Financial And Tax Consultants

28/05/2026

The 40% US Estate Tax Trap for Indian Investors

Indian residents are increasingly investing in US markets through direct holdings in US listed shares, ETFs, mutual funds, and real estate. However, a significant and often overlooked risk attached to such investments is the US estate tax.

Estate Tax:
Under US law, a non-resident alien (NRA) — i.e., a person who is neither a US citizen nor domiciled in the United States — is subject to estate tax on “US-situated assets” upon death. The tax rate can go as high as 40%.

US-situated assets generally include:
Shares of US companies
US domiciled ETFs and mutual funds
Real estate located in the US
Certain brokerage and investment accounts

Exemption:
For US citizens and domiciliaries, the estate tax exemption currently stands at approximately USD 13.61 million. However, for NRAs, the exemption is restricted to a mere USD 60,000.

Wrong assumptions:
Many investors assume that estate tax applies only to US citizens or residents. That is not correct. Even foreign nationals holding US assets may fall within the scope of the US estate tax regime.

Further, India presently does not have an estate tax treaty with the United States that grants meaningful relief in such situations.

Consequently, several investors explore alternative structures to mitigate US estate tax exposure, including:
Offshore holding structures
Trust arrangements
Diversification into non-US situs assets
However, such planning must be undertaken carefully after evaluating Indian tax implications, FEMA regulations, succession laws, reporting obligations, and anti-avoidance considerations.

11/04/2026

DIN Mandatory for Income-tax Communications: CBDT Tightens Traceability Framework

Background
The Central Board of Direct Taxes (CBDT), through Circular No. 4/2026 dated 1 March 2026, has reinforced the mandatory requirement of quoting a Document Identification Number (DIN) in all communications issued by income-tax authorities.

This builds upon the earlier framework introduced via Circular No. 19/2019 to enhance transparency, accountability, and audit trail in tax administration.

Core Mandate
Every communication issued by any income-tax authority must:
Mandatorily bear a DIN, and
Be generated through the Income-tax Business Application (ITBA) system.
Any communication issued without a DIN shall be treated as invalid and deemed never issued, unless it falls under specified exceptions.

Limited Exceptions (Manual Communications)
Manual issuance without DIN is permitted only in exceptional situations, including:
Technical/System Constraints
Where ITBA is not operational or accessible.
Urgency/Public Interest
Where access to electronic means for generation or quoting of DIN is not possible
Non-ITBA Communications
Where functionality is not available in the system.
PAN Migration Cases
Where PAN is not available or is under migration.

Safeguards for Manual Communications
Where communication is issued manually:
It must record reasons in writing.
Prior approval of prescribed authority is mandatory.
The communication must clearly state that it is issued without DIN under exceptional circumstances.

Post-Facto Compliance
A DIN must be generated within 15 working days for such manual communications.
The communication must then be regularized and linked in the system.

Consequences of Non-Compliance
Any communication not bearing DIN (and not covered by exceptions) is invalid, and legally non est (deemed never issued).

Key Clarifications
Even internal approvals and correspondence must adhere to DIN discipline where applicable.
The objective is to eliminate informal/unauthorized communication channels.

10/04/2026

Rule 237, Income-tax Rules, 2026 – Reporting of Gifts of Immovable Property

The Income-tax Rules, 2026 introduce a significant expansion in the Statement of Financial Transactions (SFT) framework through Rule 237, by expressly bringing gifts of immovable property within the reporting net. This marks a clear shift towards comprehensive tracking of high-value transactions, including those undertaken without consideration.

Legal Framework
Rule 237 mandates specified reporting entities to furnish details of prescribed transactions in the SFT. While the framework broadly corresponds to the earlier reporting regime, a key addition is the inclusion of transactions involving receipt of immovable property without consideration.

Transaction Now Covered
The rule specifically covers:
a. Receipt of immovable property by way of gift
b. Where no consideration is paid
c. And the stamp duty value is ₹45 lakh or more
This brings within scope transactions that were previously outside the structured reporting mechanism.

Reporting Authority
The obligation to report such transactions is cast upon Registrar / Sub-Registrar or Authority responsible for registration of immovable property.

Practical implication:
Taxpayers and advisors must be mindful that, high-value property gifts can no longer remain under the radar. Proper documentation of relationship and intent becomes critical.

CA Nitin Kapoor

15/11/2025

RBI to allow loan against silver jewellery from April 2026:

1. The Reserve Bank of India (RBI) has announced new rules under the “Reserve Bank of India (Lending Against Gold and Silver Collateral) Directions, 2025”, effective from April 1, 2026.

2. These new norms officially allow people to take loans against silver ornaments and coins, not just gold, with strict limits on the weight and value that can be pledged.

3. Silver ornaments up to 10 kilograms and silver coins up to 500 gramscan be used as collateral. The loan-to-value (LTV) ratio will range from 85% to 75%, depending on the loan size.

4. However, loans can’t be given against silver bullion (like bars or bricks) or financial assets backed by silver, such as mutual fund or exchange-traded fund (ETF) units. The RBI has made this restriction due to macro-prudential concerns to prevent financial instability.

5. The value of silver will be determined as the lower of:
The average closing price of silver of the same purity over the last 30 days, or
The closing price of silver of that purity on the previous day.

6. These rates will be based on data published by the India Bullion and Jewellers Association (IBJA) or a commodity exchange regulated by the Securities and Exchange Board of India (SEBI).

