The Income Tax Department has drawn up an aggressive litigation management strategy for 2026-27 with a view to speeding up disposal of tax appeals. The new drive will focus on high-value disputes, and cutting long-pending legacy cases despite substantial vacancies in appellate authorities.

It has disposed of over 2.24 lakh appeals in FY26, substantially higher than the 1.79 lakh fresh appeals instituted during the year, bringing down pending appeals to 4.95 lakh from 5.4 lakh a year earlier, according to the Central Action Plan (CAP) 2026-27.

The Income Tax (I-T) Department has released Excel utility versions of Income Tax Return (ITR) forms 1 and 4 for the Assessment Year 2026-27 (FY 2025-26) while also starting online filing for the same forms These tools are now available for download on the official income tax e-filing portal, allowing eligible taxpayers to start preparing for the filing of income tax returns.

The new Income Tax Act rolled out last month aims to reduce litigation, simplify compliance and build a transparent, technology-driven ecosystem for taxpayers, a senior official said here on Tuesday.

Vivek Wadekar, the Principal Chief Commissioner of Income Tax (Pr-CCIT), Pune, speaking about the transition from the six-decade-old Income Tax Act of 1961, said the earlier legislation had become "bulky" after more than 4,000 amendments, often leading to disputes due to varying interpretations of provisions.

India has revamped its framework for exchanging tax information with foreign authorities, sharply tightening timelines and monitoring mechanisms to curb cross-border tax evasion and speedy closure of cases involving foreign tax jurisdictions.

The new framework, effective July 1, mandates all requests from foreign tax jurisdictions to be treated as "high priority" and lays out that information be shared within 15 days from the date of request, if information is available with the income tax department.

If full information cannot be provided on time, officers must submit an interim report within 15 days, detailing progress, constraints, and with an expected timeline for completion.

The Supreme Court on Monday again rejected the income tax department's review petitions against its March 2021 ruling that payments made to non-residents for software purchases cannot be taxed as royalty.

The tax department had argued that cross-border payments made to foreign software companies and distributors amounted to royalty because the software sold to end users involved licensing of the underlying programme. It maintained that Indian buyers were granted rights to exploit software copyright and that the payments therefore constituted royalty income for overseas sellers. A three-judge bench comprising justices Sanjay Kumar, KV Viswanathan and K Vinod Chandran noted that the court had already dismissed review petitions filed by the tax department against the same judgment in April 2024.

With fiscal pressures mounting due to rising committed expenditure and a slowdown in revenue growth, the government has stepped up the tax recovery drive. According to official sources, the Income Tax Department has directed field officers to intensify the recovery of confirmed and undisputed tax demands, strengthen monitoring of large non-compliant taxpayers and improve demand management.

Under the project termed the Central Action Plan for 2026-27, the department has specifically asked officers to prioritise recovering Rs 2.57 lakh crore in demands upheld by the Commissioner of Income Tax (Appeals) in FY26. Special teams are being set up to pursue top arrear cases and analyse tax trends sectorally. The tax officers also have to ensure prompt refunds and better taxpayer outreach to improve compliance and minimise revenue leakages.

India's personal tax compliance framework is undergoing a decisive transformation, driven by digitisation, pre-filled data integration, and the introduction of simplified tax regimes by the Indian Income tax department.
The Income tax return (ITR) forms for FY 2025-26 (AY 2026-27) underscore this evolution, signalling a shift from basic disclosures to more rigorous requirements for accurate, consistent, and comprehensive reporting by taxpayers, which helps authorities navigate fast processing of tax return as cross verification of claims between individual ITR vis-à-vis reporting from businesses become easier.
With another tax return filing season round the corner, it is pertinent for taxpayers to plan. The first question that arises is which ITR form to choose from the various forms notified by the tax department. The selection of the appropriate ITR form depends on an individual's specific circumstances, including residential status, nature of income, taxable income thresholds, etc.

