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onlinetaxupdate team wish to express sincere thanks to all the readers, authors, subscribers for the support extended to us.
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Dear Reader,
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Please find newsletter for your reading and reference.
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Newsletter no.102 dated 16.10.2023
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Index of the Newsletter
- Recent updates
- Article
- Lawgics by Ms. Nidhi Aggarwal
- GST notes by CMA Anil Sharma
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Recap of Latest updates posted on 01.07.2026
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From AY 2026-27, the option to report 'Other Exempt Income' was removed. Now it is being restored.
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To commemorate nine years of the Goods and Services Tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) organized a special celebration ..
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Gross and Net GST revenue collections for the month of June, 2026
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It is informed that the Aggregate Annual Turnover (AATO) functionality is currently being upgraded to enable automatic updation of AATO
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Goods & Services Tax Appellate Tribunal (GSTAT) issued clarification on the Form of dresses or robes to be worn by members.
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In a dramatic twist, the Central Bureau of Investigation (CBI) on Tuesday arrested senior IAS officer Pardeep Kumar on the very day he retired, tightening its grip on the massive Rs 593-crore Haryana government funds scam.
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When the Goods and Services Tax (GST) was implemented on July 1, 2017, one of its central promises was to eliminate tax cascading and allow seamless flow of input tax credit (ITC) across the value chain.
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Now that the income tax return filing time is here you can start the process by first preparing your tax return information and data.
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Now that the income tax return filing time is here you can start the process by first preparing your tax return information and data. To submit your income tax return (ITR), you will need to use the e-filing ITR portal or the income tax utility. If you are trading in securities and futures and options (F&O) in the stock market, it's important to pay attention to the tax audit requirements.
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This article explains when stock market traders should conduct a tax audit and then file their ITR.
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Stock market trading income classification
Taxmann research says that typically intraday trading in the stock market, along with future and option trading, is considered income from speculative business unless you are a registered business that solely engages in stock market trading. If you are a registered business focused only on stock market trading, you will report this income as business income.
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This article is about those individuals who do not own any registered business, but are simply trading in the stock market, such as students and salaried Employees.
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According to Taxmann Research, any gains or losses from intra-day trading, classified as speculative transactions, are always subject to taxation under the income category: 'Profits and Gains from Business or Profession'.
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'Speculative transaction' means a transaction in which a contract for purchase or sale of any commodity including stock and shares is periodically or ultimately settled otherwise than through actual delivery or transfer of the commodity or scrips.
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The Income-tax Act classifies the business income into 'speculative' and 'non-speculative' categories. There are no separate provisions for computation and taxability of income from speculative business except for the provisions relating to set-off and carry forward of losses.
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Taxmann Research says the income from speculative business is computed in the same way as normal business and taxed at rates applicable to the individual taxpayer.
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However, any loss arising from speculative business is not allowed to be set off from any other income including income from non-speculative business. In other words, loss from speculative transactions can be set-off only against income from speculative transactions.
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Applicability of tax audit for stock market traders
According to Taxmann Research, for checking the applicability of tax audit in such cases, the turnover from intra-day trading first has to be computed.
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The computation of turnover is a very important factor as the applicability of tax audit is determined on the basis of turnover. In cases where total sales, turnover or gross receipt from the business during the previous year exceed Rs 1 crore, a tax audit is required.
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However, the raised threshold limit of Rs 10 crore shall be applicable if cash receipts and cash payments during the year do not exceed 5% of the total receipt or payment, as the case may be.
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In other words, if more than 95% of business transactions are done through banking channels, then tax audit is required only when the turnover exceeds Rs 10 crore.
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Taxmann Research points out that as intra-day trading in shares is done through banking channels, the tax audit in such cases shall generally be required only when the turnover exceeds Rs 10 crore.
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Computation of turnover
According to Taxmann Research, the Income-tax Act does not contain any provision or guidance for computation of turnover in the case of intra-day trading. However, the Guidance Note on Tax Audit issued by the ICAI prescribes the method of determining turnover in case of speculative transactions.
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A speculative transaction refers to a transaction in which a contract for purchase or sale of any commodity or securities, is periodically or ultimately settled otherwise than by actual delivery or transfer of commodity or scrips.
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Thus, in speculative transactions, there can be both positive and negative differences arising from the settlement of contracts. Each transaction resulting in a positive or negative difference is an independent transaction. In such transactions, though contract notes are issued for the full value of the purchased or sold asset, the entries in the books of account only contain the differences.
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Accordingly, the aggregate of both positive and negative differences is to be considered as the turnover.
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For example, Mr. X does the following intra-day trading of shares during the year:
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Computation of turnover from intra-day trading of shares (speculative transactions).
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In speculative transactions, the aggregate of both positive and negative differences (income and loss) is considered as the turnover. Thus, the turnover of Mr X shall be computed as follows:
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Securities Amount of gain or (loss)
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Set-off and Carry Forward of Losses
According to Taxmann Research, the losses from intra-day trading cannot be set off against income taxable under any other head, i.e., salaries, house property, capital gains and other sources.
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The losses from speculative business (i.e., loss from intra-day trading) can be set-off only against speculative profits (i.e., profit from intra-day trading). These losses cannot be set off against normal business profits, though both of them fall under the same heads of income: 'profits and gains of business or profession'. However, losses from a normal business can be adjusted against the profits of a speculative business.
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The unabsorbed loss can be carried forward for up to four Assessment Years. It can be set off only against the speculative business income in the subsequent years. It is important to note that you can carry forward the business loss, provided the ITR is filed on or before the due date.
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If such ITR is not filed within the prescribed due date, the right to carry forward and set-off is lost.
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Source: The Economic Times
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When the Goods and Services Tax (GST) was implemented on July 1, 2017, one of its central promises was to eliminate tax cascading and allow seamless flow of input tax credit (ITC) across the value chain.
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Nearly a decade later, GST has largely succeeded in replacing multiple indirect taxes with a unified system. But one part of the reform continues to generate friction for businesses: input tax credit.
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Today, ITC has become one of the biggest sources of litigation, working-capital blockage and compliance anxiety under GST. What was designed as a pass-through mechanism has evolved into a compliance-driven process where access to credit depends not only on a company’s own actions, but also on supplier behaviour, invoice matching and portal-based validations.
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From seamless credit to conditional credit
Experts say GST succeeded in reducing embedded taxation but the architecture of claiming credit has changed significantly.
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Swaroop Repaka, head of product at ClearTax, told Business Standard that the original design worked on a different principle. “The original promise of input tax credit (ITC) was simple and powerful: kill the cascading of tax and let credit flow seamlessly across the chain. On the first count, GST has genuinely delivered; the embedded-tax problem of the old VAT + service tax + excise era is largely gone.”
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However, he said, the ITC mechanism has quietly changed character. "We've moved from a self-assessed, trust-based model to a verification-based, supplier-dependent one," he said.
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Over time, requirements such as invoice matching, GSTR-2B reconciliation, restrictions under Rule 36(4), Section 16(2)(aa), and now the Invoice Management System (IMS) have made credit eligibility more tightly linked to compliance data.
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Nitin Vijaivergia, partner at Price Waterhouse & Co LLP, told Business Standard, “GST was envisioned as a seamless credit-based tax, eliminating cascading and taxing only value addition. While it has largely delivered on these objectives, the architecture of input tax credit has evolved from a seamless tax mechanism into a conditional entitlement.”
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“Today, input tax credit is available not merely because tax has been paid, but only when every link in the compliance chain performs flawlessly," he said.
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Why input tax credit has become a business risk
For businesses, delayed or denied credit directly affects cash flows. Under the current system, companies may have purchased goods, paid suppliers and fulfilled their obligations, but still face delays if supplier filings do not reflect correctly.
