For FY 2025-26, the old Act applies. The new Act does not affect ITRs filed for FY 2025-26. It applies only from FY 2026-27. New Income Tax Act 2025 merges old Sections 44AD, 44ADA & 44AE into a single Section 58 (Presumptive Taxation Scheme). Key features are nearly the same. Most small genuine low-margin businesses/professionals… (read more)

As the flat is held for over 24 months, it qualifies as a long-term capital asset. The redevelopment cost can be claimed as cost of acquisition/improvement and indexed appropriately (using the CII for FY 2023-24). As you acquired the property before 23.07.2024, you have the choice of paying either 12.5% of the gain without indexation… (read more)

U/s 45(5A), the capital gain due to the redevelopment will arise in the year the CC is granted. The consideration will be the stamp duty value on the date of CC. The cost and holding period will be that of your father. The capital gain can be claimed exempt u/s 54 if you satisfy the… (read more)

The gains will be assessed as STCG because the redeveloped portion is held for less than 24 months. Its holding period starts from the date of OC or possession (05/08/2025) and not from the inheritance date (07/02/2019) or redevelopment agreement (25/11/2022). (read more)

The AO has judicial discretion u/s 270A(1) not to levy penalty if he is satisfied that the circumstances are genuine. Immunity u/s 270AA is also available in genuine under-reporting cases provided procedural conditions are met. The AO has no power to waive u/s 273A. However, the PCIT/CIT has power to waive or reduce penalty if… (read more)

Loans are not included as they are repayable with or without interest and have a debtor-creditor relationship. However, current account which comprises of share of P&L, salary, interest etc can be regarded as part of capital. (read more)

Under the new tax regime for an AOP, the surcharge on income tax is capped at maximum of 25%. The 37% surcharge applies only under the old tax regime for income exceeding ₹5 crore. It does not apply if the AOP has opted for the new regime. (read more)

It is well settled that an addition u/s 69A r.w.s. 115BBE cannot be made relying solely on a dumb document found with a third-party without corroborative evidence. Also, cross-examination opportunity to the assessee before relying on such document is mandatory under the principles of natural justice. In Bharti Jayanti Jain vs ACIT ITA No. 7323/MUM/2025… (read more)

It is arguable that there is no "transfer" because the same area is received in the new building after redevelopment. It is a mere improvement of an existing asset and not a "transfer". However, if any additional area is received, the market value of that may be taxable. In the case of residential property, the… (read more)

Generally speaking, addition u/s 69A is not valid when the return is filed u/s 44AD because the presumptive income offered is deemed to cover the profit element. Further addition defeats the scheme. However, the addition may be valid if the AO brings cogent material to show that the money/deposits are not from business but are… (read more)