Computation of book profit: phase retained earnings transition adjustments over three years to reduce one time MAT impact.
Computation of book profit for MAT on Ind AS adoption: retained earnings adjustments on transition for PPE and intangibles should be ignored for book profit and excluded from depreciation and disposal gain/loss calculations; lease equalization and fair value P&L transition adjustments should be included in book profit phased over three years from the year of adoption to mitigate one time impact; other unrealised gains/losses adjusted to retained earnings on transition should be similarly phased.

Linking of non-PAN AIR transactions requires online TSN confirmation to link transactions to PAN; nonresponse may trigger tax proceedings.
The SOP requires identification of non PAN AIR high risk transaction clusters with unique Transaction Sequence Numbers and priority ratings P1-P3, dissemination of mapped data to Pr.CIT offices, and issuance of standardised letters. Transacting parties must use the e filing portal, locate transactions by TSN, confirm ownership to link the transaction to their PAN and submit an electronic response; P1 letters are sent centrally, P2/P3 by Pr.CITs. Failure to respond within 15 days may lead to proceedings under the Income Tax Act, and helpline support and dedicated campaign emails are provided.

Direct Tax Dispute Resolution Scheme offers time bound settlement of pending appeals with specified tax, interest and penalty concessions.
The Direct Tax Dispute Resolution Scheme provides a time bound mechanism to settle pending CIT(A) appeals by offering defined tax, interest and penalty concessions and immunity from prosecution. Designated Authorities must identify eligible appeals, notify appellants, and process declarations through prescribed forms: obtain CIT(A) endorsement of pendency, issue a Certificate of amount payable, record payments, and pass final orders within the Scheme's timelines; unprocessed cases must be recorded with reasons and consolidated data submitted to higher authorities.

Relaxation of Section 245 adjustment for small refunds enables faster refund processing and issuance after deemed no-objection.
Assessing Officers are directed to issue refunds in eligible non-CASS cases without adjusting outstanding demands under Section 245 where refunds or arrear demands fall within the small-amount threshold, and to treat taxpayer non-response to adjustment notices after 60 days as "no-objection" so that returns may be processed and balance refunds issued after adjustment with applicable interest; compliance report to be submitted to the Board by the stated deadline.

Limited scrutiny conversion requires a reasonable view supported by credible material before expanding enquiry to complete scrutiny.
The AO may convert a case from Limited Scrutiny to Complete Scrutiny only after forming a reasonable view, supported by credible material with a direct nexus to the issue, that underassessment is possible; conversion remains subject to existing monetary thresholds and administrative approval. Initial enquiries are confined to limited-scrutiny issues until proper conversion and taxpayer intimation; once converted the AO may examine additional issues and should use review mechanisms and the summary assessment provision to prevent fishing and roving enquiries.

Income Declaration Scheme compliance: revised declarations allowed but undisclosed payments must be declared to secure immunity.
Declarants may revise declarations before the Scheme closes provided revised undisclosed income is not less than earlier declared. The Scheme prevails over earlier reopening timelines. Declarations alone will not trigger CASS selection. Benami transfers regularising title where the beneficial owner paid consideration and declared fair market value do not attract capital gains or tax at source in the benamidar's hands. Confidentiality protections bar disclosure of valid declarations. Payments from undisclosed income must be declared to secure immunity. Form 3 timing equals payment deadline. Immunity extends to directors and partners. Quoted share valuation uses the exchange with highest trading volume.

Manual selection for scrutiny: mandatory case categories defined and e mail based paperless assessment extended in metros.
Manual selection mandates compulsory scrutiny of returns showing substantial recurring additions finalized or confirmed on appeal, survey cases where impounded books alter returned income, search and seizure assessments and returns filed after reopening, claims to exemption despite denial or cancellation of registration, entities claiming research or educational deductions, and cases with verifiable government intelligence of evasion subject to administrative approval. CASS 2016 operates in parallel, and e mail based paperless assessment is extended to specified metros with opt out and limited physical submission exceptions.

Assessment notice formats revised under section 143(2): three standardized templates and email-based communication option introduced.
CBDT has mandated three standardized templates for notices under section 143(2)-Limited Scrutiny, Complete Scrutiny and Manual Scrutiny-each providing an opportunity to produce evidence or submit communications, reserving issuance of specific questionnaires for adverse views. The circular directs use of these revised formats, updates to the ITD module, and offers an opt-in email-based assessment procedure using the return's email with option to nominate an alternate or opt out.

TDS exemption on interest paid by IFSC Banking Units confirmed; no tax deduction on qualifying non-resident deposits or borrowings.
IBUs established in IFSCs are treated as Offshore Banking Units; accordingly, tax need not be deducted at source on interest paid by such IBUs on deposits made on or after 1 April 2005 by non-residents or persons not ordinarily resident in India, and on borrowings from such persons made on or after that date, and such interest is excluded from total income under the corresponding exemption for interest paid by offshore banking units.