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Maulik Manakiwala, partner - indirect tax, tax & regulatory advisory at BDO India, said: “One of the key challenges is the dependence on GSTR-2B for availing ITC. In cases where suppliers fail to furnish their GSTR-1 within the prescribed time, the corresponding ITC does not reflect in the recipient's GSTR-2B.”
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This creates “blockage of working capital and delays in credit utilisation”, he told Business Standard.
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Experts say the debate has gradually shifted from availability of credit to certainty of credit -- a distinction that increasingly influences business decisions and investment planning. Ashish Kumar, head of compliance at supply chain finance platform Vayana, told Business Standard, “Bigger companies have folded this straight into their vendor scorecards. And it's pretty common now for buyers to hold back the GST portion of a payment until the credit actually shows up in their GSTR-2B -- basically tying payment to compliance.”
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Working-capital pressure and rising disputes
Businesses say supplier defaults are now among the biggest reasons for credit loss or delay.
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Manakiwala said, “Companies today often lose, delay, or reverse input tax credit (ITC) mainly due to supplier not filing GST returns or paying tax; invoice mismatch or non-reflection in GSTR 2B; missing time limits or delayed claims; and inverted duty structure (higher tax on inputs than outputs).”
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Sectors with long supply chains or refund dependence are particularly exposed.
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Vijaivergia said that supplier-side compliance defaults frequently disrupt the flow of input tax credit. He further said inverted duty structures continue creating working-capital stress in sectors such as FMCG, textiles, footwear, fertilisers and renewable energy.
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Ranjeet Mahtani, partner at tax and regulatory advisory firm Dhruva Advisors, told Business Standard that construction remains particularly vulnerable because project revenues arrive over longer cycles while input costs arise upfront.
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What businesses want from GST’s next phase
Tax experts argue that the next stage of GST reform may not be about introducing new rules but reducing procedural friction.
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Businesses want greater certainty that genuine credit will not be denied because of supplier defaults outside their control. Simpler reconciliation processes, clearer buyer protections, faster refunds and easier correction mechanisms remain among the key demands.
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Repaka said the system has been optimised for revenue protection and the next phase should focus on restoring ease of doing business.
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Source: Business Standard
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In a dramatic twist, the Central Bureau of Investigation (CBI) on Tuesday arrested senior IAS officer Pardeep Kumar on the very day he retired, tightening its grip on the massive Rs 593-crore Haryana government funds scam.
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Kumar, the former Member Secretary of the Haryana State Pollution Control Board (HSPCB), is the third IAS officer to be arrested in the case, according to a report of the Times of India. Investigators claim they have uncovered a direct link between him and the alleged siphoning of Rs 169 crore from HSPCB accounts maintained at IDFC First Bank's Sector 32 branch in Chandigarh.
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The Rs 169-crore loss is being described by the CBI as the biggest financial hit suffered by any department caught in the wider scam.
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According to the agency, Kumar had been evading investigators for nearly a week and had also sought anticipatory bail from a CBI court. Officials alleged that despite multiple notices, he failed to join the probe. He was eventually tracked down and taken into custody after CBI teams located him.
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The agency has already arrested two other IAS officers — Ram Kumar Singh and Pankaj Agarwal — in connection with the case.
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How the Alleged Fraud Worked
The HSPCB case is part of a much larger alleged banking fraud spanning eight Haryana government departments.
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Investigators claim public money was diverted through fake or non-existent fixed deposits and suspicious banking transactions before being routed through shell companies.
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The CBI alleges Kumar personally oversaw the investment process and facilitated the transfer of pollution board funds to the Chandigarh branch of the bank, allegedly exceeding prescribed limits for fixed deposits.
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The probe found that government funds were first moved into a bank account that allegedly lacked documented departmental approval. Officials said the pollution board could not produce records explaining how the account was opened.
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What investigators found next raised even more questions.
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According to the CBI, the promised fixed deposits were never created. Instead, funds were allegedly drained through fraudulent debit transactions, resulting in a net loss of Rs 169 crore to the state exchequer.
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22 arrested so far
With Kumar's arrest, the total number of arrests in the wider scam has risen to 22.
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The CBI has already filed charge sheets against 17 accused, including six officials from IDFC First Bank and AU Small Finance Bank, three Haryana government officials, two companies, and six private individuals.
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The agency is also probing related cases involving Chandigarh Smart City Limited (CSCL) and CREST, where charge sheets have already been filed.
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In another major development, the CBI arrested two former bank officials linked to the Rs 593-crore fraud.
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A special CBI court in Panchkula remanded Charanjeet Singh Randhawa, former branch head of AU Small Finance Bank, and Mohammad Shamim Dhar, former team head of IDFC First Bank's Government Business Group, to three days of CBI custody.
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Investigators are continuing to trace the money trail and identify all those involved in what is emerging as one of Haryana's biggest alleged government fund scams.
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Source: The Economic Times
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Goods & Services Tax Appellate Tribunal (GSTAT) issued clarification on the Form of dresses or robes to be worn by members.
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In supersession of Officer Order No. 114/2025 issued vide F. No. GSTAT/Procedural Rules/24-25/07 dated 30.06.2025, the following dress code is hereby prescribed during the proceedings of the Goods and Services Tax Appellate Tribunal (GSTAT).
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Members, including Vice Presidents, while discharging quasi-judicial work shall wear the following as part of their dress, which shall be sober, presentable and dignified.
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(a) Black full sleeve jacket or blouse, white collar stiff or soft, with white bands, sans gown.
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White blouse, with or without collar, with white bands and with a black open chest coat.
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(b) Sarees o long skirts (white or black or any mellow or subdued colour without any print or design) or flare (white, black or stripped or grey) or Punjabi dress (Churidar Kurta or Salwar-Kurta with or without dupatta (white and black) or traditional dress with black coat and white brands sans gown.
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(a) A black buttoned up coat, chapkan, achkan, black sherwani and white bands sans gown.
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(b) A black open chest coat, white shirt, white collar, stiff or soft, and white bands sans gown.
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In either case wear long trousers (white, black stiped or grey) Dhoti excluding jeans. This dress code shall be observed with the immediate effect.
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(Dr. S.K. Mishra) President, GSTAT
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GSTN Advisory no. 666 dated 01.07.2026
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It is informed that the Aggregate Annual Turnover (AATO) functionality is currently being upgraded to enable automatic updation of AATO as subsequent returns are filed post amendment window. As this enhanced functionality is being deployed from 1st July 2026, the window for amendment of AATO by taxpayers for FY 2025-26 has been revised on the GST Portal.
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GSTN had earlier issued an advisory dated 02 May 2022 regarding the functionality for amendment of Aggregate Annual Turnover (AATO) on the GST Portal, which was applicable for AATO till FY 2024-25. Under the said advisory, taxpayers were provided the facility to amend their turnover during the month of May.
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In continuation thereof, it is informed that the timelines for submission of amendment applications and verification of amended AATO details by Tax Officers, in respect of FY 2025-26, have been revised.
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To ensure greater consistency, accuracy, and uniformity in the reporting of AATO across various modules of the GST Portal, certain system-level enhancements are being implemented. Consequently, the revised timelines for amendment of AATO for FY 2025-26 by the taxpayers and subsequent action by the tax officers are as under:
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AATO Amendment Application window for FY 2025-26
01 July to 31 July 2026
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Review by jurisdictional Tax officer
01 Aug to 15 Aug 2026
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Accordingly, the facility for amendment of AATO, which was earlier available during May as per the previous advisory, shall now be made available from 01 July to 31 July 2026 for FY 2025-26. The amended AATO details will be available for review of Tax Officers from 01 Aug to 15 Aug.
