Today's Digest Summary
TaxCorp Daily Digest
Your trusted source for tax, regulatory & compliance intelligence | June 2026 Edition
⚡ Quick Summary
- Income Tax Season Alert: ITR forms for AY 2026-27 are live with expanded scope — ITR-1 now covers up to two house properties, and the new tax regime offers a nil-tax threshold of ₹4,00,000 with an enhanced ₹60,000 rebate under Section 87A for incomes up to ₹12,00,000
- FEMA Tightening: RBI has reduced the export proceeds realisation window from 15 months to 9 months under FEMA 23(R) — exporters must urgently review open receivables and contract terms
- IBBI Standardisation Wave: Four major IBBI circulars have simultaneously prescribed standardised forms for CIRP, PPIRP, Voluntary Liquidation, and Personal Guarantor insolvency proceedings — effective immediately for all registered insolvency professionals
- GST Enforcement Surge: Haryana posts 22% growth in State GST collections for May 2026 — far ahead of the 6% national average — signalling intensified analytics-driven enforcement across the country
📂 Category-wise Updates
🔵 Income Tax
1. ITR Form Selection Guide for AY 2026-27: Which Form Should You File?
Choosing the wrong ITR form is not a minor error — it renders your return defective. For AY 2026-27, ITR-1 and ITR-4 now accommodate up to two house properties, while assessees with directorships, foreign assets, unlisted shares, or cryptocurrency income must mandatorily shift to higher forms. The ₹1.25 lakh Section 112A threshold remains the key trigger for salaried assessees to migrate from ITR-1 to ITR-2.
⚠️ Action Item: Review your income profile — capital gains, residential status, business income — before filing. Do not default to the same form used last year without verification.
The new tax regime under Section 115BAC for AY 2026-27 features a restructured slab with a nil-tax threshold of ₹4,00,000, a new 25% slab for income between ₹20,00,001 and ₹24,00,000, and an enhanced Section 87A rebate of ₹60,000, effectively making income up to ₹12,00,000 tax-free. AMT provisions, surcharge slabs, and HUF applicability are also detailed.
⚠️ Action Item: Run a regime comparison for each client — the new regime is now the default and may be significantly more beneficial for a majority of individual assessees this year.
The Income-tax (Amendment) Ordinance, 2026, operative from 1 April 2026, inserts entries 13D and 13E into Schedule W of the Income-tax Act, 2025, granting complete exemption on interest income and capital gains from Government securities to Foreign Institutional Investors and the Bank for International Settlements, subject to prescribed information filing requirements.
⚠️ Action Item: FII clients investing in Indian G-Secs must ensure prescribed forms are filed to avail the exemption — failure to comply with the information-furnishing condition will dis-entitle the benefit.
4. Government Unveils Major Overhaul to Attract FPIs and Deepen G-Sec Market
The Ministry of Finance has liberalised the FPI framework significantly — individual PROIs can now invest via the Portfolio Investment Scheme with caps of 10% per individual and 24% in aggregate. The Fully Accessible Route now includes 15, 30, and 40-year G-Secs and Sovereign Green Bonds. General and long-term FPI sub-limits have been merged into a single category, removing concentration and security-wise restrictions.
⚠️ Action Item: Foreign investor clients should reassess their G-Sec and equity investment strategies in light of the revised limits and simplified sub-limit structure.
5. BIS Tax Exemption in India: FAQs on BISIP and Government Securities Investment Pool
A proposed ordinance grants a purposive, narrowly scoped tax exemption to the Bank for International Settlements (BIS) — covering only interest income and capital gains from Indian Government Securities held through the INR-denominated BIS Investment Pool (BISIP). This is consistent with India's existing exemption policy for entities like the European Investment Bank and Nordic Investment Bank.
⚠️ Action Item: Monitor the gazette notification for the ordinance's exact effective date; advisors to sovereign and multilateral clients should update exemption mapping schedules accordingly.
Capital gains on compulsory land acquisition are taxable on receipt of initial compensation, not on acquisition date. Enhanced compensation is taxed separately on a receipt basis with nil cost of acquisition. Section 194LA mandates TDS at 10% (threshold: ₹5,00,000) on acquired immovable property, with the Section 10(37) exemption available for urban agricultural land used for farming by individuals/HUFs.
⚠️ Action Item: Assessees receiving acquisition compensation must track receipt dates precisely, ensure TDS compliance, and evaluate Section 10(37) eligibility before filing.
📋 ITAT & High Court Rulings — Income Tax
7. ITAT Agra: No Section 115BBE Tax on Income Surrendered Before Amendment Date
In Mukesh Agarwal Vs ACIT, the ITAT Agra deleted a ₹25 lakh addition taxed under Section 115BBE, holding that the enhanced tax rate applies prospectively from AY 2018-19 (post-15.12.2016 amendment) only. Income voluntarily surrendered and properly reflected in audited books before the amendment date cannot attract the penal rate.
⚠️ Action Item: Review all pending assessments where Section 115BBE was applied to pre-amendment disclosures — grounds for challenge are strong and well-precedented.
ITAT Delhi quashed reassessments in the Anoop Jain HUF cluster, holding that mechanical adoption of Investigation Wing conclusions — without independent verification and a live link to the specific assessee's income — constitutes "borrowed satisfaction" and renders Section 147 proceedings void. Where the original assessment under Section 143(3) exists and the four-year limit has passed, the bar is even higher.
⚠️ Action Item: If your client has received a reopening notice based solely on Investigation Wing reports (especially in penny stock matters), examine whether the AO has applied independent mind — if not, challenge jurisdiction upfront.
A builder's search statement alone is insufficient to sustain an on-money addition under Section 69A in the hands of a flat purchaser. The Revenue must produce shared incriminating material, properly proved electronic evidence, and must afford cross-examination rights. In the absence of these, the addition cannot survive.
⚠️ Action Item: Property buyers facing on-money additions based solely on developer statements should collate complete payment documentation and demand cross-examination as a matter of right.
In Dipesh Narendrakumar Patel Vs ITO, ITAT Surat deleted a ₹1,12,320 penalty under Section 270A, holding that where an assessee voluntarily withdraws a deduction in response to a Section 148 notice and the AO accepts the returned income without further addition, there is no "discrepancy" to sustain under-reporting or misreporting charges.
⚠️ Action Item: Where assessees proactively correct their returns post-notice and AOs still levy Section 270A penalties, this ruling provides strong grounds to contest penalty proceedings.
The AO had reopened assessment citing unexplained time deposits (₹10 lakh + interest), but ultimately made additions on LTCG from ancestral land sale — an issue never mentioned in the recorded reasons. ITAT Surat held the entire reassessment void ab initio, following the Gujarat HC in CIT vs. Mohmed Juned Dadani.
⚠️ Action Item: In all reassessment cases, cross-check whether the final additions are actually connected to the reasons recorded in the Section 148 notice. Any deviation is a strong ground for complete challenge.
In Basant Kumar Aggarwal Vs ITO, ITAT Delhi struck down a Section 68 addition where VAT returns, stock records, and purchase registers corroborated the cash balance. A self-contradictory CIT(A) order — acknowledging complete books while sustaining an addition premised on their unreliability — was held unsustainable. Suspicion cannot substitute for evidence.
⚠️ Action Item: Assessees with outstanding demonetisation additions who have strong book-and-documentary support should actively pursue appeals — the judicial tide is consistently in their favour.
In Satish Chandra Vs ITO, involving ₹80.92 lakh demonetisation deposits, ITAT Delhi restricted the Section 69A addition to ₹10 lakh and held Section 115BBE inapplicable for AY 2017-18. Consequently, Section 270A and Section 271AAC(1) penalties were deleted, as the surviving addition rested on estimation rather than proven concealment.
⚠️ Action Item: Demonetisation cases with estimation-based additions should be reviewed for Section 115BBE applicability — challenge the penal rate where the assessment year predates the 2016 amendment's effective date.
In Kiran Agarwal Vs DCIT, ITAT Delhi quashed a Section 153C assessment where the satisfaction note failed to describe the documents found, their contents, or their nexus to the assessee's income. Relying on the Delhi HC's ruling in Saksham Commodities Ltd. (2024) 464 ITR 1, the Tribunal held that a perfunctory satisfaction note does not satisfy the jurisdictional prerequisite under Section 153C.
⚠️ Action Item: Third parties facing Section 153C notices must immediately scrutinise the satisfaction note — if it is vague, generic, or fails to establish document-income nexus, jurisdictional challenge should be the first line of defence.
In DCIT Vs Vinod Gupta, ITAT Delhi upheld the CIT(A)'s order quashing a Section 153C assessment for AY 2014-15, confirming that the six-year block runs from the satisfaction note date. With the satisfaction note disclosing only ~₹3.35 lakh of escaped income — far below the ₹50 lakh mandatory threshold — the extended limitation period was entirely inapplicable.
⚠️ Action Item: In all Section 153C matters, compute the six-year block from the satisfaction note date and verify whether the ₹50 lakh threshold is met before the extended period can be invoked — any shortfall is a complete jurisdictional bar.
In ACIT Vs B R R Securities Pvt. Ltd., ITAT Delhi held that a protective Section 68 addition in the hands of an alleged conduit entity cannot survive once the same income has been substantively assessed in the hands of the real accommodation entry operators. Double taxation of the same income is impermissible, and protective assessments are transitional, not permanent.
⚠️ Action Item: Entities facing protective additions in accommodation entry cases should track the substantive assessment status of the alleged principal operators — confirmation of substantive taxation elsewhere is a complete answer to the protective addition.
🟢 GST
17. Ex Parte GST Order Set Aside by Madras High Court Upon 25% Disputed Tax Deposit Condition
In MGG Trading Private Limited Vs Deputy Commissioner (GST Appeal), the Madras High Court set aside an ex parte GST order passed due to the assessee's unawareness of portal-served notices, conditioning relief on deposit of 25% of disputed tax within 30 days via the electronic cash ledger. ITC account attachment was simultaneously directed to be lifted on compliance.
⚠️ Action Item: GST assessees who have missed portal notices and received ex parte orders should immediately file writ petitions — courts are consistently granting conditional relief to restore the right of hearing, provided partial deposit is made.
In Aboobucker Siddiq Vs Appellate Deputy Commissioner (GST), the Madras High Court held that GST liability cannot be mechanically computed on gross UPI or bank receipts for second-hand goods dealers. Rule 32(5) of the CGST Rules — prescribing margin-based valuation — must be examined and applied wherever its conditions are met, i.e., where no ITC has been availed.
⚠️ Action Item: Second-hand goods dealers receiving GST notices based on bank/UPI credits must assert Rule 32(5) margin-scheme eligibility upfront — gross receipts-based demands are unsustainable without proper valuation analysis.
19. Haryana Leads Nationwide Surge in GST Receipts on Back of Analytics-Driven Enforcement
Haryana recorded 22% State GST growth for May 2026 against a national average of 6%, and 40% cumulative growth for Q1 FY 2026-27 against the national average of 23%. This is attributed to data analytics enforcement, anti-fake-taxpayer drives, and anti-leakage measures. Notably, Haryana has also introduced assessee-friendly initiatives, including physical dispatch of SCNs via registered/speed post.
⚠️ Action Item: Businesses in Haryana and states ramping up analytics-driven enforcement should conduct immediate GST health checks — focus on reconciliation of GSTR-1 vs GSTR-3B, ITC mismatches, and e-way bill data.
🟠 FEMA / RBI
20. RBI Narrows Export Realisation Window To 9 Months Under FEMA 23(R)
The Foreign Exchange Management (Export of Goods and Services) (First Amendment) Regulations, 2026 reduce the export proceeds realisation period under Regulation 9 from 15 months to 9 months, effective from gazette publication date. All standard export transactions must now be repatriated within this compressed timeline, unless a specific FEMA-based exemption applies.
⚠️ Action Item: Exporters must immediately audit all open export bills, renegotiate credit terms with overseas buyers if needed, and strengthen internal monitoring — non-compliance under FEMA can attract serious penal consequences.
