Interest on Foreign Currency Loan & Corresponding Forex Loss for Strategic Share Acquisition Held Deductible as Revenue Expenditure

 The tax treatment of interest on funds borrowed to acquire shares hinges on a single, crucial distinction: the purpose behind the acquisition.

Landmark ITAT Delhi Ruling: Share Buy-Backs Qualify as "Corporate Reorganization" under India-Netherlands DTAA

 In a significant victory for multinational enterprises and foreign portfolio investors, the Delhi bench of the Income Tax Appellate Tribunal (ITAT), via a Third Member ruling, has held that a share buy-back by an Indian subsidiary from its Netherlands-based parent constitutes a “corporate reorganization” under the India-Netherlands Double Taxation Avoidance Agreement (DTAA). The decision, pronounced on March 25, 2026, in the case of Huntsman Investment [Netherlands] BV vs. ADIT (Assessment Year 2009-10), sets a powerful precedent on treaty interpretation.

CBDT amends Income Tax Rules to clarify GAAR grandfathering provisions

 On 31 March 2026, the Central Board of Direct Taxes (CBDT) issued two Notifications^[1] amending General Anti Avoidance Rules (GAAR) providing grandfathering benefit for income derived from transfer of investments which were made prior to 1 April 2017. The first Notification amends Rule 10U under Income Tax Rules (ITR), 1962 applicable to the erstwhile Income Tax Act (ITA), 1961, whereas the second Notification amends comparable Rule 128 under ITR 2026 applicable to the new ITA 2025 effective from 1 April 2026.

The Notifications state that GAAR provisions shall not apply with respect to any income derived from transfer of investments which were made before 1 April 2017 even though the arrangement, irrespective of the date on which it had been entered into, is not grandfathered.

The amendments to ITR 1962 are effective from 31 March 2026, while those relating to ITR 2026 apply from 1 April 2026.

CBIC notifies concessional rate of customs duty on goods manufactured by SEZ unit and cleared into DTA

 This Tax Alert summarizes a Notification¹ issued by Central Board of Indirect Taxes and Customs (CBIC) notifying concessional rates of basic customs duty (BCD) and Agriculture Infrastructure and Development Cess (AIDC) on specified goods manufactured by a unit in Special Economic Zone (SEZ) and cleared into Domestic Tariff Area (DTA).