The Central Board of Direct Taxes (CBDT) has said a major compliance change is mandatory disclosure of bank balances under the revised income tax return forms for taxpayers filing ITR-4 for Assessment Year (AY) 2026-27. The government has been gradually increasing the disclosure requirements in ITR forms to bring in more transparency and to have a more data-driven tax administration. CBDT has issued Notification No. 45/2026/F. No. 370142/5/2026-TPL dated March 30, 2026 to provide additional reporting of bank balance in ITR-4 AY 2026–2027.

Earlier, the bank account details such as account number, IFSC code and bank name were to be disclosed by taxpayers filing ITR-4, but the disclosure of actual bank balances was optional. However, the latest ITR-4 changes are likely to affect small business owners, professionals, freelancers, consultants, transport operators and salaried individuals earning side income under the presumptive taxation regime covered under Sections 44AD, 44ADA and 44AE of the Income-tax Act.

A mismatch between the annual information statement (AIS) and income tax return (ITR) can trigger automated alerts, as the income tax department has enhanced its data analytics and risk assessment systems. Taxpayers must verify all information and correct any discrepancy in AIS before filing their ITR.

The AIS reflects financial data available with the tax department, based on information received from third-party sources like banks, employers, mutual funds, and property registrars. While the AIS is a helpful tool for pre-filing verification, it may have errors due to incomplete reporting by third parties.

The AIS data for the full financial year is typically updated only by May, after all transactions for March, reported in April are processed.

The Income-tax Act, 2025 (ITA 2025) has been notified and made applicable with effect from 1 April 2026, along with the Income-tax Rules, 2026, thereby introducing the new direct tax framework governing compliances arising on or after the said date.

The deadline for filing Income Tax Returns (ITR) for FY 2025–2026 is July 31, 2026, although the important income tax deadlines for salaried employees in May 2026 focused on TDS compliance for April. May 7 for the deposit of April TDS/TCS and May 31 for the release of quarterly TCS certificates make up important dates in May 2026.

Deadlines for TDS /TCS deposits, TDS certificates and Form 24G , Advance Tax payments are fast approaching in the month of May and whether you’re a salaried individual, a business owner, or a finance professional, missing these dates can attract interest, penalties, and compliance complications.

Transfer pricing is back as an agenda item for multinationals as global capability centres (GCCs), technology captives and IT/ITeS arms re-examine long-settled transfer-pricing strategies built around advance pricing agreements (APAs), with the new safe harbour regime set to redraw the contours of tax planning.

At the heart of the issue are three distinct choices facing GCCs and tech captives: whether to remain locked into existing APA margins, how to deal with APA applications that are still under negotiation, and whether to opt for APAs in the future or shift to the safe harbour regime.

Net direct tax collections rose 5.12% to around Rs 23.40 lakh crore as of March 31, according to official data.

Gross direct tax collections for the financial year increased 4% year-on-year to Rs 28.1 lakh crore, indicating a steady expansion of the tax base. Net collections were supported by a slight dip in refunds, which fell about 1% from a year ago, helping offset the relatively moderate growth in gross receipts. Lower refund payouts typically lift net revenues even when overall inflows rise at a slower pace.

The Income Tax Department has introduced a new form for salaried employees in the country. As an employee, you may be required to file Form 122 with your new employer if you have changed jobs during the year.

Typically, most organizations ask for a declaration from the employee regarding any other income for the year that may impact the tax deducted at source. When an employee switches jobs during the year, the new employer does not know the income received from the prior employer or the tax deducted at source in the previous organization.

Employees changing jobs from 2026-27 onwards will be required to submit income and tax details from previous jobs in a consolidated form to the current employer using Form 122.

If you are looking to send money overseas from India, you should be aware that the government of India has introduced several important changes to the reporting of foreign remittances. Sending money overseas from the country now involves a revised tax compliance process.

The Income Tax Department has replaced the earlier Forms 15CA and 15CB with Forms 145 and 146, the new forms for reporting foreign remittances.

