Income tax deduction from salaries: revised withholding, reporting and valuation rules including Agniveer and perquisite changes.
The Circular updates withholding and reporting for salary payments in FY 2024 25: it broadens the definition of salary and perquisites to include Central Government contributions to the Agniveer Corpus Fund and specified accommodation benefits, revises perquisite valuation and remote area rules, raises the leave encashment exemption ceiling for non government employees, introduces a deduction for Agniveer Corpus Fund contributions, sets out revised surcharge and new regime tax rates and computation restrictions, formalises employee disclosure for other income to be considered for withholding, amends Form No.16 and 24Q, and clarifies enhanced penalty and prosecution consequences for TDS defaults.

Extension of filing deadline for Form 56F extended to end of March to ease compliance for accountant reports.
Extension granted for filing the Form No. 56F accountant's report, moving the deadline previously linked to the audit filing date to the end of March to relieve documented taxpayer hardship and align the report submission with the revised compliance timeline under the Income-tax Act. The Central Board exercised its administrative powers to provide this relief, which applies specifically to the accountant's report required under the provisions for specified tax benefits, without altering substantive statutory requirements.

Personal income-tax reforms broaden the new regime, expand IFSC incentives, and rationalise compliance rules across deductions, reporting, and penalties.
Personal income-tax reforms introduce a revised default new tax regime with concessional slabs, enhanced rebate up to specified income levels, standard deduction for salaried taxpayers, and marginal relief for resident individuals whose income is only marginally above the rebate threshold. The reforms also retain the distinction between rebate and marginal relief, exclude special-rate income such as capital gains and lottery winnings from rebate, and provide examples showing nil tax at the specified income level under the new regime. Separate amendments expand IFSC incentives, broaden the relocation regime to include retail schemes and ETFs, and rationalise business, investment, and compliance provisions.

Information sharing for beneficiary identification: designated tax systems authority to flag threshold-income status based on PAN/Aadhaar linkage.
The Director General of Income-tax (Systems), New Delhi is designated to furnish income-tax information to the notified DFPD official for PMGKAY. DFPD will supply Aadhaar numbers or PANs with Assessment Years; DGIT (Systems) will return a threshold-income flag "Yes/No/Not Available" if PAN is provided or Aadhaar is linked to PAN, and will report inability to provide information where Aadhaar lacks PAN linkage. DGIT (Systems) will decide frequency and mode with the requesting department and must enter an MoU covering data transfer, confidentiality, secure preservation, weeding out, and timelines, with a copy of the MoU sent to the division.

Orders under section 201 not treated as assessment orders; appeals to be decided under the e Appeals Scheme.
Orders under section 201 are not to be regarded as assessment orders for the exceptions to the e-Appeals Scheme, 2023; appeals against such orders shall be decided by the Joint Commissioner (Appeals) under the e Appeals Scheme, 2023.

Principal Purpose Test restricts treaty benefits where obtaining benefit was a principal purpose, subject to object and purpose exception.
The guidance explains that the Principal Purpose Test permits denial of treaty benefits where, on an objective assessment of all relevant facts, obtaining the benefit was one of the principal purposes of an arrangement, unless it is established that granting the benefit accords with the object and purpose of the relevant treaty provision; it instructs that the PPT is to be applied prospectively, specifies interaction rules for bilateral incorporations and MLI incorporation timing, and excludes certain treaty-specific grandfathering provisions from the PPT while endorsing a context-specific, fact-based assessment with reference to BEPS Action 6 and the UN Model Commentary as supplementary guidance.