I.TAX UPDATES
DIRECT TAX contd.
CBDT extends due date for filing returns of income to 15th September
In an important development CBDT has extended the due date for filing of returns of income for the current assessment year i.e., A.Y. 2025-26 from 31st July 2025 to 15th September 2025. This will apply to non-corporate taxpayers. This has been done in view of the extensive changes in forms of returns of income and the time needed for updating the utilities for filing of returns.
CBDT Circular No. 06 of 2025 dated 27th May 2025
CBDT notifies HUDCO Bonds for availing exemption from capital gains
CBDT has notified bonds issued by Housing and Urban Development Corporation Limited on or after April 1, 2025, eligible for availing exemption from taxable Capital gains under Section 54EC of the Income-tax Act.
CBDT Notification 31/2025 in F.No. 225/06/2024/ITA-II dated 7 April 2025
Government notifies 10 items as luxury goods for collection of TCS by sellers
Central Government has notified ten luxury items under section 206C of the Income-tax Act, 1961 for collection of Tax Collected at Source (TCS) by sellers. These are wrist watches, art pieces (such as antiques, painting, sculpture); collectibles (such as coin, stamps); yachts, rowing boats, canoes, helicopters; sunglasses; handbags, purses; pair of shoes; sportswear and equipment (such as golf kit, skiwear); home theatre systems; and horses for horse racing etc, if their value exceeds INR 10 lakh. Accordingly, TCS return form No. 27EQ has been amended to include these 10 items. It has been clarified that the provision shall be applicable only if the value of a single item exceeds INR 10 lakh. FAQs relating to implications of the notification have been replied in CBDT Circular dated 23 April 2025.
Notification No. 36 of 2025 [F. No. 370142/11/2025-TPL], dated 22 April 2025
Government prohibits deduction of expenses incurred in settlement proceedings
Central Government has issued notification under section 37(1) of the Income-tax Act, directing that expenditure incurred by a person to settle defaults under the SEBI Act, the Securities Contracts (Regulation) Act, the Depositories Act, and the Competition Act, will not be allowed as deductible business expenditure in computing taxable income. FAQs relating to the notification have been replied in CBDT Circular dated 24 April 2025.
Notification No. 38/2025 [F. No 370142/11/2025-TPL], dated 23 April 2025
CBDT notifies new Return ITR-B for Block assessments in Search cases
CBDT has notified new return form ITR-B for cases of search and seizure actions under Sections 132 or 132A initiated on or after 1st September 2024. Form ITR-B will have to be used to declare income for the block assessment period.
CBDT Notification 30/2025 [F. No. 370142/29/2024-TPL], dated 7th April 2025
CBDT notifies new Return forms for Assessment Year 2025-26
CBDT has issued new forms of returns of income ITR-1, 2, 3, 4, 5, 6, and 7 for Assessment Year 2025-26.
CBDT Notifications No. 40, 41, 42, 43, 44, 46, /2025, dated 29 April to 3 May 2025
INDIRECT TAX
CUSTOMS
Revised Formats for Arrest and Incident Reports – Mandatory Inclusion of DIGIT ID
The Board has issued instructions revising formats for submitting Arrest Reports and Incident Reports (where no arrest is made). The update mandates inclusion of the DIGIT ID in both types of reports. The DIGIT ID will serve as a unique digital identifier, enabling quicker cross-reference across CBIC's investigation, risk-management and data-analytics systems. Revised formats are provided as Annexure-I (Arrest Report) and Annexure-II (Incident Report) to the Instruction.
[Instruction No. 10/2025-Customs, dated May 13, 2025]
Customs duty exemption on the import of art, antiques, and memorials for public exhibition
The Central Government, in a bid to promote public access to cultural and historical artefacts, has granted complete customs duty exemption on the import of works of art, statuary, public memorials, antiques, and other items defined under the Antiquities and Art Treasures Act, 1972, provided they are intended for public exhibition in museums or art galleries. The exemption is subject to conditions: (i) import is made by the museum or gallery itself; (ii) a declaration that the imported goods will not be sold or traded; and (iii) a certificate issued by an authorized officer under the Ministry of Culture confirming public access and the institution's status. In the case of antiquities, registration with the Archaeological Survey of India within 90 days of import is also mandatory.