You are required to complete these forms before making certain payments to non-residents, foreign companies or NRIs. Banking institutions, associated parties, and authorised dealers may ask you to submit these documents before processing international transfers.

Delhi High Court has held that a husband’s income tax returns constitute “personal information” and are exempt from disclosure under the Right to Information Act, 2005 unless a larger public interest justifies such disclosure.

Justice Purushaindra Kumar Kaurav set aside an order of the Central Information Commission (CIC) directing that the details be shared with the wife in a matrimonial dispute.

“In the instant petition, there can be no doubt that the information sought by Respondent No. 2 (wife) is ‘personal information’ of the petitioner,” the court observed, adding that disclosure in such circumstances would amount to an unwarranted invasion of privacy.

The case arose from a challenge by the husband to a CIC direction asking the Income Tax Department to furnish his net taxable income details from the financial year 2007–08 onwards. The request had been made by his wife in connection with a pending maintenance claim arising out of matrimonial proceedings.

When Mr Mehta from Shivaji Park, Mumbai, Maharashtra filed his income tax return (ITR), showing an income of Rs 6.3 lakh after paying off his credit card bill of Rs 27.65 lakh, which included a cash payment of Rs 13.95 lakh, the Income Tax Department issued him a notice for unexplained cash.

To explain this cash, Mehta filed a court affidavit saying that his family members out of their love and affection towards him, gave him Rs 15.5 lakh cash, of which he used Rs 13.95 lakh to pay the credit card bill:
Wife: Rs 3 lakh
Father: Rs 8 lakh
Mother: Rs 4.5 lakh

The Income Tax officer however, was not satisfied with this explanation and asked Mehta to give verifiable evidence to substantiate his claim and also told him that an affidavit is not a conclusive proof of source of funds as the onus is on him to prove that his parents actually earned this much money.

The Central Board of Direct Taxes has introduced several changes in the Income Tax Return (ITR) forms for assessment year 2026-27, aimed at improving compliance and ease of filing. The forms now have additional disclosure requirements for F&O trading, political donations and presumptive taxpayers will have to disclose their investments.

One of the main changes in the newly introduced ITR forms is the eligibility criteria for ITR-1.

Almost three months after the Supreme Court's unsettling verdict on American investment firm Tiger Global, a recently released Mauritius government cabinet note claims that Prime Minister Narendra Modi has given his Mauritius counterpart assurance that India would continue with its stand of not taking any action that would undermine the benefits that Mauritius currently enjoys under the Double Taxation Avoidance Agreement (DTAA).

The DTAA between the two countries, even after certain amendments over the past decade, gives investors from Mauritius significant tax benefits--some of which were questioned and struck down by the apex court.

Several offshore companies and non-resident Indians (NRIs) have been asked to explain their investments in unlisted shares by the tax office. They have to disclose the source of money and share valuation reports to justify the prices paid to acquire the stocks.

The Income Tax (I-T) department, said industry circles, is dipping into the repository of data after all private firms were told to dematerialise shares by June 2025.
While stocks bought at less than the fair price would attract provisions under the direct tax laws and the Foreign Exchange Management Act, a steep premium could raise concerns related to money-laundering and fund round-tripping.

In a significant relief for taxpayers struggling with the digital tax system, the Jaipur bench of the Income Tax Appellate Tribunal (ITAT) has given a second chance to a Jaipur-based individual who delayed filing his appeal by over 600 days, citing lack of knowledge of online procedures.

In the case of Kishan Lal Meena vs ITO, the tribunal condoned a delay of 631 days and restored the matter to the Assessing Officer (AO), stressing that a taxpayer’s right to be heard should not be denied due to technical or procedural limitations.

What was the case about?
The matter relates to Assessment Year 2009–10, where the Income Tax Department reopened the case after detecting credit card expenses of Rs 15.75 lakh through financial transaction data.