After the new Income-Tax (I-T) Act, what is the big reform proposed by CBDT?
The major reforms include simplifying forms and processes, consolidating provisions, decriminalising certain actions, reducing litigation, and providing taxpayers with opportunities at various stages to declare or accept the department’s view, pay additional tax, and avoid penalties. Changes have also been made to the minimum alternate tax (MAT) and buybacks. These are big steps to ensure that, from April 1, when the Act is implemented, it is easy to understand and supported by a refined process.
The fresh rules under the new I-T Act, 2025, will be notified. Do you think there will be a shadow period where both new and old rules coexist to give comfort to taxpayers?
Yes, there will be an overlapping period. The duration will depend on the nature of compliance and the processes the rules address. For example, audit reports filed in September 2026, pertaining to AY 2026-27, will follow the old Act. So, which Act applies depends on the type of transaction being addressed.
The last Section of the new I-T Act is essentially a savings and repeal clause, which outlines scenarios where provisions of the 1961 law continue to apply. Cases already under scrutiny will proceed as before.
How many people have migrated to the new tax regime now?
Around 86 per cent of taxpayers have migrated to the new regime in AY 2025-26, up from 75 per cent in the previous year.
For I-T return Forms 1, 2, 3, and 4, the migration rate is 88 per cent compared with 76 per cent last year — a 12-percentage-point jump. Among corporates, about 60 per cent of income is now reported under the new tax regime.
Why are corporates lagging behind in choosing the new tax regime?
About 50 per cent of corporates report losses. Some have MAT credits, which can only be claimed under the old regime. These factors contribute to the slower adoption. Otherwise, the new tax regime rate is 22 per cent, compared with 30 per cent in the old regime.
Is this the reason MAT was introduced in this Budget?
Not entirely. MAT’s purpose isn’t just tied to the new tax regime. Conceptually, MAT needed a closure to prevent it from becoming perpetual. Converting it from an alternative tax to a minimum tax was the thought process, and claims can now be made under the new regime.
Could this penalise companies with large accumulated MAT credits?
No. The period available under the old regime continues. If an entity earned a MAT credit this year, it remains valid for the next 15 years. Credits earned 10 years ago are valid for five years. There is no sunset clause — the period and amount continue, maintaining equity.
Why are the new foreign assets disclosure scheme thresholds under the Black Money Act (BMA) set at relatively low levels of ₹1 crore and ₹5 crore?
It is primarily meant to help professionals who have worked abroad for some time. The intention was not to stack money overseas — it is usually a genuine oversight, and the amount has simply been left idle. In dollar terms, for a typical non-resident who has become a resident, $100,000 is a substantial sum. Some of this may be sitting unattended in bank accounts, some in Esops, and some as interest income. The person simply wants to come clean, and this scheme provides a window for them to do so.
How much money has been brought back so far under the Black Money Act?
There’s no separate tracking, but more taxpayers are now reporting foreign assets in their returns. Compared with last year, the number has doubled, aided by nudge campaigns and official intimations.
In the past two years, about ₹640 crore of tax has been paid by taxpayers who revised their returns and disclosed foreign assets in the FA Schedule.
Can you share the status of the Organisation for Economic Co-operation and Development’s Crypto Asset Reporting Framework (CARF)? Will India implement CARF rules from April 1, 2027?
Yes, this is part of India’s international commitments. Reporting provisions under CARF have already been introduced.
 "Ravi Agrawal, Chairman, Central Board of Direct Taxes (CBDT)")