10/10/2025

TDS on salary under the New Income Tax Act, 2025:

Effective from April 1, 2026, the TDS on salary will be governed by the New Income Tax Act, 2025, which simplifies and consolidates existing provisions.

Key provisions for TDS on salary
1. TDS on salary: Section 392. This section details the rules for deducting tax on salaries, which is a consolidation of the previous Section 192 of the Income Tax Act, 1961.

2. Deduction based on average rate: The employer is mandated to deduct tax at source based on the average rate of income tax for the tax year.

This is calculated by dividing the employee's total estimated tax liability for the year by their estimated total annual income
This average rate ensures a smooth, monthly deduction instead of a large, one-time payment.

3. Employee's choice of tax regime: The average rate will be calculated based on the tax regime (new or old) that the employee has chosen.

New Tax Regime: The default option, with lower tax rates but fewer deductions.

Old Tax Regime: The optional choice, which allows for various deductions and exemptions.

4. Employee declaration of income: To ensure an accurate TDS calculation, employees can provide their employer with details of other income or losses from house property. The employer then adjusts the TDS accordingly.

5. Documentation for tax deduction: The law requires the employer to furnish a certificate to the employee, detailing the tax that has been deducted and other particulars, as prescribed by the tax authorities.

Conclusion:
1. The transition from the Income Tax Act, 1961 to the Income Tax Act, 2025 marks continuity with simplification.

2. While the core principle of TDS on salary — deduction at source on estimated annual income at applicable slab rates — remains unchanged, the new Act introduces a streamlined structure and simpler terminology,

TaxByte by CA Aniket Kulkarni

20/09/2025

09/09/2025

*CBDT’s TRACES notification on TDS returns activates Income-tax Act, 2025*
Income-tax Department has updated its TRACES website, displaying a 'Caution' Note to the effect that corrective statements ( for Q4 of FY 2018-19 and all quarters of FY 2019-20 to FY 22-23, and first three quarters of FY 23-24 ) shall be accepted only upto 31.03. 2026; Caution Note goes on to state that all these quarters would be time-barred on 31.03.2026 in view of Section 397 (3)(f) of Income-tax Act, 2025:

The Income Tax Act 1961 stands repealed w.e.f 01.04.2026 by virtue of section 536 of Income Tax Act 2025.

Further, as per section 397(3)(f) of Income Tax Act, 2025, deductor/collector may deliver a correction statement in such form and verified in such manner as may be prescribed, to the prescribed authority within two years from the end of the tax year in which such statement is required to be delivered under the said clauses or under section 200 of the Income-tax Act, 1961.

Consequent to the above, correction statements for FY 2018-19 (Qtr. 4), FY 2019-20 to 2022-23 (Qtr. 1 to Qtr. 4) and FY 2023-24 (Qtr. 1 to Qtr. 3) shall be accepted only up-to 31st March 2026. The same are time barred by limitation on 31.03.2026 and would not be accepted from 01.04.2026 onwards.

Deductors /Collectors and other Stakeholders may kindly take note of the same and they are advised to take necessary steps to ensure all corrections for the above period, if any, are carried out in time as filing of the same for above period would be barred by limitation on 31.03.2026.

05/08/2025

India is rolling out PAN 2.0: A unified, biometric-backed Tax Identity System

What’s new?
The income tax department has selected mid-sized information technology firm LTIMindtree Ltd for its project to upgrade technology infrastructure for managing Permanent Account Numbers (PANs).

Background:
PAN, a ten-digit alphanumeric number, is needed for filing tax returns, opening bank accounts, making high-value cash deposits, and buying stocks, property, and four-wheelers.

Why the upgradation?
The effort is to streamline and modernize the process of issuing and managing PAN and TAN—another alphanumeric number needed for the purpose of tax deduction or collection at source.

What is expected in PAN 2.0?
1. This upgradation project will comprehensively handle all matters related to PAN and TAN, including allotment, updates/corrections, Aadhaar-PAN linking, re-issuance requests, online PAN validation, etc., as a one-stop platform.

2. The system will feature a PAN Data Vault, integrated backend systems, and enhanced QR code features to prevent fraud and streamline updates.

3. The government said in 2024 that this project would help optimize costs, ensure security, and facilitate operations. The e-governance project seeks to enhance taxpayers' digital experience by upgrading the current PAN-TAN ecosystem.

4. Finance minister Nirmala Sitharaman said in her February 2023 budget speech that for the business establishments with a PAN number, it would be used as the common identifier for all digital systems of specified government agencies.

5. Free e‑PAN would be issued by email. Also it is expected to foster processing, have a robust grievance redressal mechanisms, and increased integration with GST, MCA, and other regulatory databases.

14/07/2025

💼 MILESTONE FOR CA FRATERNITY 💼

🚨 Legal Update – GST Refund & Documentary Evidence

In a landmark ruling (26 March 2025), the Gujarat High Court in Kuehne + Nagel Pvt. Ltd. v. Union of India [2025 (6) TMI 1841] has held that:

✅ A Chartered Accountant’s certificate confirming receipt of convertible foreign exchange is a valid substitute for FIRC.
✅ Refund rejection only due to missing FIRC is unjustified if substantial compliance is evident.
✅ Refund must be processed within 12 weeks, putting substance over form.

🔹 This judgment is a major recognition of the CA profession — Courts now acknowledging CA certifications as credible evidence in tax matters.