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All taxpayers are requested to take note of the revised timelines and carefully review the AATO details while submitting the amendment application and ensuring that the amended details are accurate before submission.
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In case of any difficulty or concern, taxpayers are advised to raise a grievance through the Self-Service Portal available on the GST Portal, along with all relevant details, to facilitate prompt and effective resolution.
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GSTN Advisory no. 665 dated 01.07.2026
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Gross and Net GST revenue collections for the month of June, 2026
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CBIC -
To commemorate nine years of the Goods and Services Tax (GST), the Central Board of Indirect Taxes and Customs (CBIC) organized a special celebration at CSOI, New Delhi, on 1 July 2026. The event was held under the theme, ‘सुगम कर व्यवस्था, सशक्त भारत’, highlighting GST's
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GST Indore -
The 9th #GSTDay was celebrated with great enthusiasm at CGST & Central Excise Commissionerate, Indore under the theme "सुगम कर व्यवस्था, सशक्त भारत".
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GST Samvad an interaction among officers, taxpayers, trade & industry representatives, and tax professionals was organised on 30.06.2026 to commemorate nine years of GST as a transformative reform. The programme highlighted taxpayer facilitation initiatives, digital services, policy updates, and the importance of timely and voluntary compliance.
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9 Years of GST! The CGST Indore Commissionerate celebrated the 9th anniversary of the Goods and Services Tax. The event marked nearly a decade of economic transformation and a unified national market.
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Recognizing Excellence: The Department felicitated leading revenue contributors-Bharat Petroleum( @BPCLimited), HDFC Limited(@HDFCLTD), and MRF Limited(@MRF_Corporate)-for their exemplary tax compliance.10 dedicated departmental officers and a meritorious student were also honored
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Taxpayer First: CGST Indore Commissioner Shri Peeyoush Bhati highlighted GST’s role in nation-building and announced that the Commissionerate will now regularly host monthly meetings with taxpayers to address grievances and ensure a transparent, efficient regime.
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GST Aurangabad Commissionerate -
CGST AURANGABAD building lit up to kick in early 9th GST day celebrations
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CGST Mumbai West -
As part of the #GSTPakhwada on occasion of upcoming 9th GST Day, on this year’s theme "सुगम कर व्यवस्था, सशक्त भारत” (Easy Tax System, Empowered India), CGST Mumbai West Commissionerate organised an Essay Writing Competition for officers and staff.
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The winners and participants were felicitated by the Hon’ble Commissioner, CGST&C.Ex. Mumbai West appreciating their enthusiasm and insightful contributions.
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WIRC of The Institute of Cost Accountants of India
Celebrating one of India’s landmark tax reforms that strengthened transparency, unity and the vision of One Nation, One Tax, One Market.
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DGTPS MUMBAI CBIC
9वें GST दिवस के उपलक्ष्य में DGTS MZU & AZU द्वारा "Nine Years of GST: Perspective from Taxpayers" विषय पर Kendriya Vidyalayas के विद्यार्थियों हेतु एक वेबिनार आयोजित किया गया।
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इस सत्र के माध्यम से GST के प्रति जागरूकता, वित्तीय साक्षरता को बढ़ावा दिया गया तथा विद्यार्थियों को राष्ट्र निर्माण में कराधान की भूमिका से अवगत कराया गया।
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CGST Thane -
CGST Thane organized a 'Hindi & Marathi Essay Competition' for officers & staff
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The Commissioner honored winners with certificates for outstanding performance
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Celebrating language, awareness & commitment to GST
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CGST MUMBAI EAST
As part of the 9th GST Day celebrations, CGST & Central Excise, Mumbai East Commissionerate organised Essay Writing and Drawing Competitions for students of Sandesh Vidyalaya & Junior College, Vikhroli (East), on 30.06.2026, with enthusiastic participation from young students.
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The essay competition focused on GST and citizens’ responsibility towards tax compliance, while the drawing competition encouraged students to express ideas creatively. Prizes were awarded to winners, promoting taxation awareness and responsible citizenship among young minds.
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As part of the 9th Anniversary celebrations of GST, CGST & Central Excise, Mumbai East Commissionerate organised GST "SAMVAD" and interactive session with members of trade and tax professionals on 29 June 2026 at Vikhroli to mark the occasion with active participation.
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The session witnessed enthusiastic participation. Queries on filing of appeals, GST returns and other GST-related issues were addressed by officers, making it a valuable platform for knowledge sharing, constructive dialogue and promoting voluntary tax compliance across sectors.
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CGST & Customs Thiruvananthapuram Zone
On the occasion of International Day Against Drug Abuse & Illicit Trafficking, the officers and staff of CGST & Customs Thiruvananthapuram Zone took a solemn pledge under the #NashaMuktBharatAbhiyan to build a society free from the menace of drugs.
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DGTS AHMEDABAD CBIC
30.06.2026 को,DGTS AZU और MZU ने JG University के साथ मिलकर GST Awareness & Overview पर एक हाइब्रिड सेमिनार आयोजित किया।DGTS के Pr. ADG,श्री सुमित कुमार ने उद्घाटन भाषण दिया। CBIC के रिटायर्ड सुपरिटेंडेंट श्री जॉन क्रिश्चियन मुख्य वक्ता थे। #DGTS #GST #GSTDAY2026 #CBIC
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Article Writing Competition 2026
To commemorate 9th Year of GST, Online Tax Update (OTU) launched 'Article Writing Competition 2026'. Registration starts today 1st July 2026 and ends on 15th July 2026. Article submission till 31st July 2026 and Winner Announcement in August, 2026. Cash Award + Certificate of Participation. Participation fees Rs. 300/- Read more
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From AY 2026-27, the option to report 'Other Exempt Income' was removed.
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Earlier, this was useful in situations such as:
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- Sale of rural agricultural land/ Reporting of Gifts from Relatives - although disclosure was not required as same is not income .
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The column of 'Other Income' under Exempt incomes has now been added.
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✨ Organized by Online Tax Update - Article Writing Competition 2026
📢 Unleash Your Writing Skills & Share Your Knowledge!
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Are you passionate about writing on Taxation, Law, - burning issues in Taxation?
Here’s your chance to showcase your talent and get recognized!
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Objective
In this context, there is a strong need for experts, practicing professionals, corporate tax teams, government officers, and article trainees who have a flair for writing to come forward and contribute. They are encouraged to write on topics related to GST Law, GST portal functionalities, GST administration, audit, assessment, appeals, and other relevant areas.
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The objective is to present these subjects in a simple and easy-to-understand language so that professionals across the taxation field can grasp the concepts effectively and ensure better compliance.
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Eligibility:
- It is open to all professional experts both Practicing and on Corporate job, CA/CS/ICMAI, Advocate, Government Officer, Article training and Law students as well.
Topic:
- Article should be written on Goods and Services Tax (GST).
Submission Criteria:
- Article must be submitted in word file
- Words limit is between 1000 to 1500
- Should not have been published in any other tax forum/portal
- Co-authoring is not permitted
Author Bio-data:
- Author’s name
- Author’s Profile
- Author’s photo
- WhatsApp number
- E-mail Id
📅 Registration Start Date: 1st July, 2026 to 15th July, 2026
⏳ Last Date for Article Submission: 31st July, 2026
🏆 Result Declaration: August, 2026
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💰 Participation Fees: Rs. 300/-
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Submission of Article:
- Article must be sent via email at taxupdate.otu@gmail.com in word file with subject line ‘Article WC 2025 | Mobile no.| Topic Tile
- PDF is not allowed
- Font should be ‘Calibri (Body)’ & font size -12
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Contact: 7738647904 for any query
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A Glimpse of Last Year - "Article Writing Competition 2025"
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Recap of Latest updates posted on 30.06.2026
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Complete CGST, IGST, and Compensation Cess Acts & All Rules and GSTAT Rules
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The government has extended the due date for filing of appeal before the Goods and Services Tax Appellate Tribunal (GSTAT) under section 112(1) read with section 112(3) to 31.07.2026.
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Centre has extended the last date for filing appeals before the Goods and Services Tax Appellate Tribunal (GSTAT) to July 31, 2026, giving taxpayers an additional month to submit their cases after a surge in filings led to technical difficulties on the GSTAT portal.
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GST & IDT Committee has requested the Chairman, IDT Committee, ICAI, New Delhi to urgently represent before the respective forums for the date extension of GSTAT, i.e., 30-Jun-2026.
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The Union government on Tuesday granted a six-month extension to the tenure of Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal till December 2026.
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The central government is working on a scheme to bear 90 per cent of the CBAM compliance costs for MSMEs as exporters grapple with the European Union's new carbon border tax that came into force this year..
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In a major operation the officers of the Directorate of Revenue Intelligence (DRI) successfully dismantled a trans-border gold smuggling syndicate and seized 15 kg foreign-origin smuggled gold, valued at approximately Rs. 21.40 crore, operating from Delhi.
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The Government had earlier provided a full Customs Duty exemption on imports of critical petrochemical products till 30th June 2026…
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Export consignments to West Asia will continue to receive enhanced insurance cover against payment defaults until September 30, the Directorate General of Foreign Trade (DGFT) said in a notification on Monday.
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The Hon'ble Madras High Court pronounced on 08.06.2026 in the case of M/s. Fastenex Private Limited that GST Notices u/s 74 Cannot Fail Solely Because Multiple Financial Years Are Covered.
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Centre has extended the last date for filing appeals before the Goods and Services Tax Appellate Tribunal (GSTAT) to July 31, 2026, giving taxpayers an additional month to submit their cases after a surge in filings led to technical difficulties on the GSTAT portal.
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The extension applies to appeals filed under Section 112(1) read with Section 112(3) of the Goods and Services Tax (GST) law.
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The revised deadline replaces the earlier cut-off of June 30, 2026, which had been notified by the government on September 17, 2025.
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The decision follows recent representations from various stakeholders who flagged technical issues arising from a rush of appeals being filed on the GSTAT portal ahead of the deadline.
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While noting that the original due date had been notified well in advance in September 2025, the government said filing activity had intensified sharply in recent weeks. It said 30,000 appeals were filed in the last 15 days alone, with daily filings touching a peak of 5,500 appeals.
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Advising against eleventh-hour filings, the government urged taxpayers to complete their appeal submissions well in advance to ease pressure on the GSTAT portal.
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The GST Appellate Tribunal serves as the first judicial appellate forum for taxpayers seeking to challenge orders issued by GST authorities after the disposal of their first appeals.
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Source: The Economic Times
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The Hon'ble Madras High Court pronounced on 08.06.2026 in the case of M/s. Fastenex Private Limited that GST Notices u/s 74 Cannot Fail Solely Because Multiple Financial Years Are Covered.
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Madras High Court delivered a common order in a batch of writ petitions concerning proceedings initiated under Section 74 of the Central Goods and Services Tax Act, 2017 and the Tamil Nadu Goods and Services Tax Act, 2017. The judgment arose from a large batch of approximately 250 writ petitions involving different taxpayers and covering tax periods from the inception of GST on 1 July 2017 up to 2025. Although many petitioners later opted to have their matters remitted to the original or appellate authorities, the Court retained a substantial number of petitions for adjudication because they involved significant questions of law regarding the jurisdiction and powers of the proper officer under Section 74.
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Complete CGST, IGST, and Compensation Cess Acts & All Rules and GSTAT Rules
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- Tracking of Notifications, Circulars and Orders, and
- Content Links through Bookmarks
by Adv. (CA) Rakesh Garg & Sandeep Garg, CMA, FCA
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Export consignments to West Asia will continue to receive enhanced insurance cover against payment defaults until September 30, the Directorate General of Foreign Trade (DGFT) said in a notification on Monday.
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Earlier, the enhanced cover for exporters taking credit risk insurance from Export Credit Guarantee Corporation (ECGC) was available for shipments to West Asia sent between March 16 and June 15.
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The enhanced risk cover announced on March 19 was part of the Resilience and Logistics Intervention for Export Facilitation (RELIEF) scheme under the Export Promotion Mission (EPM) to support exports to West Asia in view of the Iran war.
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"The eligibility timelines under Component II of the EPM RELIEF intervention are extended up to September 30, 2026 to support Indian exporters and mitigate logistics challenges arising out of the continuing West Asia Crisis," the DGFT said.
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Source: The Economic Times
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Press release ID 2279424 dated 30.06.26
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The Government had earlier provided a full Customs Duty exemption on imports of critical petrochemical products till 30th June 2026, as a temporary and targeted relief in view of the conflict in West Asia and the consequent disruptions in global supply chains.
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The exemption was provided to ensure sufficient availability of petrochemicals in the domestic market as Indian petroleum companies had been asked to concentrate on the production of LPG during this period. As the situation is gradually normalizing, to ensure a smooth and non-disruptive transition for the affected sectors, it has been decided to extend the said exemption by a further period of 15 days, that is, till 15th July 2026.The list of products covered remains the same as notified earlier.
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The Government remains committed to supporting India's manufacturing sector. As before, the exemption is expected to benefit a wide range of sectors dependent on petrochemical feedstock and intermediates, including plastics, packaging, textiles, pharmaceuticals, chemicals, automotive components and other manufacturing segments. This will also provide relief to consumers of final products.
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Link to previous press note issued:
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Press release ID 2279409 dated 30.06.2026
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In a major operation the officers of the Directorate of Revenue Intelligence (DRI) successfully dismantled a trans-border gold smuggling syndicate and seized 15 kg foreign-origin smuggled gold, valued at approximately Rs. 21.40 crore, operating from Delhi.
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DRI officers intercepted an international courier consignment originating from Thailand at Courier Terminal, Delhi. The consignment was in the name of a firm linked to a foreign national.
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A meticulous examination of the consignment declared as "worn gear", led to the recovery of eight disc-shaped pieces of foreign-origin gold, each weighing 1.5 kg, ingeniously concealed inside gear parts. In total, 12 kg smuggled foreign-origin gold was recovered from the courier consignment.
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Simultaneous searches conducted at the residence of the intended recipient and the alleged mastermind resulted in the recovery of two more identical disc-shaped pieces of foreign-origin gold, each weighing 1.5 kg.
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Four persons, including the mastermind, who is a repeat offender, and a foreign national have been arrested in relation with the case.
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Preliminary investigations also reveal that crypto-currency was being used to transfer the money across borders to finance the smuggling.
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The central government is working on a scheme to bear 90 per cent of the Carbon Border Adjustment Mechanism (CBAM) compliance costs for micro, small and medium enterprises (MSMEs), as exporters grapple with the European Union's new carbon border tax that came into force this year, according to a report by The Indian Express.
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However, the tax concern is no longer limited to the EU. The United Kingdom has already confirmed its own carbon border tax, which comes into effect from January 1, 2027. Countries such as Australia, Canada and the United States are considering similar border carbon measures.
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As carbon border taxes gain traction globally, they are set to reshape the way countries trade, particularly for carbon-intensive exports. Here's a look at what CBAM is, why more countries are adopting it, and what it could mean for India's exporters.
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What is CBAM and how does it work?
The CBAM is the EU’s carbon border tax designed to put a price on the carbon emitted during the production of carbon-intensive goods that are entering the bloc and to encourage cleaner industrial production in non-EU countries.
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Currently, the CBAM covers six sectors: iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. The mechanism started with a two-year transition period from October 2023 to December 2025, during which EU importers of these goods from non-EU countries were required to report the embedded emissions associated with their imports, but were not required to pay the carbon levy.
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The mechanism became fully operational from January 1, 2026. Importers are now required to purchase CBAM certificates corresponding to those emissions, unless an equivalent carbon price has already been paid in the country of origin.
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In practice, EU importers sourcing products such as steel, aluminium or fertilisers from India will have to factor in this additional carbon cost. While the levy is paid by the importer, it is expected to increase the cost of Indian exports in the EU market, making carbon-intensive products less competitive unless exporters reduce their emissions or absorb part of the additional cost.
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Who else is moving in this direction?
- The UK has already announced its own CBAM, and the mechanism comes into effect from January 1, 2027.
- Norway, which is a part of the European Economic Area (EEA), is actively preparing to implement its own carbon mechanism in 2027.
- United States lawmakers have introduced the 'Foreign Pollution Fee Act (FPFA)', a bill aimed at imposing tariffs on imported products manufactured in countries with higher carbon intensities than US baselines.
- Canadahas explored the possibility of introducing a carbon border adjustment mechanism, but it has not yet taken any concrete steps toward implementation.
- Australiahas examined whether additional measures are needed to address carbon leakage, but has not announced plans to introduce a CBAM.
- Taiwanis developing its own version of CBAM to align with international regulations like the EU's. The country already operates a carbon fee system, under which major manufacturers are required to pay a fee on greenhouse gas emissions exceeding 25,000 metric tonnes annually.
Why this matters for India
India is among the countries expected to be significantly affected by the EU's CBAM as it exports a range of products covered under the mechanism, including iron and steel, aluminium and fertilisers. These sectors are carbon-intensive and rely heavily on fossil fuel-based production, making them more vulnerable to carbon-related trade measures.
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The EU is India's third-largest trading partner, with trade in goods worth €118 billion in 2025, accounting for 11.1 per cent of India's total trade. Early signs of the impact are already emerging. Government data showed that India's iron and steel exports to the EU declined 13 per cent in the four months through April following the rollout of CBAM. Furthermore, a study published last week by the Indian Council for Research on International Economic Relations (ICRIER) estimated that the EU's CBAM could reduce India's steel exports to the bloc by 24 per cent, with fertilisers and aluminium products also expected to be significantly affected.
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Besides the carbon levy, CBAM requires exporters to establish systems for measuring, reporting and verifying product-level emissions. The compliance burden is expected to be particularly significant for MSMEs, which has prompted the Centre to mull a scheme to cover 90 per cent of their compliance costs.
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Source: Business Standard
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The Union government on Tuesday granted a six-month extension to the tenure of Central Board of Direct Taxes (CBDT) Chairman Ravi Agrawal till December 2026.
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The 1988 batch IRS officer was to retire on Tuesday(June 30).
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The Appointments Committee of the Cabinet (ACC) in an order on Tuesday said it has approved "re-appointment" of Ravi Agrawal as Chairman, CBDT on contract basis for a period of six months with effect from 01.07.2026 or until further orders, whichever is earlier, on the terms and conditions applicable to re-employed central government officers, in relaxation of the Recruitment Rules.
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He was made chief of CBDT, the policy-making body for the Income Tax Department, for a one-year term in June 2024. His tenure was extended by a year in June 2025.
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The CBDT is headed by a chairman and can have up to six members, who are equivalent to special secretary rank.
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Source: The Economic Times
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Before applying for Income Tax registration, GST registration, ICEGATE, or DSC mapping, you can use the TRACES PAN Verification facility to check whether the name in the PAN database is correctly aligned with the PAN number.
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Helps identify name mismatches in advance and avoid registration issues.
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GST & IDT Committee has requested the Chairman, IDT Committee, ICAI, New Delhi to urgently represent before the respective forums for the date extension of GSTAT, i.e., 30-Jun-2026.
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Tata Steel Limited said tax authorities have filed an appeal seeking restoration of penalties worth Rs. 368.72 crore that were earlier dropped in a GST adjudication order, even as proceedings on the underlying demand remain stayed by the Jharkhand High Court, according to a stock exchange filing.
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"One June 16, 2026, the Assistant Commissioner, Division-I, CGST & Central Excise , Jamshedpur, Jharkhand filed an appeal before the Commissioner (Appeals) of CGST & Central Excise, Ranchi against the above-mentioned Adjudication Order dated December 18, 2026, to the extend that the Adjudicating Authority has dropped the penalty amounting to Rs. 3,68,72,21,158/-," Tata Steel said in its exchange filing.
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The appeal, filed on June 16 by the Assistant Commissioner, CGST & Central Excise, Jamshedpur, challenges the December 18, 2025, adjudication order to the extent it waived the penalty.
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The original show-cause notice, issued in June 2025, proposed disallowance of input tax credit for FY 2018-19 to FY 2022-23, with an aggregate GST demand of about Rs. 1,007.55 crore. Of this, Tata Steel said it has already paid Rs. 514.19 crore in the normal course, leaving an alleged exposure of Rs. 493.35 crore.
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In December 2025, the adjudicating authority confirmed the tax demand of Rs. 493.35 crore, imposed a penalty of Rs. 638.83 crore and applicable interested, while dropping an earlier proposed penalty of Rs. 368.72 crore. Tata Steel subsequently moved the Jharkhand High Court, which granted a stay on all further proceedings in March 2026.
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"This matter is, inter-alia, contingent upon the final adjudication of the issue concerning the issuance of show cause notices for multiple periods, which is presently sub judice before the High Court," Tata Steel said.
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Tata Steel added that it has a good case on merit and hence will contest the same before the Appellate Authority within the statutory timelines, noting that the development has no impact on its financial or operational position, arising from the said appeal.
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Source: The Economic Times
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With the June 30 deadline for filing legacy appeals before the Goods and Services Tax Appellate Tribunal (GSTAT) fast approaching , tax professionals, chartered accountants and industry bodies have urged the Finance Ministry to extend the filing window, warning that persistent technical glitches on the GSTAT portal could prevent thousands of taxpayers from filing their appeals before the deadline.
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The demand comes as taxpayers seek to file appeals arising from nearly nine years of litigation accumulated during the period when the Tribunal remained non-operational. Experts said the combination of a massive backlog, voluminous documentation and continuing portal-related issues has significantly constrained taxpayers' ability to meet the deadline.
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According to Aditya Singhania, Founder of Trackase, the backlog is estimated at nearly four lakh to 4.5 lakh legacy appeals, while only around 36,929 appeals have been filed nationalwide so far.
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"The ground reality is deeply concerning. Against an anticipated backlog of nearly four to four and a half lakh appeals accumulated over nine years of the Tribunal's non-operationality, only around 36,929 appeals have been filed nationally as of now," Singhania said.
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He attributed the slow pace of filings to the teething troubles of the newly launched e-filing portal, including server time-outs, authentication challenges, payment gateway reconciliation issues and a filing structure that requires considerable time and effort to navigate.
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Experts cite portal hurdles, record backlog
According to experts and representations submitted to the Finance Ministry, taxpayers continue to face multiple technical issues on the GSTAT portal, including session expiry, repeated login failures., Aadhaar authentication problems, Digital Signature Certificate (DSC) validation failures, payment reconciliation delays and incomplete integration between the Goods and Services Tax Network (GSTN) and the GSTAT portal.
