India: Corporate Tax

India's Carbon Credit Trading Scheme faces a critical gap as the first compliance year approaches in April 2026. While the Energy Conservation Act established the carbon market framework and the Income Tax Act was completely revamped in 2025, the legislature failed to connect these two pieces of legislation, leaving carbon credit certificate transactions in a tax limbo that threatens to undermine the country's ambitious net-zero 2070 goals.

This quarterly tax update examines critical judicial rulings that will shape international tax planning and M&A structuring in India, including the Delhi High Court's landmark decision on deputation arrangements and the Mumbai Tribunal's denial of loss carry-forward in demergers worth INR 2.4 billion.

Global Capability Centres in India have evolved from basic support operations into strategic hubs handling high-value functions like R&D, analytics, and procurement. As these centres scale and take on more complex responsibilities, multinational enterprises face heightened tax risks around permanent establishment classification and transfer pricing compliance that require careful structural review and documentation.

The Supreme Court's ruling in Sanand Properties v. JCIT fundamentally redefines the boundaries between reassessment and revision, establishing that disclosure of documents alone is insufficient—tax authorities...

The Karnataka High Court has ruled on whether tax authorities can issue a single consolidated show cause notice covering multiple financial years under the CGST Act. While affirming this practice is permissible, the Court established critical limitations regarding time-barred periods and clarified how 'tax period' should be interpreted in the context of Sections 73 and 74.

Section 115-O of the Income-tax Act, 1961 (‘IT Act 1961’) states that in addition to the tax payable on the income earned in the hands of a domestic company, an additional income-tax shall be levied upon such company...

The Central Board of Direct Taxes (CBDT) has announced the Income Tax Rules of 2026 which will come into effect on April 1 2026 together with the new Income Tax Act of 2025.

India continues to be a top destination for global investors looking for long-term growth. Opportunities are immense across a wide range of sectors, including technology to manufacturing and consumer markets.

Once considered a long-term strategic move, cross-border hiring has now become an operational necessity. Today, organizations are rapidly expanding into new markets and relocating their specialists, building cross-border teams at an unprecedented pace.