TAX HOLIDAY FOR AI Data Centres

The Government has introduced a long-term tax incentive to make India a global hub for AI and cloud data centres.

👉 What does this mean?

• Foreign cloud companies using Indian data centres to serve global customers will get a tax holiday until
2047.

• Services for Indian customers must be routed through an Indian entity.

• A fixed profit margin rule reduces tax disputes for related companies.

✅ Why should an ordinary taxpayer care?

• More global investment coming into India

• Stronger digital infrastructure

• Job creation and technology growth

• Improved availability of cloud and AI services

This move positions India as a long-term digital infrastructure destination.

Reach out to us to know more

Budget 2026 – Penalties Replaced with Fixed Fees

From 1 April 2026, the Income-tax law will become simpler and fairer. The Government has decided to replace certain penalties with mandatory fees. This reduces disputes, litigation and officer discretion. ━━━━━━━━━━━━━━ 🔍 Why this change? Earlier: ❌ Penalties were discretionary ❌ Officers decided whether to levy penalty ❌ Led to appeals & litigation Now: ✔ Fixed fees ✔ Automatic & predictable ✔ No scope for disputes ━━━━━━━━━━━━━━ 🧾 Major Changes Introduced 1️⃣ Failure to get Tax Audit done Earlier (Section 446): • Penalty up to ₹1.50 lakh or 0.5% of turnover Now (Section 428(c)): • Fixed Fee of ₹75,000 or ₹1,50,000 (depending on delay) ━━━━━━━━━━━━━━ 2️⃣ Failure to submit Accountant’s Report (Transfer Pricing) Earlier (Section 447): • Penalty of ₹1,00,000 Now (Section 428(4)): • Fixed Fee of ₹50,000 or ₹1,00,000 (depending on delay) ━━━━━━━━━━━━━━ 3️⃣ Failure to file SFT / Reportable Transactions Earlier (Section 454): • ₹500 per day • ₹1,000 per day after notice • No upper limit Now: ✔ Converted into mandatory fee ✔ Maximum cap of ₹1,00,000 introduced This avoids never-ending penalties. ━━━━━━━━━━━━━━ A big step towards trust-based taxation. ━━━━━━━━━━━━━━ 📞 Need help with Tax Audit, SFT, Transfer Pricing or compliance? We ensure zero-risk, fully compliant filings.

When Should You Start a Partnership Firm?

 

🤝 When Should You Start a Partnership Firm?

A partnership firm works well when two or more people want to run a business together by sharing investment, work, and profits.

✅ Good choice when:
• You’re starting a small or growing business
• You want a simple and affordable setup
• Partners trust each other
• Decisions need to be quick

🔍 Things to think about first:
• How profits and losses will be shared
• Who handles what role in the business
• How much each partner will invest
• What happens if a partner wants to leave
• Basic tax and compliance responsibilities

⚠ Important cautions:
• Partners are personally responsible for business debts
• Misunderstandings can affect the business
• Verbal agreements are risky — always have a written partnership deed
• Changes in partners need proper documentation

📌 A clear agreement and the right guidance can save you from future problems and keep the business running smoothly.

Thinking of starting a partnership? Get proper advice before you begin.

Understanding the CBDT's Order on Extinguishment of Tax Demands

1. Introduction

   - Finance Minister Nirmala Sitharaman, in the Union Budget 2024 speech, announced the extinguishment of tax demands until Assessment Year 2015-16.

   - Following the announcement, the Central Board of Direct Taxes (CBDT) released an order outlining the remittance and extinguishment process for tax demands under the Income Tax Act, 1961, Wealth Tax Act, 1957, or Gift Tax Act, 1958.

 

2. Monetary Limit for Waiver of Demand

   - Until AY 2010-11, demands up to Rs. 25,000 per entry are eligible for waiver.

   - From AY 2011-12 to AY 2015-16, the waiver applies to demands up to Rs. 10,000 per entry.

 

3. Maximum Ceiling of Rs. 1 Lakh

   - Remission and extinguishment of eligible demands are capped at Rs. 1,00,000 per assessee, regardless of the total eligible amount across assessment years.

 

4. No Waiver for TDS/TCS Demands

   - Waiver of demand doesn’t apply to demands raised against tax deductors or collectors under TDS or TCS provisions of the Income Tax Act, 1961.

   - Outstanding demand for eligible assessment years will be exclusive of demands arising from TDS/TCS provisions.

 

5. Tax Demand Components

   - Outstanding demand comprises principal tax under the Act plus interest, penalty, fees, cess, or surcharge as per Act provisions, with the ceiling limit as applicable.

 

6. Exclusion of Interest on Delayed Payment

   - Interest under section 220(2) isn’t considered for calculating demand entry amount or ceiling limit of Rs. 25,000, Rs. 10,000, or Rs. 1,00,000, respectively.

 

7. No Right to Claim Credit or Refund

   - Remission of outstanding demands doesn’t grant the assessee the right to claim credit or refund under the Income Tax Act or any other legislation.

 

8. No Impact on Criminal Proceedings

   - Waiver of demand won’t impact ongoing or completed criminal proceedings against the assessee and doesn’t provide any benefit, concession, or immunity under such proceedings. 

Supreme Court Declares Electoral Bond schemes as "Unconstitutional"

On February 15, a unanimous decision by a five-judge bench of the Supreme Court declared the electoral bond scheme unconstitutional.

Here's a summarized breakdown of the Supreme Court of India verdict on the electoral bonds scheme:

1. 1. Unconstitutionality: The Supreme Court struck down the electoral bonds scheme and related amendments as unconstitutional and manifestly arbitrary.

2. 
   

3. 2. Violation of Right to Information: The scheme and amendments were found to violate voters' right to information about political funding under Article 19(1)(a) of the Constitution.

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5. 3. Directive to State Bank of India (SBI): SBI was ordered to immediately cease issuing electoral bonds and submit details of bonds purchased from April 12, 2019, till date to the Election Commission of India (ECI).

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7. 4. Disclosure of Information: SBI must disclose details including the date of purchase, buyer's name, and bond denomination to the ECI by March 6, 2024, for publication on its website by March 13, 2024.

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9. 5. Return of Electoral Bonds: Electoral bonds with a validity period of 15 days and yet to be encashed must be returned by political parties or purchasers to SBI for refund.

GST Applicable On Fees Collected From Nurses For Imparting Practical Training - AAR Karnataka

The Karnataka Authority of Advance Ruling (AAR) ruled on several questions posed by M/s SPANDANA PHARMA, a healthcare service provider. Here's a summary of the ruling:

1. 1. Medicines, Drugs, and Consumables: The supply of medicines, drugs, and consumables used in providing healthcare services to in-patients during diagnosis and treatment qualifies as a "Composite Supply" of healthcare services. It is exempt from GST under entry No. 74(a) of Notification No. 12/2017-Central Tax (Rate) dated: 28.06.2017, subject to specified conditions.

2. 
   

3. 2. Supply of Food to In-patients: Similarly, the supply of food to in-patients is considered a "Composite Supply" of healthcare services and qualifies for exemption from GST under the same entry and conditions mentioned above.

4. 
   

5. 3. Retention Money: GST is not applicable on money retained by the applicant.

6. 
   

7. 4. Fees for Practical Training: However, GST is not exempted on fees collected from nurses and psychologists for imparting practical training. This means that the fees collected for such training are subject to GST.

In essence, while certain aspects of healthcare services provided by M/s SPANDANA PHARMA are exempt from GST, fees collected for practical training are not exempt and are subject to GST.