r/IndiaTax

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Hi everyone, I need some serious technical advice from CAs or tax lawyers regarding a transitional edge case with the new Finance Act 2026 amendments.

The Situation:

• I received a scrutiny assessment order under Section 143(3) in January 2026.

• The Assessing Officer (AO) has alleged "misreporting" of income.

• I received the penalty notice, but the actual Penalty Order has NOT been passed yet.

The Legal Dilemma:

Under the old rules, misreporting completely disqualified you from Section 270AA immunity. However, the Finance Act 2026 (Clause 14 & 15) amended Section 270AA effective March 1, 2026. We can now get immunity from the 200% penalty and prosecution for misreporting by paying 100% additional tax.

The normal rule is that you must apply within 1 month of the assessment order (which would mean my deadline expired on Feb 28, 2026—one day before the new law kicked in).

My Defense / The "Loophole":

I was reading the exact substituted text for the new Section 270AA(2) in the budget document, and it states:

"An application referred to in sub-section (1) shall be made within one month from the end of the month in which the order referred to in clause (a) and clause (b) of the said sub-section has been received..."

Clause (a) refers to the assessment order (which I have).

• Clause (b) refers to the penalty/additional tax demand (which I do not have yet).

Because the new law uses the word "AND", my interpretation is that the 1-month statutory clock hasn't even legally started for me yet because both conditions haven't been met.

My Questions for the Pros:

1. Is my legal interpretation of the "clause (a) and clause (b)" wording solid enough to stand up in an appeal?

2. Because my assessment order is from Jan 2026, I suspect the Income Tax portal will automatically block me from filing Form 68 online, assuming my 1-month window is closed. Has anyone successfully filed a manual application/grievance to the JAO for this specific transitional issue?

3. Should I proactively submit a manual letter to my AO opting for the 100% additional tax route before they pass the 200% penalty order?

Any advice or practical experience with the new portal updates regarding this would be highly appreciated!

TL;DR: Got a 143(3) assessment in Jan 2026 with a misreporting charge. No penalty order issued yet. Trying to use the new "clause (a) AND clause (b)" wording in the amended Section 270AA(2) to prove my 1-month clock hasn't started, so I can claim the new 100% tax immunity instead of facing a 200% penalty. Need advice on how to execute this if the portal blocks me.

I have received a notice from the tax department. I need guidance urgently.

Notice: A survey under section 133A of the Income-tax Act, 1961 was conducted in the case of M/s BITCIPHER LABS LLP, which operated the CoinSwitch Kuber (CSK) platform. During the survey proceedings and subsequent enquiries, details of users and transactions carried out on the said platform were obtained and analyzed.

2. On analysis of the said information, it is observed that you have undertaken following transactions involving sale of Virtual Digital Assets through the aforesaid platform:

Bitcipher Labs. LLL ||. Transactions in virtual digital assets || 75,55,537/-

Further, on verification of PAN data, it is noticed that you have not filed your return of income for the Assessment Year 2022-23. Therefore, the income arising from the above transactions has not been offered to tax.

3. The information available on record, comprising the findings of the survey proceedings and the return of income filed by you, suggests that income chargeable to tax for A.Y. 2022-23 have escaped assessment within the meaning of section 147 of the Income-tax Act, 1961 in your case. Therefore, in terms of section 148A(1) of the Income-tax Act, 1961, you are hereby required to show cause as to why a notice under section 148 of the Income-tax, Act, 1961, should not be issued in your case for the AY 2022-23

....

The amount in the notice is the total amount of all the transactions done by me and not the overall profit I made. The overall profit was around 4.5 lakhs and that was the only income I had in the entire year I don't know what to do as I don't have this amount of money to pay taxes. The department has asked for a reply by the 15th april

As you know, every year while filing the ITR you have to adjust the every amount you have earned and also storing the docs for the future reference. But it is not feasible as we often forgot to manage the gaine if invested and all... so is it better to have a centralized solution that tracks every of your earning through out the year and their docs as well and while filing it gives you the exact amount to be file in what form and what place through AI. And it is also tracks your IT refunds and also it is adjusted total towards the latest tax rules. So what do you think about it ??

I received a GST Order-in-Original under Section 74 for ITC issue (fake invoice case).

