INDIA Trends and Developments Contributed by: Rishabh Shroff, Kunal Savani and Chirag Shah, Cyril Amarchand Mangaldas
probate might offer invaluable certainty and can make the transfer seamless. This legislative shift democratises succession, but it also demands vigilance and a potential review of existing wills with fresh eyes to make sure that cur- rent family dynamics are reflected, beneficiaries are clearly identified and reliable executors are appointed. Readers are advised and urged to use this moment to ensure that their estate plan matches the sophisti- cation of the wealth created, fostered and preserved over the years, and that it stands refreshed in the face of these changes as implemented. India’s New Income Tax Act Unlike most other legislation, the Income Tax Act, 1961 (the “IT Act”) has been in constant evolution to align with economic policies, income levels, inflation and business realities. Since its enactment, the IT Act has been amended several times, reflecting adapt- ability, intricate drafting and layered provisions, the interpretation of which often challenges even the most seasoned professionals. What began a few years back with the then Indian government’s ambitious promise of a “comprehen- sive review” gradually snowballed into a saga of drafts, revisions, standing committee reports, expert task forces, discussion papers, public and industry expert consultations, and review of foreign tax legisla- tion, culminating, nearly two decades later, in India’s new Income Tax Act, 2025 (the “ITA 2025”), which is expected to take effect from 1 April 2026. Notably, the ITA 2025 is not a reinvention but indeed a recalibration, showcasing legislative maturity that bal- ances reform with reassurance. While the core policy framework remains unchanged, and settled positions under the earlier regime continue to offer stability, the redrafted provisions introduce a new interpretational landscape for areas previously undefined, dichoto- mous or judicially unsettled. Steps which were inter alia taken to ensure simplification and tax certainty include elimination of redundant provisions, removal of ~1,200 provisos and ~900 explanations, and adop- tion of a simplified reference system, allowing provi- sions to be cited by simply mentioning the section
and usage of formulae and tables for ease of com- prehension. The ITA 2025 has further simplified the construct of the residency provisions (ie, by removing multiple pro- visos and explanations which exist in the provisions of the IT Act). Further, individual taxpayers (including non-resident Indians (NRIs)), will continue to be sub- jected to the same residency rules under ITA 2025 as well. Thus, the introduction of the ITA 2025 will not alter the residential status of high net worth individu- als (HNIs) or NRIs. The practical implications for tax planning, compliance and documentation remain con- sistent with the previous legislative and interpretative frameworks. However, for taxpayers whose planning often hinges on precision, even subtle shifts in language can carry disproportionate consequences. Therefore, such tax- payers have requested a meticulous review of the rele- vant provisions, especially those touching on nuanced or historically ambiguous areas, in order to safeguard against unintended tax liabilities or adverse outcomes. Tax Residency While the residential status rules under the IT Act have historically operated with a sense of predictabil- ity, grounded in numerical day-count thresholds and long-established jurisprudence, recent adjudicatory trends suggest an evolving interpretational posture that places heightened emphasis on factual substance over statutory form. A notable reflection of this shift is the recent ruling of the Income Tax Appellate Tribunal (ITAT) at Bangalore in the case of Binny Bansal v DCIT , which has re-energised discussions around the scope and application of the “extended 182-day threshold” available to individuals leaving India. The IT Act offers a relaxation by extending the 60-day threshold to 182 days for individuals in certain out- bound scenarios. However, the ITAT has now clarified that such relaxation is not a blanket concession but is available only to those individuals who have already established themselves as non-residents in preceding years. By rejecting the taxpayer’s reliance on treaty- based, tie-breaker rules to claim non-resident status, the ruling signals a calibrated but firm reaffirmation of
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