Income-tax Act 2025 Practitioner Certification

Chapters I through V of the new Act cover the basis of charge, residential status, and computation of income under the five heads. Sections 5 to 7 govern residence and scope (Resident and Ordinarily Resident, Resident but Not Ordinarily Resident, Non-Resident); Section 6 tests for individuals (day-count), HUFs (control and management), companies (Place of Effective Management), firms (control and management). Salaries chapter carries forward HRA computation with the Finance Act 2026 expansion of the 50 percent cities list (adding Bengaluru / Hyderabad / Ahmedabad / Pune to the metros Mumbai / Delhi / Chennai / Kolkata).

House property annual value determination. Business and profession income including Sections 28 to 45 equivalents, presumptive taxation (44AD / 44ADA / 44AE), Section 44AA books of account requirement, and Section 44AB tax audit trigger (Rs 1 crore business turnover, Rs 50 lakh professional receipts, Rs 10 crore turnover for 95 percent-digital taxpayers). This module walks each head with the transition mapping to 1961-Act sections.

1. 1. Scope of total income and residential status under Sections 5-7 10 min
2. 2. Salaries computation with expanded HRA 50 percent cities (Finance Act 2026) 10 min
3. 3. House property annual value and deductions 9 min
4. 4. Business and profession income Part 1: computation, deductions, disallowances 11 min
5. 5. Business and profession income Part 2: presumptive taxation Sections 44AD, 44ADA, 44AE 9 min

The capital gains regime is reorganised across dedicated clauses of the new Act. Clause 67 defines what constitutes capital gains (mapped from Section 45 of the 1961 Act). Clauses 196 through 198 split the tax treatment across short-term equity (Clause 196), long-term non-equity (Clause 197), and long-term equity (Clause 198).

Rates and holding periods carry forward from the amended 1961 Act regime (STCG equity 20 percent post July 2024, LTCG non-equity 12.5 percent without indexation, LTCG equity 12.5 percent above Rs 1.25 lakh). Two substantive changes under Finance Act 2026: buyback proceeds now taxable as capital gains in the hands of the shareholder (shift from the company-side buyback tax regime under old Section 115QA); Sovereign Gold Bond capital-gains exemption on redemption narrowed to only primary-issuance subscribers (secondary-market buyers now taxable). This module walks each clause and change with practical worked examples using publicly reported buyback transactions and SGB portfolio situations.

1. 1. Clause 67 capital gains definition and scope 9 min
2. 2. STCG vs LTCG and Clauses 196-198 tax treatment split 9 min
3. 3. Finance Act 2026 buyback shift: shareholder capital gains regime 9 min
4. 4. Finance Act 2026 SGB change: primary issuance retains exemption, secondary market taxable 8 min
5. 5. Slump sale, business transfer, amalgamations and demergers 9 min

Chapters VII and VIII of the new Act cover deductions, exemptions, and the loss set-off and carry-forward framework. Chapter VI-A deductions (80C, 80D, 80G equivalents) with re-mapped section numbers. Exemptions and allowances including HRA (with Finance Act 2026 expansion of 50 percent cities), LTA, medical, transport, meal, standard deduction, and new special allowances under Rules 2026.

New vs Old Regime 2026 decision framework post the Finance Act 2026 amendments. Set-off of losses under Sections 71 to 74A equivalents (intra-head first, inter-head second, speculation losses ring-fenced, capital losses split treatment). Carry forward under Sections 72 to 79 equivalents: business losses 8 years, unabsorbed depreciation unlimited, speculation 4 years, STCL 8 years against STCG or LTCG, LTCL 8 years only against LTCG.

Continuity-of-shareholding test under Section 79 equivalent for closely-held companies (change in beneficial holding of more than 49 percent lapses losses).

1. 1. Chapter VI-A deductions under the new Act 10 min
2. 2. Exemptions and allowances under Rules 2026 (including HRA expansion) 8 min
3. 3. New vs old regime FY 2026-27 decision framework 9 min
4. 4. Set-off of losses within and across heads (Sections 71-74A equivalents) 8 min
5. 5. Carry-forward of unabsorbed losses and the Section 79 shareholding continuity test 8 min

Section 393 is the single most consequential structural change of the new Act. Consolidates all TDS provisions from 60+ separate sections of the 1961 Act (Sections 192 to 194T) into a single Section 393 with three structured tables: Table A prescribes TDS on payments to residents, Table B on payments to non-residents, Table C on payments to any person. Each row: payment type, threshold, rate, TAN / PAN requirement.

Rates and thresholds largely unchanged from the old regime; only the section reference changes. Salary TDS lives separately in Section 392 (mapped from Section 192). Four substantive changes: uniform threshold on TDS on all interest on securities; removal of co-operative bank TDS exemption; inclusion of advertising within professional services; expanded rent definition to include factory buildings and appurtenant land.

Section 394 consolidates TCS from Section 206C of the old Act, with Finance Act 2026 rate reductions (LRS education / medical from 5 percent to 2 percent, overseas tour packages from up to 20 percent to 2 percent).