Order date: 27-12-2025

Demand:

• Tax: ₹13.8L
• Penalty: ₹13.8L
• Interest extra

I did not attend the hearing earlier, so order was passed ex-parte.

Current situation:

• My salary account lien marked.

Planning next steps:

• Should I go for appeal (APL-01) or settlement?
• Can penalty be reduced in appeal?
• Is installment/EMI option possible in such cases?
• How to choose the right GST litigation CA/advocate in Chennai?

If anyone has faced similar GST issues, please share your experience and what worked for you.

Hi everyone,

I need practical guidance on fixing a mistake in a processed updated return of AY 2024-2025

My original tax return had the correct capital gains figure for a mutual fund transaction. Later, an updated return was filed through a CA, and while the sale value was entered correctly, the purchase cost was entered wrongly. Because of that, the updated return ended up showing a large capital loss of 4.52 lakh instead of a very small actual gain of 400

That loss was only carried forward and was never used for set-off. After I noticed the mistake, I made sure not to use that carried forward figure in AY 2025-2026 and made the CFL 0.But the updated return for the earlier year still shows the wrong loss.

Now that the return has been processed, I want to voluntarily correct the record. I am confused because the rectification guidance seems to suggest that return data changes cannot be used for reducing carried forward loss.

Has anyone dealt with a similar situation? What is the right practical route to get this corrected?

Hey everyone,
Looking for some thoughts on a tax planning strategy for my side hustle.
Context: My sibling and I both have full-time jobs and are already maxed out in the 30% tax bracket. On the side, I do software consulting for foreign clients through a freelance platform. We've set up a formal registered business entity for this, but taking a founder's salary from it doesn't make sense since it just adds to our personal 30% slabs. (I primarily manages the account)

The numbers for FY 25-26:

• Total billed: ~$21.5k USD
• Realized in Indian bank: ~$14k USD (around ₹12.6L)
• Still sitting in the foreign platform wallet: ~$7.5k USD (Sitting in Toptal wallet)

Here is what we are thinking of doing to bring the tax liability down to around lower range say 50-70K or may be less legally:

1. Cash Basis Accounting (Income Deferral): We are planning to opt for the cash basis of accounting for the business. Since the $7.5k is still sitting in the foreign virtual wallet and hasn't hit our Indian bank account yet, we are hoping to defer recognizing this income until the next financial year. (We will still declare the foreign wallet balance in Schedule FA of our ITR to stay compliant and avoid any Black Money Act penalties). (By selecting this in our ITR-5)

2. Rent to Parents: We use our parents' house as our registered office space, so we plan to formally pay them around ₹4 Lakhs a year as rent. They can claim the 30% standard deduction on this, and since they have no other income and are in the 0% tax bracket, it's tax-free for them.

3. Salary to Parents: We also want to hire our parents for back-office admin and bookkeeping, paying them a combined salary of around ₹4.5 Lakhs. Again, this falls within their basic exemption limits, so no tax for them.

4. Business Expenses: We have about ₹82k in genuine software subscriptions (like AI tools) and online upskilling courses. We are also planning to have about ₹1 Lakh in cash withdrawals that we plan to back up with internal petty cash vouchers for local travel and office supplies.

5. Tax-Free Withdrawals: By claiming the rent, salaries, and expenses, the net taxable profit of the business drops to around ₹2.2L. The business will pay its flat corporate tax on this (which comes to around ₹70k). After the business tax is paid, we plan to withdraw the remaining post-tax profits to our personal accounts, which should be exempt from tax in our hands.

This plan theoretically shifts a lot of income to our parents tax-free, defers the wallet balance, and keeps our personal tax returns completely clean.

What do you guys think? Is this plan solid, or are there any suggestions or better ways to optimize this further? I actually not keen to pay the taxes much and want some legit suggestions

For the past two years, I have been working from home on a permanent basis. There is no formal rent agreement in place, but I have been transferring approximately 80,000 per month to my mother’s account.

Based on this arrangement, I have been claiming HRA in my tax returns. At the same time, I have been filing my mother’s ITR and declaring 45,000 per month as her rental income.

Recently, after hearing about notices being issued for incorrect HRA claims, I chose to remove the HRA component from my returns and paid the additional tax along with the applicable penalty from my year-end bonus for FY23-24 and FY 24-25, which amounted to around 4.5 lakhs.

