tax Authority appealed further to the SC.

The SC ruled in Tax Authority’s favor and held that the AAR had correctly rejected the application. The SC examined the legal background of I-M Treaty, various Circulars issued from time to time, ratio of earlier SC rulings and legislative developments post such rulings like introduction of indirect transfer source rule, General Anti-Avoidance Rules (GAAR) including grandfathering provisions and its treaty override effect, statutory requirement to furnish TRC and other documents/information as also amendments in I-M treaty expanding source taxing rights of India. On a thread bare analysis of such developments, the SC held that Circular No. 789 is statutorily superseded and, hence, TRC alone is not sufficient to avail treaty benefits. The Tax Authority is now empowered to investigate the actual residential status of taxpayers by investigating the center of their management and deny treaty benefits to residents of third countries by invoking GAAR or Judicial Anti-Avoidance Rules (JAAR).

In the facts of the present case, the SC held that the Tax Authority had proved that the transaction was prima facie an impermissible tax avoidance arrangement; it was not protected by GAAR grandfathering provision; hence, the Taxpayer was not entitled to treaty benefit and the AAR had rightly rejected the advance ruling at threshold.

M&A – Few Important Concepts Every Deal Maker Must Understand

Mergers and Acquisitions (M&A) are no longer confined to large conglomerates. Mid-market deals, family-owned businesses, PE-backed exits and strategic acquisitions have become common. While valuation and synergies dominate boardroom discussions, many deals fail to deliver expected value due to weak structuring, tax leakages and poor post-deal integration. This article highlights a few important concepts that deserve close attention in any M&A transaction.

Are You Ready for a Tax Investigation? A Strategic Guide for Businesses

A tax investigation is one of the most stressful events a company can face. It disrupts operations, consumes resources, and carries significant financial and reputational risk. While the prospect is daunting, being prepared transforms a potential crisis into a manageable, controlled process. This article provides a strategic roadmap for handling a tax investigation, from the first knock on the door to its final resolution.

Mumbai ITAT | Transfer of 'life interest' in property owned by trust not subject to sale consideration deeming provisions

 A life interest in trust refers to a limited and determinable right to enjoy income or benefits from a property during the lifetime of the holder, without conferring ownership of the underlying property (corpus). Such an interest automatically ceases upon the death of the holder, whereupon the property devolves on the remainder beneficiaries. Importantly, a life interest does not grant absolute or perpetual rights over the property.

Supreme Court rules on taxability of stock-in-trade realized pursuant to amalgamation

 This Tax Alert summarizes a Supreme Court (SC) ruling (two-judge bench) dated 9 January 2026^[1], where the core issue under consideration was whether shares received on amalgamation in lieu of shares held in the amalgamating company as stock-in-trade, is taxable.

The SC held that where shares are held as capital assets, amalgamation results in a transfer, but remains exempt due to specific statutory provisions. Whereas, when the shares constitute stock in trade, taxability arises only if the receipt represents real income i.e., the new shares received have definite and ascertainable value and are immediately realizable. Presence of lock in restrictions, lack of marketability etc., make the assets unrealizable and defer its taxability until actual sale. The SC reaffirmed that business profits may be realized in kind, but such consideration in kind needs to be in the form of realizable instruments capable of valuation in money’s worth.

IBBI Tightens the Net - Introduces new transparency mandates for Insolvency Resolution Plans through specific disclosures

 The Insolvency and Bankruptcy Board of India (IBBI) has introduced new disclosure requirements for resolution applicants under the corporate insolvency resolution process. Through the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2025, notified recently , IBBI has mandated two critical inclusions in every resolution plan to be submitted under the Insolvency and Bankruptcy Code, 2016.

 

Mumbai Tribunal deletes Tax Addition made by Assessing Officer by creating 'notional interest' on loan advanced by Company to Director

 Advancing of interest-free funds by company to director does not warrant computation of notional interest income in the hands of Company.

The assessee, a company, had advanced an interest-free loan to its director. During the course of assessment proceedings, the Assessing Officer observed that the amount so advanced was equivalent to the company’s total subscribed capital along with a portion of its reserves. The Assessing Officer further noted that the company had claimed interest expenditure in its profit and loss account. On this basis, the Assessing Officer computed notional interest income at the rate of 18 percent on the outstanding loan amount and made an addition to the income of the assessee. Aggrieved by the said addition, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), who decided the issue in favour of the assessee on the ground that only real income is liable to tax.