1. 1. Section 393 TDS consolidation: the three-table structure 10 min
2. 2. Section 392 salary TDS: computation, regime choice, Form 24Q, Form 16 8 min
3. 3. Four substantive TDS changes under the new Act 9 min
4. 4. Section 394 TCS with Finance Act 2026 rate rationalisation 8 min
5. 5. TDS / TCS compliance runbook: monthly deposit, quarterly returns, Form 16 issuance 8 min

Chapter XIII of the new Act governs assessment, reassessment, and appeals. Faceless assessment continues under the new Act via the National Faceless Assessment Centre (NFAC), successor to Section 144B of the old Act. Section 143 equivalent governs return processing (automated intimation within 9 months of tax year end) and scrutiny (Notice under Section 143(2) within 3 months, order within 12 months, 18 months for transfer pricing).

CBDT Compulsory Complete Scrutiny Guidelines for FY 2026-27 (F.No.225/56/2026/ITA-II dated 4 June 2026) prescribe compulsory selection categories. Reassessment under Sections 147 / 148 / 148A equivalents with time limits (3 years for income escapement below Rs 50 lakh, 10 years for escapement above Rs 50 lakh with specified evidence). Finance Act 2026 added a specific 3-month timeline for reassessment notices to give effect to court findings, measured from end of quarter of order receipt.

Appeals progression: Commissioner (Appeals) within 30 days of assessment order, then ITAT, High Court, Supreme Court. Dispute Resolution Panel (DRP) for transfer pricing and non-residents. Vivad se Vishwas legacy carry-forward under Section 536(2)(c).

1. 1. Faceless assessment continuation under the new Act 9 min
2. 2. Regular assessment, scrutiny selection, and CBDT Guidelines 4 June 2026 9 min
3. 3. Reassessment under the new Act with Finance Act 2026 procedural change 9 min
4. 4. Appeals: CIT(A), ITAT, HC, SC and alternative dispute resolution 8 min
5. 5. Assessment defence playbook: response templates for Section 143(2) and 148 notices 8 min

Non-resident taxation continues under the new Act with the same structure as the 1961 Act. Chargeability under Section 9 equivalents (business connection, place of effective management, deemed to accrue or arise in India). Withholding on payments to non-residents under Section 393 Table B (with rates and thresholds tied to the applicable DTAA).

India has DTAA network with 90+ countries. Post-MLI (Multilateral Instrument), most Indian DTAAs embed the Principal Purpose Test (PPT) that can deny treaty benefits where obtaining the benefit was one of the principal purposes of the arrangement. The Supreme Court judgment in Tiger Global International Holdings v Union of India (2026 INSC 60) dated 15 January 2026 upheld rejection of an advance ruling for a Mauritius fund seeking treaty exemption on indirect transfer of Indian shares via Singapore, applying treaty-abuse doctrine.

Transfer pricing framework carries forward under Section 536 with arm-length methods (CUP, RPM, CPM, PSM, TNMM), documentation and Country-by-Country Reporting. Advance Pricing Agreement (APA) framework with Finance Act 2026 3-month post-APA return-filing window.

1. 1. Non-resident taxation under the new Act (Sections 5, 9, 393 Table B) 9 min
2. 2. DTAA network, treaty application, MLI Principal Purpose Test 9 min
3. 3. Tiger Global 2026 INSC 60: SC on treaty abuse in indirect transfer 9 min
4. 4. Transfer pricing framework under the new Act 9 min
5. 5. Advance Pricing Agreements + Form 15CA/15CB with Finance Act 2026 3-month return window 8 min

Closing module on compliance operations for a working CA or CFO office. Rules 2026 prescribe seven ITR forms: ITR-1 (Sahaj, salaried up to Rs 50 lakh with one house property), ITR-2 (individuals and HUFs without business income), ITR-3 (individuals and HUFs with business income), ITR-4 (Sugam, presumptive under 44AD / 44ADA / 44AE), ITR-5 (firms, LLPs, AOPs, BOIs), ITR-6 (companies), ITR-7 (trusts and specified persons). Tax audit report under Section 44AB equivalent uses Form 3CA (for auditor-approved accounts) or Form 3CB (for others) with Form 3CD detailed particulars (44 clauses).

FY 2026-27 compliance calendar: advance tax instalments 15 June, 15 September, 15 December, 15 March; ITR salaried 31 July (extended to 31 August 2026); audit ITR 31 October; transfer pricing ITR 30 November; belated ITR 31 December. PAN quoting threshold changes under Rules 2026; PAN-Aadhaar linkage requirement. All 12 templates walkthrough and course completion certificate.

1. 1. ITR-1 through ITR-7 under Rules 2026 9 min
2. 2. Tax audit under Section 44AB and Form 3CA / 3CB / 3CD 8 min
3. 3. Advance tax and FY 2026-27 compliance calendar 8 min
4. 4. PAN quoting threshold and PAN-Aadhaar linkage under Rules 2026 7 min
5. 5. Templates handoff and course completion 9 min