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Experts said taxpayers are also required to retrieve and compile extensive records accumulated over several years, including adjudication orders, invoices, reconciliations, e-way bills, ledger extracts and other supporting documents, making the filing process particularly time-consuming.
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CA Nitin Bansal, State-President, BJP CA Cell Haryana, said the Finance Ministry has received several representations highlighting the practical challenges taxpayers are facing in filing appeals before the Tribunal.
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"With the Tribunal becoming operational after nearly nine years, taxpayers must now prepare and file a substantial backlog of appeals within a limited window, many involving voluminous, multi-year records, even as the GSTAT e-filing portal continues to stabilise," Bansal said.
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He added that extending the deadline would be revenue-neutral as the mandatory pre-deposit and other conditions would remain unchanged while ensuring genuine taxpayers are not denied their appellate remedy because of circumstances beyond their control.
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Over-time extension sought
CA Sonu Goel, Chairman, Panipat Branch of the Institute of Chartered Accountants of India (ICAI), said a one-time extension would ensure disputes are decided on their merits rather than procedural constrints.
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"One-time extension would safeguard taxpayers' right to appeal, uphold the principles of natural justice, and ensure that dispute are decided on merits rather than being defeated by procedural or technological constraints. This pragmatic relief would further reinforce the Government's commitment to ease of doing business while maintaining certainty and confidence in the GST ecosystem," Goel said.
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Parag Mehta, Partner at N.A. Shah Associates LLP, said the portal continues to experience issues ranging from login failures and incorrect fee calculations to disappearing data.
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"Considering the fact that the portal is not fully supporting the filing process and the number of appeals filed remains significantly lower than expected, the deadline should be extended. GSTAT is an important appellate remedy and taxpayers should not be deprived of that opportunity," Mehta said.
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Bas association flags nationwide concerns
The Sales Tax Bar Association has also written to the Finance Ministry seeking an extension of the filing deadline, stating that taxpayers and tax professional across the country continue to face significant practical and technical difficulties while filing appeals through the GSTAT portal.
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In its representation, the association said the present limitation period covers appellate orders accumulated over nearly nine years when the Tribunal remained non-functional, requiring taxpayers to retrieve historical records and prepare detailed documentation within a limited period.
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The association highlighted recurring issues including server interruptions, repeated Aadhaar authentication and DSC validation failures, payment gateway reconciliation delays, manual duplication of information already available on the GSTN portal and challenges in uploading voluminous records.
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It warned that if the deadline is not extended, thousands of taxpayers could lose the opportunity to pursue their statutory appeals because of technological and procedural constraints, potentially leading to avoidable litigation before various High Courts.
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Prabhat Ranjan, Senior Director at Nexdigm, said extending the filing deadline has become "the need of the hour".
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"The appellate process should be about the actual merits of the issues between both parties and not technical questions of delay. This is a taxpayer-friendly measure that will make GST dispute resolution processes more fair and credible," he said.
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As of publication, the government has not announced any extension of the June 30 deadline for filing legacy GSTAT appeals. While the GSTAT has extended the period for relaxed scrutiny of filed appeals until December 31, 2026 , tax professionals, industry experts and representative bodies continue to seek a one-time extension of the filing deadline, arguing that additional time would enable taxpayers to exercise their statutory right of appeal without affecting revenue, as the mandatory pre-deposit requirements would continue to apply.
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Source: The Economic Times
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Businesses shifting their principal place of business to a new GST jurisdiction will not have to restart pending tax proceedings with the Central Board of Indirect Taxes and Customs (CBIC) clarifying that the new jurisdictional authority will take over and complete all ongoing cases from the stage at which they were left, reported PTI.
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The clarification comes after the CBIC received references from field formations seeking guidance on the validity of proceedings and the authority responsible for handling cases when a registered taxpayer changes jurisdiction because of a shift in its principal place of business.
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Under the circular, any action or proceeding - including investigation, audit, show cause notice or adjudication under the Central GST law - initiated by the tax officer having jurisdiction over the registered taxpayer at the time the action was undertaken (transferor jurisdiction authority) will remain valid even if the taxpayer subsequently shifts to another tax jurisdiction (transferee jurisdictional authority).
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"The transferee jurisdictional authority shall act upon, give effect to, and proceed on the basis of such earlier valid action taken by the transferor jurisdictional authority, as if it had itself initiated the same," the CBIC said in the circular.
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The indirect tax board further clarified that if any fresh issue comes to the notice of the earlier jurisdictional authority after the taxpayer has shifted, the tax officer should intimate the new jurisdictional officer for appropriate action.
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"Where the taxable person migrates to another jurisdiction during the pendency of any action or proceeding initiated by the transferor jurisdictional authority, the transferee jurisdictional authority shall take over and conclude the same from the stage at which it stood at the time of migration/ transfer," the CBIC circular said.
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The new jurisdictional officer will also have the authority to initiate and conclude any consequential proceedings arising from the case.
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Rajat Mohan, Managing Partner at AMRG Global, said the clarification addresses a key procedural gap under the GST regime.
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"By clearly defining the responsibilities of transferor and transferee authorities, CBIC has removed ambiguity that often resulted in jurisdictional objections and delays in adjudication," Mohan said.
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Source: The Times of India
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On the occasion of 9th GST Day to be celebrated on 1st July, 2026 the Central Board of Indirect Taxes and Customs vide Office Memorandum dated 29.06.2026 has decided to grant Certificate of Meritorious Service (CBIC-CMS) to the following officers:
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The Malad Chamber of Tax Consultants made a representation to the Hon'ble Union Finance Minister, Smt. Nirmala Sitharaman, New Delhi on 26.06.2026 requesting an extension of the statutory deadline for filing GSTAT appeals under Section 112 of the CGST Act, 2017 from 30th June 2026 to 31st December 2026.
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Several important financial changes are set to take effect on July 1, 2026. These changes could impact taxpayers, bank customers, credit card users, passport applicants and Aadhaar card holders. Here's a look at the key financial changes coming into effect in July 2026.
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1. ITR-1, ITR-2 deadlines
For taxpayers filing ITR-1 and ITR-2 forms, due dates for filing returns for the Financial Year 2025-26 (Assessment Year 2026-27), is July 31, 2026. Missing the prescribed deadlines could result in penalties, restrictions on choosing certain tax regimes and limitations on carrying forward eligible losses to future assessment years.
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2. Free update in Aadhaar card
Starting July 1, the Unique Identification Authority of India (UIDAI) has temporarily waived off the Rs 75 fee for updating your registered email address on your Aadhaar card. This service will be completely free of cost for six months (until December 31, 2026).
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According to an official notification, "It has been decided to waive off the charges (i.e., Rs 75) for availing the service of email address update through the Aadhaar mobile application and make it free of cost for a period of six months with effect from July 1, 2026, to December 31, 2026."
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3. SBI credit card changes
SBI Card has announced changes to the reward point programme for select PhonePe SBI Credit Cards, which will come into effect from July 1, 2026. The revision affects both PhonePe SBI Credit Card PURPLE and PhonePe SBI Credit Card SELECT BLACK card holders, as new limits on earning reward points and a broader list of transactions that won't earn reward points have been introduced.
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4. HDFC Credit card changes
From July 1, 2026, HDFC credit card holders will be eligible for three complimentary domestic airport lounge visits per calendar quarter, provided they have spent at least Rs 60,000 in the preceding calendar quarter.
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For instance, to avail lounge access during the July–September 2026 quarter, a card holder must have spent Rs 60,000 or more between April and June 2026. This spend-based eligibility will apply to every subsequent calendar quarter.