The matter was thereafter carried in appeal before the Tribunal. Before the Tribunal, the assessee contended that notional income cannot be brought to tax, particularly where, in the exercise of commercial discretion, the assessee had advanced an interest-free loan to its director. It was further argued that the Assessing Officer cannot substitute his judgment for that of the businessman. The assessee also submitted that the Assessing Officer had himself acknowledged that the loan was advanced out of interest-free funds and, therefore, no addition was warranted. The Tribunal accepted the submissions of the assessee, upheld the order of the Commissioner of Income-tax (Appeals), and ruled in favour of the assessee.

Advancing loans out of interest-free funds is a matter of commercial prerogative of the assessee, and the revenue cannot substitute its judgment by imputing notional interest on such advances.

Bombay High Court rules GST not leviable on assignment of leasehold rights

 This Tax Alert summarizes a recent ruling of the Bombay High Court (HC)¹ on applicability of Goods and Services Tax (GST) on assignment of leasehold rights in an industrial plot.

The petitioner, who had acquired industrial plot for a 95-year lease period, assigned its leasehold rights to a third party for a consideration, with prior consent of the lessor. Revenue issued a show cause notice demanding GST on the transaction, treating it as a supply of services under Section 7(1) read with Schedule II of the Central Goods and Services Tax Act, 2017 (CGST Act). Aggrieved, the petitioner filed a writ petition before the Nagpur Bench of the HC.

Delhi ITAT Reinforces Foundational PE Principles: Revenue Bears Onus to Prove Physical Presence

 In a ruling that provides crucial clarity on the taxation of foreign enterprises in India, the Delhi bench of the Income Tax Appellate Tribunal (ITAT) has emphatically reiterated that the burden of proving the existence of a Permanent Establishment (PE) rests squarely on the tax authorities. The decision in SAIC Motors (China) underscores that neither employee secondment nor a subsidiary’s premises can automatically create a PE for a foreign parent without satisfying stringent legal tests.

ITAT Bangalore Affirms: Tax Authorities Cannot Override Commercial Judgment in Loss Claim

 In a significant ruling that reinforces the sanctity of business decision-making under India’s tax regime, the Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has decisively held that revenue authorities cannot disallow genuine business losses merely by substituting their own view of commercial prudence. The decision in *Instakart Services Pvt. Ltd. v. ACIT (ITA No. 496, 543 & 544/Bang/2025)* marks a crucial check on the expanding scrutiny of intra-group pricing and startup losses.

ITAT Mumbai Delivers Landmark Win for Shell India in High-Stakes Transfer Pricing Dispute

 In a decision with far-reaching implications for the energy sector and transfer pricing jurisprudence, the Income Tax Appellate Tribunal (ITAT) Mumbai has delivered a resounding victory for Shell India Markets Pvt. Ltd. The ruling in *ITA No. 4828/Mum/2024* (November 2025) not only deletes massive additions but also reinforces critical principles of contract sanctity, appropriate benchmarking, and methodological rigor in transfer pricing.

The "Process Royalty" Debate: An Enduring Tax Controversy in the Digital Age

Introduction: When Does a Service Fee Become Royalty?

In the complex world of international taxation, few disputes are as persistent and financially significant as the debate over what constitutes a "royalty." At the heart of this debate is a seemingly simple question: is a payment made for a technical service—like leasing an international telecom circuit—a business service fee or a royalty for using a secret "process"? This distinction carries enormous weight. A service fee may be taxed differently, often at a lower rate, or not at all under a tax treaty, while a royalty payment typically attracts a higher withholding tax.

Applicability of TDS on Interchange Fees and Payment Gateway Charges

 Tax Deducted at Source (TDS) is generally not applicable to interchange fees, payment gateway charges, or the Merchant Discount Rate (MDR). This position has been expressly clarified by the Central Board of Direct Taxes (CBDT) and consistently upheld by judicial authorities.

The GSTR-3B Reclaim Ledger: A Silent Compliance Trap You Can't Ignore

 A critical but often overlooked system has been tracking your GST credits since August 2023—the Electronic Credit Reversal and Re-claimed Statement (Reclaim Ledger). For many businesses, this ledger is a ticking time bomb, with new GSTN advisories threatening to block your monthly returns if it shows a negative balance.

