The new income tax rules have rationalised employee perquisites by revising thresholds for tax-free office meals, gifts received from employers, employer-provided educational facilities for employees' family members, and the use of motor vehicles provided by employers.
These limits had remained unchanged for decades despite rising incomes and costs. Their revision seeks to align the taxation of salary benefits with current economic conditions and ensure a more accurate computation of taxable income.
At the same time, the new rules tighten disclosure and reporting requirements for crypto assets, reflecting concern over the growing use of digital assets for tax evasion, regulatory arbitrage and opaque cross-border transactions. For the first time, the rules prescribe detailed reporting and due-diligence obligations for crypto-asset service providers, including exchanges and intermediaries.
Under the revised framework, crypto platforms must follow structured procedures for information collection, verification, ongoing due diligence and reporting of transactions to tax authorities. The objective is to improve the traceability of virtual digital asset transactions—crypto-based assets notified under tax law—close data gaps and strengthen enforcement without imposing blanket restrictions on the sector.
Beyond perquisites and crypto disclosures, the new income tax rules also recalibrate transaction-level reporting by revising thresholds for quoting PAN and reporting specified financial transactions.
For example, the PAN requirement for motor vehicle transactions now applies only above Rs 5 lakh. The threshold for quoting PAN in immovable property transactions has increased from Rs 10 lakh to Rs 20 lakh. The reporting threshold for property transactions under SFT—statement of financial transactions—has risen from Rs 30 lakh to Rs 45 lakh. In addition, the purchase of stamp paper has been added as a new reportable category.
The rules also introduce a new Form 41, replacing Form 10F, for non-residents seeking to claim benefits under Double Taxation Avoidance Agreements — tax treaties that prevent the same income from being taxed in two countries. Under the revised requirement, non-resident taxpayers must furnish a communication address in India while applying for treaty benefits. This marks a change, as non-residents may not have a physical presence, place of business or residential address in the country. The requirement could pose compliance challenges for foreign taxpayers and overseas investors operating in India without an on-ground address, even though eligibility for treaty benefits is based on residence status and fulfilment of treaty conditions.
Professionals opting for presumptive taxation—a scheme allowing tax computation on a presumed income — such as lawyers, doctors, accountants and IT consultants, will have to maintain books of accounts in electronic form, ensure continuous accessibility in India, and keep daily backups on servers physically located in India.
The rules also formally recognise Central Bank Digital Currency (CBDC) as an accepted electronic mode of payment, laying the groundwork for wider adoption of the digital rupee within the formal financial system.
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