Through A.P. (DIR Series) Circular No. 12 dated June 5, 2026, RBI has mandated that AD Category-I banks transition monthly reporting for BO/LO/PO offices (Return Code R343) and NRO account remittances (Return Code R006) to the CIMS portal at sankalan.rbi.org.in from the June 2026 reporting cycle. NIL reports are mandatory for R343 even in months with no BO/LO/PO activity. Physical submission to General Manager offices is formally discontinued.
⚠️ Action Item: AD Category-I banks must immediately onboard to CIMS, train compliance teams, and set up automated NIL-filing workflows for R343 — the first CIMS-compliant submission is due by July 15, 2026 (for June 2026 cycle).
22. UPI–KHQR Link: Seamless QR-Based Payments for Indian Travellers in Cambodia
NPCI International Payments Limited (NIPL) and Acleda Bank Plc. have launched Phase 1 of UPI-KHQR interoperability, enabling Indian travellers to pay over 4.5 million KHQR-enabled merchants in Cambodia using UPI apps in real-time. Phase 2 will extend the reverse corridor for Cambodian travellers in India.
⚠️ Action Item: Financial institutions and fintech players should assess integration opportunities; corporate travel policies may be updated to reflect UPI as an approved payment mode for Cambodia travel.
The MPC held the repo rate at 5.25% with a neutral stance at its June 5, 2026 meeting. While current CPI inflation remains below 4%, the RBI projects it at 5.1% for FY 2026-27, rising toward 5.9% in Q3, driven by global energy prices, supply chain disruptions, and El Niño risks. Real GDP growth for FY 2026-27 is projected at 6.6%.
⚠️ Action Item: Borrowers on floating-rate facilities should re-evaluate hedging strategies for the second half of FY 2026-27 given the inflation projection trajectory; fixed-income portfolios should be assessed for duration risk.
24. RBI Draft Norms on Rupee Bulk Deposit Rates: Greater Bank Flexibility with Stricter Disclosure Rules
RBI's draft "Interest Rate on Deposits Amendment Directions, 2026" propose allowing Small Finance Banks to offer LCR-linked differential rates on bulk deposits for retail vs. wholesale customers. All covered entities must publish deposit interest rate schedules on their websites before the start of each Business Day, and actual rates applied must match the published schedule precisely.
⚠️ Action Item: Banks must align treasury, ALM, IT, and compliance systems for daily advance rate publication. Large depositors should use published rate schedules as their benchmark when negotiating bulk deposit terms.
🔴 Company / Labour Law
25. Four Labour Codes 2025: A Comprehensive Compliance Guide for Chartered Accountants in India
The consolidation of 29 central labour laws into four codes — Code on Wages, Industrial Relations Code, Code on Social Security, and OSH Code — fundamentally restructures the compliance landscape. The uniform wage definition under Section 2(y), the 50% exclusion cap, pro-rata gratuity for fixed-term employees, a 30-day leave carry-forward cap, and mandatory minimum imprisonment under Section 133 of the Social Security Code collectively demand a complete overhaul of CTC structuring and HR policies.
⚠️ Action Item: CAs advising employers must immediately review CTC structures to test Section 2(y) compliance, recalculate gratuity obligations for fixed-term employees, and update leave encashment policies to align with the 30-day cap.
🟣 Customs
Notification No. 50/2026-Customs (N.T.) dated June 5, 2026 appoints the Principal Commissioner/Commissioner of Customs (Import), Air Cargo Complex, Sahar, Mumbai as the Common Adjudicating Authority for all SCNs issued to Hewlett-Packard Enterprise India Pvt. Ltd. across Bengaluru, New Delhi, Mumbai, Chennai, Kolkata, Hyderabad, and Nhava Sheva — all linked to SVB Investigation Report No.18/2024.
⚠️ Action Item: HP Enterprise India must consolidate its legal strategy and all submissions under the Mumbai forum — separate representations to individual customs formations are no longer valid for these SCNs.