Delhi ITAT Held that Investments by Holding Companies Qualify as Business Activity

 Recently, the Delhi Tribunal held that where the main object of a company is to invest in companies to act as holding company, "such activity itself constitutes the carrying on of business”. Accordingly, the Tribunal allowed deduction of the related expenses as business expenditure and further held that the resulting business losses are eligible to be set off against income assessed under the head “Income from other sources”.

Supreme Court ruling holds non-compete fee is allowable as revenue expenditure

 The Hon’ble Supreme Court settled the long-standing controversy surrounding the tax treatment of non-compete fees and, based on the facts of the case held that such payments are allowable as revenue expenditure as it was incurred only to protect or enhance profitability of the business, thereby facilitating the carrying on of the business more efficiently and profitably.

Background

ITAT Amendment Rules, 2025 – Key Procedural Changes and Practical Takeaways

 The Income-tax Appellate Tribunal has recently notified the Income-tax (Appellate Tribunal) Amendment Rules, 2025, introducing important procedural reforms to the existing Income-tax (Appellate Tribunal) Rules, 1963. These amendments are aimed at further strengthening the digital framework of appellate proceedings and simplifying compliance for taxpayers and professionals appearing before the ITAT.

Delhi ITAT: Reassessment initiation by Assessing Officer invalid - as same issue was already decided by CIT(Appeals)

 In Noida Special Economic Zone Authority v. DCIT, the Hon’ble Delhi ITAT has laid down an important principle on the limits of reassessment powers. The Tribunal held that where an issue has been examined and relief has been granted by the Commissioner (Appeals), and such order is not challenged by the Revenue before the Tribunal, the matter attains finality. In such circumstances, the Revenue cannot seek to revisit the same issue by invoking reassessment under section 147 of the Act. If the Department is aggrieved by the appellate order, the only remedy provided under the Act is to file an appeal before the Tribunal.

NCLT Rejects Capital Reduction Scheme Failing Test on Surplus Funds and Compliance

 The National Company Law Tribunal (NCLT), Delhi Bench, dismissed the petition seeking confirmation of reduction of share capital, holding that the company failed to demonstrate the availability of excess capital or free reserves when the petition was approved by the company board and did not adequately safeguard the interests of its creditors.

ITAT: Backs TCS in royalty dispute, holds ‘TATA’ brand key to value; Deletes Rs. 1779.23 cr. adjustment

 In a case involving dozen tax issues, Mumbai ITAT almost entirely rules in favour of software giant TCS (Assessee), primarily relying on coordinate bench ruling for earlier years, ITAT adjudicates on various tax issues including brand royalty adjustment, corporate tax deductions etc.; ITAT, on the hotly disputed issue of CIT(A) deleting Rs. 2300 cr. adjustment on account of receipts of brand royalty by Assessee from its

Tax certainty for home buyers: ITAT nixes stamp value escalation

 In a recent ruling, the ITAT Mumbai deleted an addition proposed in the hands of a buyer on account of the difference between the agreed purchase price of a flat and the higher stamp duty value adopted at the time of registration. The Tribunal held that in the facts of the case, no tax demand was warranted since the buyer had satisfied the conditions laid down in the law to substantiate the genuineness of the transaction.

ITAT Delhi: Carry Forward of Business Losses Post-Amalgamation – Emphasis on Beneficial Ownership

 As per the Income Tax Law, where a company’s shareholding changes during a year, losses from earlier years cannot be carried forward to set off against that year’s income, unless at the end of the year, at least 51% of the voting shares continue to be beneficially held by the persons who beneficially held them when the losses were originally incurred.

SEBI Introduces new "Informal Guidance Scheme" – Overview and Key Highlights

 The Capital Market Regulator, the Securities and Exchange Board of India (‘SEBI’), has recently notified the SEBI (Informal Guidance) Scheme, 2025 (‘New Scheme’), replaces the erstwhile SEBI (Informal Guidance) Scheme, 2003 (‘Old Scheme’) with effect from December 1, 2025. The New Scheme seeks to broaden the scope of eligible applicants and streamline the process for obtaining informal guidance, while retaining the core objective of providing regulatory clarity.

Key changes under the New Scheme include the following: