No sunset date for old tax regime, 95% of refunds disbursed: CBDT chief, Pg13

Key Highlights:

• The CBDT has no plans to phase out the old tax regime, despite 88% of individual taxpayers opting for the new tax regime in Assessment Year 2025-26.
• 95% of pending income tax refunds have been disbursed, with the remainder expected to be cleared in February.
• The CBDT clarified that delays in refunds are not intended to push taxpayers to the new tax regime.
• The TCS on overseas travel has been reduced from 20% to 2%, aligning it with the standard rate for most categories.

Detailed Insights:

• The budget proposals for 2026-27 focus on long-term impacts through measures like decriminalization, minimizing litigation, and addressing conceptual concerns related to buybacks, MAT, and data centers.
• The reduction in TCS on overseas travel was prompted by the availability of better data, allowing the department to focus on tracking transactions rather than blocking liquidity with high TCS rates.
• The increase in STT on futures and options (F&O) was an attempt by the tax department to address specific issues, with the regulator responsible for further action.
• The NUDGE campaign in November-December 2024 and 2025 identified erroneous refund or deduction claims, resulting in Rs 1,750 crore reduction in revised returns and Rs 8,800 crore of additional tax revenue.
• Rationalization of penalties aims to bring clarity and certainty, with the intent to implement changes comprehensively with the new Income Tax Act to avoid frequent amendments.

Key Concepts Involved:

• Central Board of Direct Taxes (CBDT): The apex body responsible for direct tax administration in India.
• Tax Collection at Source (TCS): A mechanism where the seller collects tax from the buyer at the time of sale.
• Securities Transaction Tax (STT): A tax levied on the purchase and sale of securities listed on stock exchanges.
• Minimum Alternate Tax (MAT): A tax imposed on companies that have zero tax liability due to exemptions.