Tax Flash news - Archive 2025

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Ministry of Labour & Employment has released FAQs on Labour Codes

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Ministry of Labour & Employment has released FAQs on Wage Code

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Ministry of Labour & Employment has released FAQs on IR Code

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India Tax Konnect - December 2025

Virgin Atlantic Airways Ltd. v. DCIT, International Taxation (ITA No. 2672/Del/2023 & ITA No. 947/Del/2025)

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Ministry of Labour & Employment has released FAQ on OSH Code

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Foreign head office expenses incurred exclusively for Indian operations are deductible only to the extent of statutory limit

DIT v. American Express Bank Limited (Civil Appeal No. 8291 of 2015 & 4451 of 2016)

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High Court reads down section 16(2)(aa) of Central GST Act to allow Input Tax Credit to bona fide purchasers

WP(C) NO.5725 OF 2022

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Dividend Distribution Tax, effectively being a tax on dividend income of shareholder, cannot exceed tax treaty rate

Tax Appeal No. 5 of 2024

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Employees’ State Insurance Corporation issues circular regarding implementation of Code on Social Security, 2020

https://www.in.kpmg.com/taxflashnews/KPMG-Flash-News-GOI-notifies-implementation-of-Labour-Codes.pdf to access the flash news dated 21 November 2025

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Mumbai Tribunal upheld “at-cost” TP method for Shell India’s provision of technical services in oil & gas domain; validates industry practice, OECD alignment and use of independent expert opinion

Shell India Markets Private Limited v. NFAC/ DCIT (ITA No. 4828/ Mum/ 2024)

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Government of India issues the Industrial Relations Code (Removal of Difficulties) Order, 2025

https://egazette.gov.in/(S(m3vqka0z3blgixtxqojmivfx))/ViewPDF.aspx - to access flash dated 21 November 2025

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No virtual service permanent establishment constituted in India in the absence of specific provisions in tax treaty

CIT, International Tax v. Clifford Chance Pte Ltd (ITA 353/2025)

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CBDT launches second NUDGE initiative for voluntary compliance with respect to Foreign Assets

The press release issued by CBDT - https://incometaxindia.gov.in/Lists/Press%20Releases/Attachments/1234/PressRelease-CBDT-launches-2nd-NUDGE-initiative-to-strengthen-voluntary-compliance-in-respect-of-Foreign-Assets.pdf

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India Tax Konnect - November 2025

ITA No. 585/DEL/2021 pertaining to financial year 2002-03.

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OECD releases guidance on permanent establishment in case of cross-border remote working

The 2025 Update to the OECD Model Tax Convention (EN)-https://www.oecd.org/content/dam/oecd/en/publications/reports/2025/11/the-2025-update-to-the-oecd-model-tax-convention_c7031e1b/5798080f-en.pdf

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High Court confirms deletion of transfer pricing adjustment absent any perversity - no substantial question of law involved

PCIT v. Grupo Antolin India Pvt Ltd (ITA No. 98 of 2024)

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Government of India announces implementation of four labour codes

Link to the press release issued by the Government of India – Press Release: Press Information Bureau(https://www.pib.gov.in/PressReleseDetailm.aspx?PRID=2192463#:~:text=In%20a%20historic%20decision%2C%20the,effect%20from%2021st%20November%202025%2C)

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Government of India notifies Standard Operating Procedure for computing incentives under Pradhan Mantri Viksit Bharat Rozgar Yojana

https://www.in.kpmg.com/taxflashnews/KPMG-Flash-News-Government-approves-Employment-linked-incentive-schemes-1.pdf to access the flash news dated 3 July 2025

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Mumbai Tribunal affirms limited-risk distributor status for Netflix and rejects entrepreneurial re-characterisation

ITA No.6857/Mum/2024

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Maharashtra rolls out Global Capability Centre Policy, 2025 to drive investment and high-skilled job creation

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Delhi High Court upholds constitutional validity of PF contribution for International Workers

SpiceJet Ltd. v. Union of India & Ors. (WP 2941 of 2012)

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Transfer of portfolios of PMS business by Portfolio Managers

SEBI/HO/IMD/RAC/CIR/P/2025/0000000138

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Government notifies revised India-Qatar tax treaty; Scope of Permanent Establishment expanded, and Principal Purpose Test introduced

Notification No.154/2025/F. No. 504/6/2004-SO-FTD-II(2)] dated 24 October 2025

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India Tax Konnect - October 2025

eBay Singapore Services Private Limited v. DCIT (ITA No. 2378/MUM/2022)

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NITI Aayog recommends decriminalisation and rationalisation of criminal offences under Income-tax law to foster trust-based governance

https://niti.gov.in/sites/default/files/2025-10/Report_Tax_Policy_Working_Paper_Series_II.pdf - accessed on 10 October 2025

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Government of India launches Employees' Enrolment Campaign, 2025 under the EPF Act

Notification G.S.R. 749(E) issued by Ministry of Labour and Employment and published by Gazette of India

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India Tax Konnect - September 2025

Vijay Krishnaswami v. DDT (musicglobo) (SLP(CRL) Nos. 3618-3620 of 2024)