Notification No. 51/2026-Customs (N.T.) dated June 5, 2026 appoints the Principal Commissioner/Commissioner, Import Customs Commissionerate (Gr-5A), Chennai as the common adjudicating authority for two SCNs issued to ViewSonic Technologies India Pvt. Ltd. arising from SVB Investigation Report No. GEN/INV/13/2024-SVB.
⚠️ Action Item: ViewSonic Technologies India must direct all future submissions and responses to the Chennai Commissionerate — any pending response filed before the Delhi authority must be re-submitted at the consolidated forum.
Promulgated under Article 240 of the Constitution, the Lakshadweep Excise Regulation, 2026 establishes a complete regulatory regime for liquor in the UT, with an administrative hierarchy under the Excise Commissioner, four revenue heads (duty, licence fee, label registration fee, import/export fee), 12% interest on delayed duty, and a graduated penal framework with imprisonment up to seven years for serious offences.
⚠️ Action Item: Businesses and hospitality operators in Lakshadweep must immediately review licensing requirements, duty payment timelines, and employment compliance (particularly age restrictions) under the new regulation.
🔶 Insolvency (IBC)
29. Standardised IBBI Forms for Corporate Insolvency Resolution: Complete Practical Guide
IBBI Circular No. IBBI/CIRP/94/2026 dated June 2, 2026 prescribes comprehensive standardised forms (Form A to Form GA) under the CIRP Regulations 2016 (as amended by Third Amendment Regulations, 2026), covering public announcements, professional consent, claims filing, EoI, resolution plan approvals, and compliance certification.
⚠️ Action Item: All registered Insolvency Professionals handling active CIRPs must immediately transition to the prescribed forms — non-use of prescribed formats in ongoing proceedings may create procedural infirmities.
Circular No. IBBI/PPIRP/95/2026 dated June 2, 2026 prescribes fourteen standardised forms (Form P1 to Form P14) covering the complete PPIRP lifecycle — from initial consent and creditor listing through public announcement, claims management, resolution plan invitation, compliance certification, and termination or management vesting applications.
⚠️ Action Item: MSMEs considering or undergoing PPIRP proceedings and their IPs must exclusively use Form P1 to P14 — all previously self-drafted formats should be immediately replaced.
31. Standardised IBBI Forms for Streamlined Voluntary Liquidation Under 2017 Regulations
Circular No. IBBI/VL/97/2026 dated June 2, 2026 introduces ten standardised forms (Form A to Form J) under the Voluntary Liquidation Regulations 2017, covering public announcements, creditor and stakeholder claims, unclaimed amount management, compliance certification, and process termination.
⚠️ Action Item: Liquidators managing voluntary liquidation proceedings must audit all pending filings and immediately adopt the prescribed forms for every stage of the process going forward.
Circular No. IBBI/IIRP/98/2026 dated June 2, 2026 prescribes three mandatory forms — Form A (IP consent and eligibility), Form B (creditor claims with security forfeiture election under Section 110), and Form C — for personal guarantor insolvency proceedings. The Section 110 voting share computation transparency is a particularly significant development for creditors.
⚠️ Action Item: Creditors in personal guarantor insolvency proceedings must use Form B exclusively for claims — the security forfeiture election embedded in Form B requires careful legal analysis before submission.
🟡 SEBI / IFSCA
IFSCA's circular dated June 5, 2026 introduces a structured Annual Compliance Audit Report (ACAR) and Annual Compliance Audit Certificate (ACAC) framework for all Capital Market Intermediaries in IFSCs. CMIs must submit by September 30; MIIs must file consolidated reports with IFSCA by November 30. Compliance Auditors must be peer-reviewed professionals, independent from the CMI, with a three-year tenure cap and two-year cooling-off period.
⚠️ Action Item: IFSC-based CMIs must immediately identify and appoint eligible independent Compliance Auditors (given the tenure and independence restrictions) and begin gap assessments to meet the September 30 deadline.