Tax Declaration Scheme enables regularisation of undisclosed income with prescribed levy and limited statutory immunity.
The Income Declaration Scheme, 2016 permits taxpayers to declare past undisclosed income and regularise it by paying the prescribed tax, surcharge and penalty; TDS credit is allowed if not earlier claimed. Declarations will not be shared with other agencies and will not trigger departmental investigation where valid. Immunity is available only under the Income-tax Act, Wealth-tax Act and, subject to transfer by a specified date, the Benami Transactions (Prohibition) Act. Fair market value for immovable property is the higher of acquisition cost and open-market price as on 1 June 2016; declared rents must be reported where property was let.

Full payment requirement under Income Declaration Scheme: declarations valid only if tax, surcharge and penalty are timely paid and compliant.
Declarations under the Income Declaration Scheme, 2016 are valid only when full payment of tax, surcharge and penalty on the undisclosed income is made by the specified date; part payment invalidates the entire declaration. The Scheme applies to residents and non residents but excludes persons with pending Settlement Commission proceedings or for assessment years where specified assessment notices were issued by the cut off; notices issued after the cut off may be closed if a valid declaration is paid and Form 4 is furnished. PAN is mandatory; valuation reports must be obtained though not necessarily attached to Form 1.

Tax collection at source on cash sales applies only when cash received exceeds the statutory threshold; only cash amounts are collectible.
Tax collection at source is triggered only when the cash component of a sale exceeds the statutory threshold. The seller must collect TCS only on the cash portion; where cash received is below the threshold no TCS is collectible even if total consideration exceeds the threshold, and where cash exceeds the threshold TCS applies solely to that cash amount.

Due diligence timelines under rule amendment extended for certain pre-existing reportable accounts, with U.S. accounts retaining earlier review deadlines.
The amendment extends the review deadline for pre-existing high-value individual reportable accounts and certain pre-existing entity reportable accounts from the earlier June cutoff to a later year-end date for non-U.S. reportable accounts, while preserving the earlier June deadline for U.S. reportable accounts; substantive due-diligence standards and account classification remain unchanged.

Presumptive taxation threshold expands audit exemption for eligible taxpayers who opt into the presumptive scheme.
A person carrying on business must obtain an audit when total sales, turnover or gross receipts exceed the general audit ceiling, but an eligible assessee who opts for the presumptive taxation scheme benefits from a higher non audit ceiling and is not required to have accounts audited while receipts remain within that elevated threshold; the higher ceiling applies only to those who elect the presumptive regime and does not affect taxpayers who do not opt in.

India-Mauritius DTAA review group to examine consequences of recent amendments and recommend administrative and regulatory responses.
A Joint Secretary led Working Group has been constituted to examine consequential issues from amendments to the India-Mauritius Double Taxation Avoidance Convention, comprising departmental officers and representatives of securities market stakeholders, tasked with analysing operational and regulatory implications and submitting recommendations to the tax administration within a short-term reporting period.

Tax collection at source on high-value motor vehicle sales requires seller to collect tax on each retail sale exceeding the statutory threshold.
Amendments expand tax collection at source to require sellers to collect tax on cash sales of goods or provision of services above the cash-threshold (excluding bullion and jewellery) and on retail sales of motor vehicles above the motor-vehicle threshold. Sellers liable include governments, statutory bodies, companies, firms, cooperatives and audit-liable individuals; covered international organizations and diplomatic missions are excluded. The motor-vehicle provision applies per qualifying sale, irrespective of payment mode, and governs collection on the total consideration without cumulative application with the cash-sale rule.

Designated authority under Direct Tax Dispute Resolution Scheme assigns jurisdictional commissioners to act as authority for taxpayer declarations.
The Scheme allows a declarant to resolve appeals pending before Commissioners of Income Tax (Appeals) concerning disputed tax and specified tax. Principal Chief Commissioners must notify the designated authority, namely the jurisdictional Principal Commissioner or Commissioner of Income Tax exercising statutory jurisdiction over the declarant; notifications must include all Principal Commissioners and Commissioners for TDS and Exemptions in the region and compliance reported to the Board.

Bad debt deduction writing off in books suffices for tax deductibility; withdraw appeals contesting irrecoverability.
A claim for deduction of a bad debt is admissible if the debt or part thereof is written off as irrecoverable in the assessee's books of account for the relevant year and it fulfils the conditions stipulated in the governing statutory provision; accordingly, no appeals should be filed on the ground that irrecoverability was not independently established, and pending appeals on that issue may be withdrawn.

FATCA and CRS implementation clarified: further guidance issued and posted for financial institutions by government on official website
Clarification issued concerning implementation of FATCA and CRS for Indian financial institutions: India signed an Inter Governmental Agreement with the United States for FATCA and joined the Multilateral Competent Authority Agreement for Automatic Exchange of Information under the CRS. A Guidance Note (31 Aug 2015, updated 31 Dec 2015) and prior clarifications (19 Feb 2016) were supplemented by a further clarification dated 26 May 2016, published on the Income tax Department website to guide identification, reporting and due diligence obligations of reporting financial institutions.

Charitable purpose registration: exceeding commercial receipts threshold denies exemption for the year but cancellation not mandatory.
Where receipts from commercial activities exceed the proviso threshold in a particular year, the institution's income is not exempt for that year, but temporary excess alone does not mandate cancellation of registration if there is no change in the nature of activities; cancellation must follow statutory grounds and procedures, and unjustified cancellation may attract tax on accreted income under Chapter XII EB.