Page 12 - Bullion World Issue 02 Volume 06 February_2026

Bullion World | Volume 6 | Issue 02 | February 2026

TAXATION OF SOVEREIGN GOLD BONDS • Software development services, IT enabled
• It is proposed to clarify that the capital gains services, knowledge process outsourcing services
exemption applicable to SGBs will apply only if and contract R&D services relating to software
SGBs are purchased directly from RBI and held till development are all proposed to be clubbed
maturity. Therefore, secondary market purchases under a single category of Information Technology
will not get this benefit, and will be subject to tax. Services with a common safe harbour margin of
15.5 % (announced in Budget speech)
APPLICATION FOR LOWER DEDUCTION
OF TAX FOR SMALL TAXPAYER ONE TIME FOREIGN ASSET
• For small taxpayers (category to be prescribed), DISCLOSURE SCHEME
it is proposed that an application for issuance of • Introduced for small taxpayers as a one-time
certificates for lower rate or nil deduction of tax foreign asset disclosure window (6 months) and
may be made electronically to the prescribed applicable where the foreign asset value is below
income-tax authority. prescribed threshold
• The prescribed income-tax authority shall • Help resident individuals regularise historical
examine the application electronically and issue overseas investment non-disclosures -
the certificate subject to fulfilment of conditions • Undisclosed foreign income/assets up to ₹1 crore -
as may be prescribed, or reject the application 30% tax + 30% penalty
if prescribed conditions are not fulfilled or the • Tax already paid but asset not disclosed (up to ₹5
application is incomplete. Rules in this regard will crore) - ₹1 lakh penalty
be notified.

OTHER KEY PROPOSALS INDIRECT TAX PROPOSALS
• It is proposed to restrict the deduction of interest
on borrowed funds against dividend income There has not been any change in the
(currently permitted upto 20% of the dividend duty rate on gold dore/ silver dore and
only a sunset clause
income).
• Due date to deposit employee contributions to (31 March 2027) has been included.
funds (PF, ESIC etc) proposed to be aligned with The Hon’ble FM in her speech also
the return-filing due date, which would result in mentioned that to address the concerns
reducing disputes and litigation on this matter. arising about utilization of capacities
• Tax rate on unexplained credit, unexplained by manufacturing units in the Special
investment proposed to be reduced to 30% as Economic Zones (SEZ) due to global
against 60%. trade disruptions, I a special one-time
• TCS provisions rationalised: e.g., scrap, minerals, measure is proposed to facilitate sales
and liquor unified at 2% and TCS on Liberalised by eligible manufacturing units in SEZs
to the Domestic Tariff Area (DTA) at
Remittance Scheme (education/medical) cut concessional rates of duty. The fine print
to 2%; Also, TCS on overseas tour package
of the notification is this regard will have
standardised at 2% with threshold removed. to be seen.
• Tax holiday proposed until 2047 for foreign
companies providing cloud service by setting up
Indian data centres and serving customers locally In case you wish to further discuss any of the above
through an Indian re-seller entity. Related Entities issues in detail or understand the applicability in your
providing data center services from India to get a case, you can reach out to us at the following:
safe-harbour of 15%. bnvcaoffice@gmail.com, bnv1964@yahoo.co.in, and
• It is proposed to convert penalty into fee to bhaktivaidyaassociates@gmail.com.
be charged per day of the default subject to
a maximum ceiling on failure to get accounts B. N. Vaidya & Associates
audited, penalty for non-furnishing of TP report Ground Floor, Vaidya Bhavan, 92 Atmaram Merchant
and penalty for default in furnishing statement for Road, Mumbai 400-002
financial transactions or reportable account. T: +91 22 2208 7849

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