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5. Higher passport fees
Obtaining a passport will soon become more expensive for both normal and Tatkaal applicants. The Ministry of External Affairs has increased services fee for normal and tatkal passports (India and overseas) from July 1, 2026.
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6. New rules for banks on mis-selling of bank products
The RBI has announced new rules to curb the mis-selling of financial products by banks. Under the new framework, customers who are mis-sold products will be entitled to a full refund and compensation for losses. The rules are set to come into effect on July 1, 2026.
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Source: The Economic Times
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The recent meeting between Prime Minister Narendra Modi and President Droupadi Murmu, followed by a meeting between Home Minister Amit Shah and the President, have fuelled speculation over a possible Union cabinet reshuffle as well as changes in the BJP's organisational structure.
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According to sources, the reshuffle is likely to take place before the upcoming Monsoon Session of Parliament.
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Among the names being discussed is that of former Reserve Bank of India (RBI) governor Shaktikanta Das, who is currently serving as the Principal Secretary to the Prime Minister.
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Sources indicated that Das is being considered for the post of Union finance minister, while the incumbent , Nirmala Sitharaman, is expected to be shifted to the human resource development (HRD) ministry. Sitharaman has been serving as the Union Minister for finance and corporate affairs since 2019.
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There has, however, been no official confirmation from either the government or the BJP regarding any proposed changes.
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If the move materialises, it would bring into the Cabinet a seasoned administrator with more than four decades of experience across several areas of governance.
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Das served as the 25th Governor of the RBI from 2018 to 2024. Before assuming charge at the RBI, he was a member of the 15th Finance Commission and India's G20 Sherpa.
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Over the course of his career, Das has held several key positions in both the Central and State governments, handling portfolios related to finance, taxation and industries and infrastructure.
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During his tenure in the finance ministry, he was closely associated with the preparation of eight Union Budgets, giving him extensive experience in public finance and economic policymaking. Besides, Das was also the senior Department of Economic Affairs official in the finance ministry during the planning and implementation phase of demonetisation.
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A postgraduate from St. Stephen's College, University of Delhi, Das has also served as India's Alternate Governor to the World Bank, the Asian Development Bank, the New Development Bank, and the Asian Infrastructure Investment Bank. He has represented India at major international forums, including the IMF, G20, BRICS, and SAARC.
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Kolkata is likely to host the 57th meeting of the GST Council next month, sources said, although the Union Finance Ministry has not yet officially confirmed the venue or the schedule. The meeting is expected to be held in the second half of July, and could take up the next round of indirect tax policy reforms.
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Hosting the meeting in Kolkata holds significance as it would mark one of the first major meetings of a Constitutional federal body in West Bengal after the Assembly elections. While the GST Council independently decides its agenda and meeting schedule, the choice of Kolkata would coincide with the Centre’s broader emphasis on strengthening the State’s profile as a destination for investment and financial activity following the change in government.
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New reforms
The previous GST Council meeting, held on September 3, 2025, came after a gap of nearly nine months, despite the rules providing for at least one meeting every quarter. That meeting unveiled GST 2.0, including rate rationalisation and measures to ease compliance. Tax experts now expect the council to consider another set of policy reforms, some of which were discussed during 4th Annual Seminar on Direct and Indirect Taxes of the Bengal Chamber of Commerce & Industry (BCCI).
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Vivek Jalan, Chairperson of the National Fiscal Affairs and Taxation Committee of BCCI, said that in the spirit of GST 2.0, which was launched to strengthen India’s manufacturing base, the council should correct the anomaly of non‑refund of Input Service ITC under the inverted duty structure. While GST 2.0’s rate rationalisation has supported consumption, the cost pressures has deepened on manufacturers. “Addressing this gap will ensure reducing cascading taxes, boosting competitiveness and advancing India’s vision of becoming the world’s third‑largest economy by 2047,” he said.
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Also, it has been proposed before the GST Council to consider reducing the GST rate on autism care centres and allied sectors from 18 per cent to 5 per cent. Such a measure under GST would ease the financial strain on families and institutions, while reinforcing the government’s vision of inclusive growth. “By aligning tax policy with compassion, the council can ensure that essential services for differently‑abled children remain affordable, accessible and sustainable, a step that truly reflects the spirit of GST reforms,” said Jalan.
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Source: The Hindu businesline
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The Karnataka State Chartered Accountants Association (R) (KSCAA) has submitted a representation highlighting practical and procedural issues faced by taxpayers and professionals in relation to the Goods and Services Tax Appellate Tribunal (GSTAT). The representation focuses on addressing operational challenges and suggesting measures to enhance the efficiency, accessibility, and effectiveness of the GSTAT framework.
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Considering the initial challenges faced by stakeholders in adapting to the newly operational GSTAT framework and portal, KSCAA has also requested an extension of the timelines for filing appeals and related compliances, so that taxpayers are not prejudiced on account of procedural and technical difficulties. Addressing these concerns and providing adequate transition time will facilitate smoother implementation, reduce avoidable litigation, and ensure meaningful access to the appellate remedy envisaged under the GST law.
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When Mr. Yadav from Kanpur filed his income tax return (ITR) for FY 2018-19, he combined his wife's stock market and F&O trading losses with his own income under clubbing provisions (Section 64(1)(iv)) and claimed a set-off, thereby reducing his total tax liability.
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However, the tax department objected to the claim on two grounds.
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First, her total stock market trading loss was about Rs 1.95 crore, of which only Rs 1.15 crore was attributable to funds gifted by Yadav to his wife; the remaining Rs 80 lakh came from her own resources.
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Second, the Assessing Officer treated her as an independent taxpayer and held that the gains and losses arose from trading activities undertaken in her name and account, making the losses her own and not eligible for set-off in her husband's hands. Accordingly, the tax officer rejected the clubbing claim and denied the set-off of losses.
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Unhappy with this decision, Mr Yadav filed an appeal before the commissioner of appeals (CIT (A) arguing that he maintains a joint bank account with ICICI Bank and routinely transfers money to this account citing reasons like 'investment', 'gift', 'budget'. He explained that just like these routine transfers, he transferred Rs 1.15 crore of his own money to their joint bank account and used it to trade in the stock market from her demat account.
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To support his claims, he submitted the gift deed showing he had transferred Rs 1.15 crore to his wife without any consideration and fully out of his earnings and past savings. He also filed an affidavit declaring that the amount has been transferred without any consideration and without agreement to live part.
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However, CIT (A) rejected his appeal, and so he took his case to ITAT Lucknow. The primary reason why both the CIT (A) and tax officer didn't believe him was because they thought that the income / loss generated in his wife's case was not merely the result of asset transfer (money) but rather the result of risk-taking by her.
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The idea that she herself possessed enough skill to trade in the stock market was solidified by the fact that she had earned an independent income of Rs 30,239 shown as speculative business profit, as evident from the statement of income submitted.
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CIT (A) and the tax officer concluded that on the one hand, Yadav was treating speculative business profit as an independent income of his wife, while on the other hand, a large portion of the Rs 1.14 crore-loss of his wife was being set off against his own income. Therefore, the reply of the assessee was not found to be acceptable on merits.
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Thus both CIT (A) and the tax officer ruled that Section 64(1) (iv) is not applicable if the wife possesses technical or professional qualifications and the income or loss was solely attributable to the application of his or her technical or professional knowledge and experience.
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Chartered Accountant Dharmendra Kumar appearing on Yadav's behalf in ITAT Lucknow told the tribunal that Yadav had opened that demat account in her name as well as the joint bank account in ICICI Bank. Kumar told the tribunal that she had no technical or professional expertise to trade in the stock market and so Yadav used to contribute funds to their joint bank account for trading in F&O, derivates and equities using her demat account.