⏰ Key Deadlines & Action Items
| Deadline | Compliance Requirement | Authority | Reference |
|---|---|---|---|
| Within 30 days | Deposit 25% disputed tax via electronic cash ledger to restore hearing rights in ex parte GST orders | GST Portal / High Court | Madras HC — MGG Trading |
| June 2026 Reporting Cycle (by ~July 15, 2026) | First CIMS portal submission for R343 (BO/LO/PO) and R006 (NRO remittances) | AD Category-I Banks → CIMS | RBI Circular No. 12/2026 |
| Immediate | Review all open export bills — realisation window now reduced to 9 months from shipment date | Exporters / AD Banks | FEMA 23(R) Amendment 2026 |
| September 30, 2026 | Annual Compliance Audit Report (ACAR) submission by CMIs to MIIs | IFSC Capital Market Intermediaries | IFSCA Circular, June 5, 2026 |
| November 30, 2026 | Consolidated compliance audit reporting by MIIs to IFSCA | Market Infrastructure Institutions | IFSCA Circular, June 5, 2026 |
| AY 2026-27 Filing Season | Select correct ITR form; compute regime comparison; claim Section 87A rebate under new regime | All individual assessees | IT Act 1961 — AY 2026-27 |
| Immediate | Adopt IBBI standardised forms for all active CIRP, PPIRP, VL, and PG insolvency proceedings | Insolvency Professionals | IBBI Circulars 94-98/2026 |
| Immediate | Review CTC structures for compliance with Section 2(y) wage definition and 50% exclusion cap | Employers / HR/Finance teams | Four Labour Codes 2025 |
💡 Professional Takeaways
1. Reassessment Jurisdiction Is Under Intense Judicial Scrutiny — Equip Yourself Accordingly
This edition carries no fewer than five significant ITAT rulings systematically dismantling improper reassessment proceedings — on grounds of borrowed satisfaction (Anoop Jain HUF), additions beyond recorded reasons (Ichchaben Kantilal Desai), defective satisfaction notes under Section 153C (Kiran Agarwal), time-barred Section 153C assessments (Vinod Gupta), and impermissible protective additions (B R R Securities). The consistent judicial message is unequivocal: reassessment is a jurisdiction that must be earned through proper procedure, not assumed. Tax professionals should build a standard pre-response checklist for every reopening notice — examining the sufficiency of reasons, the limitation period computation, the satisfaction note quality, and the independence of the AO's application of mind — before engaging on merits.
2. The FEMA Compliance Clock Is Now Ticking Faster — Export Finance Strategies Need Urgent Recalibration
The reduction of the export realisation window from 15 months to 9 months is not a minor regulatory tweak — it is a structural change that invalidates a significant portion of existing export credit and receivables management practices. Businesses that have built their cash flow models around the 15-month window — particularly exporters dealing with capital goods, project exports, or long-credit buyers in developing markets — face immediate exposure. Tax and finance professionals advising export-oriented clients must simultaneously address contract law (amendment of credit terms), banking (coordination with AD banks on monitoring systems), accounting (accelerated provisioning for outstanding debtors), and FEMA (proactive RBI extension applications where genuine hardship exists). Waiting for the first default to occur before acting is not an option under FEMA's strict liability framework.
3. The IBBI Standardisation Revolution Demands Immediate Operational Overhaul — Not Gradual Transition
The simultaneous issuance of four IBBI circulars prescribing standardised forms across CIRP, PPIRP, Voluntary Liquidation, and Personal Guarantor proceedings is unprecedented in its scope and signals the Board's clear intent to bring procedural discipline to every corner of insolvency practice. For practising insolvency professionals, the operational implication is immediate — there is no transition grace period explicitly provided. Forms already filed using non-standard formats may be questioned by adjudicating authorities, and creditor claims submitted in non-prescribed formats risk rejection. Insolvency professionals should: (a) audit all pending filings across active matters, (b) replace existing draft templates with prescribed forms, (c) brief clients and creditors on the new claim submission formats particularly noting the Section 110 security forfeiture election in Personal Guarantor proceedings, and (d) update their internal practice management systems immediately.
© 2026 TaxCorp India | All content on this digest is sourced from TaxCorp's original research and analysis. This digest is prepared for informational purposes only and does not constitute legal or professional advice. Readers are advised to consult qualified professionals before acting on any information contained herein.
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