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EPFO launches new Electronic Challan-cum-Return system for EPF remittance

FEPFO Circular - https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2025-2026/ECRRevamp_26092025.pdf dated 26 September 2025, Accessed on 28 September 2025

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No permanent establishment on account of leased aircraft at exclusive disposal of the lessee

Sunflower Aircraft Leasing Limited v. ACIT (ITA No. 1107/Mum/2025)

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India Tax Konnect - August 2025

3 Sigma Global Fund v. ACIT (ITA No. 1130/ Mum/ 2025)

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Principal Purpose Test cannot be invoked sans specific notification for incorporating MLI provisions into the tax treaty

TFDAC Ireland II Limited v. DCIT (International Tax) (ITA No. 1198/Mum/2025)

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Interest on loan granted in accordance with the ECB guidelines is eligible for exemption under the India-Mauritius tax treaty

Shree Cement Limited v. DCIT, International Tax (D.B. Civil Writ Petition No. 22244/ 2018)

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Lok Sabha passes Bill to amend the Income-tax Act, 1961

Bill No. 105 of 2025

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EPFO issues circular for UAN Generation via UMANG App

Circular issued by EPFO Source - https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2025-2026/MandatoryAllotment_ActivationOfUANThroughUMANGAPPUsingFAT.pdf dated 30 July 2025 - Accessed on 5 August 2025

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Delayed compliance without concealment does not attract penalty for under-reporting

Ishit Kamleshbhai Sheth v. ITO (ITA No. 753/ Ahd/ 2025)

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India Tax Konnect - July 2025

Bajaj Auto Limited v. DCIT (ITA No. 505 of 2023)

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India-UK CETA: A win-win deal for trade in goods

European Free Trade Association

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EPFO issues circular on Employment-linked Incentive Scheme

Circular issued by EPFO Source - https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y2025-2026/Circular_GrossWages_22072025.pdf dated 22 July 2025

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The Income-tax Bill, 2025: Key amendments proposed by the Select Committee in its report tabled in the Parliament

Bill No. 24 of 2025

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Anti-fragmentation rule in the definition of permanent establishment not applicable in the absence of any business activity carried on by foreign enterprise in India

RGA International ReInsurance Company Designated Activity Company v. DCIT (ITA No. 1092/Mum/ 2025)

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Apprenticeship period eligible for gratuity in the absence of appropriate documentation

Steel Authority Of India Limited v. Sri Shiba Pada Banerjee And Ors (FMA 1190 of 2024)

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Mauritius company not a tax resident of India given its control and management not situated ‘wholly’ in India - Capital gains on share transfer not taxable

Essar Communications Limited v. ACIT (ITA No. 340/ DEL/ 2022); Essar Com Limited v. ACIT (ITA No. 339/ DEL/ 2022)

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Government approves Employment-linked incentive schemes

Press release issued by the Ministry of Labour and Employment Source- https://www.pib.gov.in/PressReleasePage.aspx?PRID=2141129 - dated 1 July 2025 Accessed on 2 July 2025

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India Tax Konnect - June 2025

ITA No.2168/Del/2023

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Compensation received for diminution in value of stock options is a capital receipt, not taxable

Manjeet Singh Chawla v. DCIT of TDS (Writ Petition No. 20212 of 2023 (T-IT))

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Provision of marketing support services does not create permanent establishment unless the prescribed conditions are fulfilled

Zscaler Inc. v. DCIT (ITA No. 3376/DEL/2023; ITA No. 928/DEL/2025)

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Conversion of company into LLP is a taxable transfer unless prescribed conditions are satisfied

ISC Specialty Chemicals LLPv. ITO (ITA No. 457/MUM/2025)

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Tribunal allowed set-off of PE loss against ECB interest taxable on gross basis

Abu Dhabi Commercial Bank PJSC v. DCIT (International Taxation) (ITA No. 3404/MUM/2023)

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Capital gains article under tax treaty allocates taxation right and is not subject to limitation of relief clause

Prashant Kothari v. Income Tax Ward (ITA No. 5391/MUM/2024)

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Refund of unutilized input tax credit on closure of business allowed

SICPA India Private Limited and Another [WP (C) No. 54 of 2023]

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Option money received for grant of right of first refusal to other shareholder, being advance against sale of shares, is a capital receipt

ACIT v. Dabur Invest Corp. (ITA No. 2453/Del/2022 & ITA No. 2454/Del/2022); Dabur Invest Corp. v. JCIT (ITA No. 2447/Del/2022)

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Government of India declares 8.25 per cent interest rate on Employees’ Provident Funds Scheme for Financial Year 2024-25

EPFO Circular Source -https://www.epfindia.gov.in/site_docs/PDFs/Circulars/Y20252026/DeclarationOfROI_2024_25.pdf Accessed on 3 June 2025

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India Tax Konnect - May 2025

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Due date for filing Income Tax Return extended from 31 July to 15 September

CBDT Circular No. 6 dated 27 May 2025 and Press Release dated 27 May 2025

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Proposed Excise Tax on Foreign Remittances from the U.S.