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Kumar also told the tribunal that during the year, Yadav had transferred Rs 1.15 crore to her in their joint bank account where she also had Rs 80 lakh of her own funds. As a result of this, his wife had a total capital of Rs 1.95 crore. From this capital, Yadav had undertaken trading in derivatives and equities on her behalf, as a result of which she incurred a loss of Rs 1.95 crore.
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Bifurcating this loss from the derivative trading in her demat account, Kumar said while derivative trading losses of Rs 80 lakh (coming from her own funds) were attributable to her, the loss of Rs 1.15 crore were attributable to derivative transactions from the gift received from Yadav.
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Thus, Kumar argued that as per the provisions of Sections 64(1)(iv), any loss derived from such transactions was allowed to be set off against the profits made by Yadav. On May 19, 2026, Yadav won the case in ITAT Lucknow (ITA No.585/LKW/2024).
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Chartered Accountant Ashish Karundia said to ET Wealth Online: "The Tribunal has rightly reaffirmed that the clubbing provision under Section 64(1)(iv) is not a one-way street."
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According to Karundia, if income arising from assets transferred to a spouse is liable to be clubbed in the hands of the transferor, the same principle must equally apply to losses attributable to such transferred assets.
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Karundia says: "The Tribunal correctly held that derivative trading losses arising from transactions funded through the taxpayer's gift to his spouse are eligible for set-off in the taxpayer's hands. The ruling reinforces the principle that tax law should operate symmetrically, preventing a selective application of clubbing provisions."
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Chartered Accontant Naveen Wadhwa, Vice President, Research and Advisory Division, Taxmann, said to ET Wealth Online: "A common misconception is that the clubbing provisions of the Income-tax Act operate only when there is an income. Where a spouse's income is liable to be clubbed in an individual's hands, a loss from that very source is equally liable to be clubbed."
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According to Wadhwa, this conclusion is based on the principle that the expression 'income' has always been read to include a loss. So if the conditions for clubbing are otherwise met, the spouse's loss is set off against the individual's income, and any unabsorbed portion is carried forward in his own hands. The principle remains the same under the new Income-tax Act, 2025.
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ITAT Lucknow judgement and discussion
ITAT Lucknow cited several Supreme Court rulings and decisions from other ITAT benches, concluding that losses incurred by a spouse in derivative transactions from money gifted to them, must be allowed and deducted from the income of the gifting spouse. This is in accordance with Section 64(1)(iv) read with Explanation 3(i).
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ITAT Lucknow said: "Thus, the decision of the Assessing Officer and the ld. CIT(A) to deny the assessee the benefit of this set off, is not in accordance with the law and the judgments cited aforesaid."
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Therefore, ITAT Lucknow held that Yadav is entitled to set off that portion of the loss arising from trading in derivatives by his wife that resulted from transactions made with the money he had gifted her.
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However, since Yadav did not submit any evidence or working or statement showing the bifurcation of this Rs 1.95 crore loss or how these losses arose, ITAT Lucknow restored the matter to the Assessing Officer for the limited purpose of verifying the extent of losses incurred by her from transactions undertaken with the money gifted by Yadav and to allow it in accordance with the provisions of Explanation 3(i) to Section 64(1)(iv).
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In view of the fact that the debate over the assessment order and the order of the ld. CIT(A) is mainly focused on the principle of allowability, the matter of the actual amount of losses that need to be adjusted against the income of Yadav, has not been enquired into by ITAT Lucknow.
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Order: In the result, the appeal of the assessee (Yadav) is partly allowed. Orders pronounced on 19.05.2026.
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Source: The Economic Times
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Taxpayers who have accidentally deposited tax deducted at source (TDS) challans under the wrong financial year during transition to the new Income-tax Act, 2025 will have to rely on the old TRACES portal to correct the mistake.
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The new TRACES platform currently does not support this correction facility.
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The error can create problems later because the TDS credit may not reflect correctly against the taxpayer’s records for tax year 2026-27.
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This could increase the tax payable at the time of filing the income tax return (ITR) and may also trigger mismatches between TDS statements and tax records.
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The Income Tax department has been rolling out changes linked to the implementation of the new Income-tax Act, 2025. During this transition, taxpayers and deductors need to be careful while selecting the relevant financial year and tax details while making TDS payments.
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Why the TDS challan correction matters
TDS deducted by an employer, bank, company or any other deductor is linked to challan details submitted to the Income Tax department. If the financial year mentioned in the challan is incorrect, the tax payment may not get mapped properly.
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For example, if a TDS challan that should have been filed for FY27 is mistakenly deposited under FY26, the system may not recognise it for the correct tax year. This can affect the availability of tax credit while filing returns.
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According to guidance available on the Income Tax department and TRACES platforms, corrections for eligible challan details can be made through the OLTAS Challan Correction facility.
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New TRACES portal does not support this correction yet
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During the transition from the Income-tax Act, 1961 to the Income-tax Act, 2025, certain legacy correction facilities continue to remain available only on the older TRACES portal.
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Taxpayers and deductors who need to change the financial year of a TDS challan must currently use the old TRACES platform instead of the new portal.
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The correction facility is mainly relevant for deductors managing TDS payments through TAN-based compliance.
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How to correct wrong financial year in TDS challan
The correction process needs to be completed through the old TRACES portal:
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- Visit the TRACES website and log in using TAN credentials.
- Go to the section for challan correction or OLTAS challan correction.
- Select the relevant statement/payment details and raise a correction request.
- Choose the correction category and submit the request.
- Once the request becomes available, update the incorrect details, such as the financial year, wherever permitted.
- Submit the corrected request and track the status.
After processing, deductors should verify whether the updated challan details are correctly reflected in the tax records.
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What happens if the mistake is not corrected?
A wrong financial year entry can lead to several compliance issues. The taxpayer may not receive the expected TDS credit, which can increase the tax demand during ITR processing.
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- mismatch between TDS returns and challan details;
- incorrect reflection of tax payments;
- possible tax department communication;
- delays in resolving refund or credit-related issues.
Tax experts advise deductors to check challan details carefully, especially during the shift to the new tax law framework.
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Taxpayers should verify before filing returns
With changes being introduced under the Income-tax Act, 2025, taxpayers should ensure that payments, TDS statements and tax credits are aligned with the correct tax year.
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The Income Tax department has advised taxpayers to use official portals for compliance-related actions and check the latest instructions as digital systems continue to be updated.
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For now, those facing a wrong-year TDS challan entry for FY26 and tax year 2026-27 need to complete the correction through the legacy TRACES portal to avoid future tax credit issues.
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Source: Business Standard
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4 Lawgics by Ms.Nidhi Aggarwal
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Ms. Nidhi Aggarwal is delighted to present GST Notes/Law in a simplified manner under the title “ Lawgics ”. The note is prepared in a series of PDFs encompassing GST Law and the interpretations thereof in simple manner. The author with a great vision to spread complex GST law in a simple manner amongst the taxpayers, tax professionals, students and knowledge seeker is presenting the Lawgics in piecemeal at regular interval.
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Lawgics up to 168 is added for your reading
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5. GST Notes by CMA Anil Sharma
1) Shri CMA Anil Sharma, Shri CMA Gurdev Singh Saini and Smt. CMA Bhawna Sharma posted Chapter-1 to 15 containing CGST Act in simple language in PPT format. This is to make dealers, professionals, academicians, students etc. understand the basics of GST laws. Each Chapter in CGST Act, 2017 is explained in the form of Slides as given below for easy understanding of the Act:
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Chapter-15th slide is given below.
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