I would like to understand if this was the right approach and whether I should expect any complications from the Income Tax Department.

When is the next "Vivad Se Vishwas" VSV Scheme predicted to happen?

The stats on the internet show that the volume of cases pending in CIT(A) and ITAT are at an all time high and whenver such a situation happens, the govt brings these schemes and all the disputes that are in appeal stage get resolved just by paying taxes (at max) and no additional interest or penalty is levied.

The last time this happened was in 2024.

PS: I am planning to appeal my Assessment order (80GGC and HRA disallowed . HRA had all possible documents required, The AO did not see the documents properly).

In the worst case, if such scheme comes in next 1 or 2 yrs, I would not have to pay any interest, penalty and whatnot.

Hi! I want to know if I did equity trading where i held equity shares for a week to 10 days maximum and I booked profit, my trading is frequent like 5-6 trades each week for an year; Then the profit earned would be taxed under Short Term Captial Gains or Business Income? Which ITR would I fill?

kindly guide as this will be my first time filling an ITR and I have no source of income apart from equity trading. Income generated is 16L.

We run a partnership firm with two partners (three of us in total), and currently have no employees. We operate as a software agency, building projects for clients.

Our firm has both a PAN and TAN. However, we have not yet opened a bank account in the firm’s name due to some delays, and it may take approximately two months to complete the process.

In the meantime, we have onboarded our first client, who is paying us ₹1.5 lakh per month. Since the firm does not have a bank account yet, the first payment was received in my personal account, and I distributed one-third of the amount to each partner.

The client has now requested our firm’s PAN, presumably for TDS and tax compliance purposes. We understand that any TDS deducted will be linked to the firm’s PAN rather than my personal PAN. However, given that the payments are currently being routed through my personal account, we would like guidance on how to manage this situation properly until the firm’s bank account is operational, and to ensure that we do not face any compliance or tax-related issues.

After logging in, it shows the new forms 126 and 128. There is an option to go click for :"Compliance for IT act 1961" but when i click, it shows "Network error while connecting to JSF".

I have submitted TDS for property purchase on 31st March and i need to generate Form 26QB but there is no such option on the new portal and unable to navigate to older portal.

Anyone else facing this issue?

Hi,

I'm trying to pay 14.95% TDS on property transaction to NRI seller.

I've logged in with my TAN and the TDS payment form doesn't show any option specifically mentioning property transaction.

Any interest (not being interest referred to against Sl. Nos. 2, 3, 4 and 5) or any other sum chargeable under the provisions of this Act, not being income chargeable under the head “Salaries”. - 393(2) [Table: Sl. No. 17] - 1057

The above seems to be the closest option.

Can anyone please confirm?

Since the new form came into effect only from April 1, not finding any resources online related to it.

Hi Everyone i am looking for recommendation choosing between Old or new regime for this year. My salary is 15.99 lpa, i have home loan + top up (40k), PPF (5k), SSY (5k) and NPS (5k). please help me choosing right tax regime for saving.

Invested in under construction property in March 2023. I have paid builder flat cost as per construction plan till March 2026. I had deducted 1%TDS but not filled form 26QB till now. Received ledger from the builder. He has not yet claimed TDS. If I pay full TDS now (from March 2023 to March 2026), will this save late fee and interest?

I'm working with a Foreign Company as a contractor. We are using a online platform getting paid and managing my contract. in that contract / platform my salary is shown in INR.

my CA is telling me to create GST and LUT asap. But i'm traveling to another state for work for 2 months. and i'm worried if i have to pay 36K PM since my salary is 2L Per month.

If i create GST and LUT after 2 months when i get home. Reason why doing after 2 months ? I was told by my CA that they'll come home and i need to travel soon.

The contract started from April Only.

Let me know if i'm getting into any thing i don't know and overpaying.

Thanks

Hi All,

There was a grievance for my ITR AY 2020-21 which I had filed long back. There was a condonation request as well. The issue was settled.

I am getting this in my worklist.

https://preview.redd.it/yv2jmsqeultg1.png?width=2048&format=png&auto=webp&s=0741f8dd8cbda2bf2bf7aa21940017b851be513f

Please can someone suggest what should I do as next step.

Thanks,