Klaus Vogel on Double Taxation Conventions, 5th edition, Pg. 1959

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Capital gains exemption under the India-Cyprus treaty granted in the absence of substantive evidence to rebut it

Gagil FDI Ltd. v. ACIT (ITA No. 2661/Del/2024)

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India and UK Sign Free Trade Agreement and Double Contribution Convention, easing dual social security contributions

Government of India

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High Court ruling on the cost of asset received by a shareholder upon liquidation

T.R. Balasubramanium v. ACIT(TCA No. 438 of 2008)

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Damages received for surrendering a ‘mere right to sue’ is not taxable as capital gains

DCIT v. Ramesh Ravji Chheda (ITA No. 968/Mum/2025); DCIT v. Rasik Kunverji Chheda (ITA No. 1000/Mum/2025); DCIT v. Mahendra Ravji Chheda (ITA No. 1001/Mum/2025);

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India Tax Konnect - April 2025

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PE loss permissible to be set-off against fees for technical services taxable on gross basis

Hyosung Corporation v. ACIT (ITA No. 2943/Del/2013)

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CBDT notified the list of laws for disallowance of settlement payments

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Ten goods notified to be liable to tax collection at source

Notification no. 36/2025 dated 22 April 2025

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Mutual fund units not equivalent to company shares for capital gains taxation under tax treaty

Anushka Sanjay Shah v. ITO (ITA No. 174/Mum/2025)

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Surcharge on private discretionary trusts follows slab-based rates, not the highest rate

Araadhya Jain Trust v. ITO (ITA No. 4272/Mum/2024)

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Acquisition of shares at below FMV not taxable as Other Income when held as stock-in-trade

Utility Supply Private Ltd v. DCIT (ITA No. 3585/M/2024)

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Capital gains taxable on transfer of undervalued leasehold rights in land based on stamp duty value

Vidarbha Veneera Industries Ltd (In Liquidation) v. ITO (ITA No. 34 of 2022)

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The Reserve Bank of India releases revised draft Export & Import regulations and directions under FEMA, 1999 for public comments

RBI Press Release dated 2 July 2024

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US Reciprocal Tariff – To deliver balance of trade

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India Tax Konnect - March 2025

ESM Group Inc. v. DCIT (ITA No. 9365/Del/2019)

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Revision to the direct tax amendments proposed by the Union Budget 2025

KPMG Flash News on India Union Budget 2025-26

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Rights entitlements are not akin to shares

Vanguard Emerging Markets Stock Index Fund A Series of VISPLC v. ACIT (ITA No. 4657/Mum/2023)

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CBDT Circular on application of PPT vis-à-vis grandfathering provisions in treaty does not affect other anti-abuse provisions

CBDT Circular no. 1 dated 21 January 2025

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High Court upheld the CBDT order rejecting relaxation of conditions to carry forward losses

W.P.(C) 399/2022

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Charges for bareboat chartering is not taxable as royalty under the India-Belgium tax treaty

Baggerwerken Decloedt En Zoon v. DCIT (IT(TP) No. 69/Chny/2019)

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Limitation period prescribed by a CBDT circular is unsustainable when none existed in the Act

Central Board of Direct Taxes

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India Tax Konnect - February 2025

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Indian subsidiary installing the equipment supplied by the parent under separate contract does not constitute permanent establishment

CIT v. Nokia Network OY (ITA No. 785/2019)

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The Division Bench of Karnataka High Court dismisses revenue appeal on non-taxability of the salary reimbursement for the seconded employees

WA No. 992 of 2023

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The Income-tax Bill, 2025, tabled in the Parliament

While the 1961 Act has sections numbered till 298, it contains a lot of alpha-numerical provisions, for instance Section 115A 115WM. Hence, the total individual section count is more than 800 in order to do a like-to-like comparison with the Bill

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Special Bench ruled on limitations on deductibility of head office expenses under the Act vis-à-vis the treaty

Mashreq Bank PSC v. DCIT (ITA No.1342/Mum/2006)

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India Union Budget 2025-26

Economic survey 2024-25, Ministry of Finance, Accessed on 31 January 2025

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India Tax Konnect - January 2025

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Grandfathered (exempt) capital gains need not be set off against non-grandfathered losses

After setting off a part of losses with the current year's taxable gains

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Grandfathering provision under the tax treaty is outside the purview of the Principal Purpose Test: CBDT circular

CBDT Circular no. 1 dated 21 January 2025

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SNRR account can be opened with authorised dealers in India or its branches outside India

Notification No. FEMA 5(R)(5)/2025-RB. issued by RESERVE BANK OF INDIA (Foreign Exchange Department) on 14 January 2025

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Exporters permitted to open and hold a Foreign Currency Account with a bank outside India

Notification No. FEMA 10(R)(5)/2025-RB) issued by RESERVE BANK OF INDIA (Foreign Exchange Depar on 14 January 2025

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Capital reduction results in transfer of a capital asset

PCIT v. Jupiter Capital Pvt Ltd (SLP No. 63 of 2025)