[Customs Notification No. 29/2025-Customs dated May 09, 2025]
Directorate of International Customs (DIC) appointed for verification of "Proof of Origin"
The Board has appointed Directorate of International Customs (DIC) to verify all requests for verification by assessing officers for proof of origin under Trade Agreements. The DIC's FTA Cell will manage the receipt and uploading of specimen signatures and seals of authorized officials from partner countries onto the ICES portal and will also share these with DRI (Hqrs) and non-EDI locations. The FTA Cell will establish a standard operating procedure for tracking these records and submit periodic reports to the Board
[Circular No. 14/2025 - Customs dated April 21, 2025]
Simplification of Procedures for Air Cargo Movement and Transshipment
To processes, especially for high-value and perishable goods, the Board has decided to implement the following key measures for Unit Load Devices (ULDs), which are essentially the standardized containers and pallets used in air freight, for smooth and efficient movement of air cargo:
a. removal of the Rs. 20 transshipment permit fees. b. harmonizing procedures for temporary import of Unit Load Devices (ULDs), as follows:
- ULDs/air containers without any tracking devices or with tracking devices affixed on the container, be imported temporarily outside the customs area on execution of a "Continuity Bond" by the air carriers/air console agents.
- When the ULD is temporarily imported along with the tracking devices, the Tracking devices or data loggers should be identifiable with Unique Identity Numbers (UINs) and is to be recorded during import.
- Such tracking devices or data loggers may contain a battery and Bluetooth technology for communications. Therefore, compliance to Aircraft and Airport Physical Security Guidelines/Regulations of the Ministry of Civil Aviation (BCAS) shall be required to be complied with.
- The responsibility for providing the proof of export of such ULDs along with the tracking devices, if any within the time-period specified shall be of the carriers viz. air carriers/air console agents.
[Circular No. 15/2025-Customs dated April 25, 2025]
Strict Compliance Required for Export of Basmati and Non-Basmati Rice under DGFT Policy
The Board issued Instructions addressing inconsistencies in enforcement of export policy for Basmati and Non-Basmati rice. The Board has clarified that as per DGFT Notification No. 62/2024-25 dated March 10, 2025, exports of these rice varieties to EU member states and specified European countries (UK, Iceland, Liechtenstein, Norway, Switzerland) require a Certificate of Inspection from the Export Inspection Council or Agency. Exports to other European countries are exempt from this requirement until September 09, 2025.
[Instructions No. 02/2025-Customs dated April 01, 2025]
Recognition of National Food & Feed Reference Laboratory (NFFRL), Kathmandu, Nepal for certifications
The Board has issued Instructions informing that the Food Safety and Standards Authority (FSSAI) of India has recognized the National Food & Feed Reference Laboratory (NFFRL), Kathmandu, Nepal, for analysis of specific food products in terms of the Memorandum of Understanding signed between FSSAI and the Department of Food Technology and Quality Control (DFTQC), Nepal. Certificates issued by NFFRL for products including juice, jam, jelly, pickles, candies, ginger, fresh fruits and vegetables, and instant noodles will be accepted by Indian food import authorities.
[Instruction No. 04/2025-Customs dated April21, 2025]
Clarification on CITES Export Permit Requirements for Agarwood Products
The Board has clarified that as per the Ministry of Environment, Forest & Climate Change and CITES Resolution Conf.13.7 (Rev.CoP17), "specimens of agarwood- up to 1 kg of wood chips, 24 ml of oil and two sets of beads or prayer beads (or two necklaces or bracelets) per person" for personal or household use do not require CITES Export permits or CITES Re-export certificates.
[Instruction No. 05/2025-Customs dated April 25, 2025]
Prohibition on Import or Transit of Goods Originating from Pakistan and closure of Integrated Check Post Attari for All Passenger and Goods Movement
Para 2.20A inserted in the Foreign Trade Policy (FTP), 2023 prohibiting, with immediate effect, the direct or indirect import or transit of all goods originating from or exported by Pakistan, irrespective of their importability status. The restriction is imposed in the interest of national security and public policy. Any exceptions require prior Government of India approval.
The Board has issued instructions informing the immediate closure of the Integrated Check Post (ICP) Attari on the India-Pakistan border in Punjab. Consequently, all incoming and outgoing passenger and goods movements through ICP Attari are suspended effective immediately. As per Ministry of Home Affairs OM dated May 01, 2025, while the ICP Attari remains closed for general passenger and goods movement, limited movement is now permitted. Pakistani nationals with valid Pakistani travel documents may exit India, and Indian nationals with valid Indian travel documents may enter India through ICP Attari until further orders. A one-time exemption has been granted to allow entry of 162 freight trucks carrying perishable agricultural goods for export to India from Afghanistan via ICP Attari. This exemption applies notwithstanding the general closure of the ICP, and customs authorities are advised to take suitable action accordingly
[DGFT Notification No. 06/2025-26 dated May 02, 2025, Instruction No. 07/2025-Customs dated May 03, 2025, Instruction No. 06/2025-Customs dated April 26, 2025, Instruction No. 08/2025-Customs dated May 05, 2025, and Instruction No. 09/2025-Customs dated May 09, 2025]
Port restriction on import of certain goods from Bangladesh
By insertion of a new condition under the FTP, Port Restriction on import of Goods from Bangladesh have been introduced, as under:
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