- India is standardizing international tax assessments through expanded taxpayer outreach and overseas units as of August 2026.
- The Income Tax Act 2025 replaced the previous framework on April 1, 2026, introducing new compliance forms.
- Advance Pricing Agreements reached record levels in 2026 with over 1,000 cumulative agreements signed to prevent disputes.
India’s Income-tax Department is seeking clearer outcomes in international tax cases by expanding taxpayer outreach, standardizing cross-border assessments and using overseas units to identify gaps in guidance. Monica Bhatia, Principal Chief Commissioner of Income Tax (International Tax), outlined the effort on August 19, 2026.
The campaign comes as taxpayers and officers adjust to a new statutory framework. Bhatia said outreach would help identify where taxpayers need additional guidance and where the department sees continuing ambiguity.
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She also pointed to consistency. Multinational structures and cross-border transactions have become more complex, increasing pressure on officers to apply the same provisions in similar cases.
Bhatia described the effort as collaborative at an Assocham conference in New Delhi.
“It is a journey that we are trying to traverse together [with taxpayers]. Policy stability is foundational to investor confidence.”
She said the outreach is examining “areas where clarity and guidance are needed” after the Supreme Court’s judgment in the Tiger Global matter and during the transition to the new law.
A new law is forcing tax officers and taxpayers to reset their working rules
The Income Tax Act, 2025 replaced the 1961 framework on April 1, 2026. The transition also includes the Income Tax Rules, 2026, creating a new operating framework for taxpayers dealing with overseas income, transfer pricing and cross-border structures.
The department has introduced new forms for that work. Form 50 covers pre-filing consultation, Form 51 is used for an Advance Pricing Agreement application, and Form 54 handles renewal.
Ravi Agrawal, chairman of the Central Board of Direct Taxes, has linked the legislative change to compliance. “The new Income Tax Act will help bring more clarity to processes and trigger higher compliance,” he said in February 2026.
The legislative transition continued this month. The Taxation and Other Laws (Amendment) Act, 2026 received presidential assent on August 17, 2026, after the Lok Sabha passed it on August 6.
Advance pricing agreements are becoming the department’s main certainty tool
The Advance Pricing Agreement programme gives companies a way to establish transfer-pricing treatment before disputes reach assessment or appeal. Its recent output has reached record levels, although the FY26 figures cited in the material differ slightly.
| APA measure | FY 2025-26 figure |
|---|---|
| Agreements signed in the detailed APA breakdown | 219 |
| Cumulative agreements in that breakdown | 1,034 |
| Unilateral agreements in cumulative total | 750 |
| Bilateral agreements in cumulative total | 284 |
| Bilateral APAs concluded in FY 2025-26 | 84 |
| Bilateral APAs concluded the previous year | 65 |
| Median unilateral completion time | 36 months |
| Average bilateral completion time | 38 months |
A separate tally cited for FY26 records 220 agreements and a cumulative 1,035 by March 2026. Both sets of figures describe the programme’s expansion, while the detailed breakdown records 750 unilateral and 284 bilateral agreements.
The bilateral programme also widened its reach. New agreements were reached for the first time with France, Ireland, Indonesia and Sweden.
The 2026 APA report says the programme has provided certainty for more than 5,500 assessment years. It has also helped prevent or resolve over 2,800 transfer-pricing matters.
That record gives the department a practical route to reduce disputes before they begin. Agreements take time, however. The median unilateral timeline has stabilized at 36 months, while bilateral cases average 38 months.
Consistency is being pursued alongside a tougher foreign-remittance check
The department paired its certainty drive with enforcement action. On August 18, 2026, it launched a nationwide verification exercise covering 394 suspicious entities and 36 professionals connected to suspicious foreign remittances.
The exercise includes 117 entities in land-border states. Officials are examining shell entities and alleged bogus foreign remittances made under the guise of charitable donations, as well as the role of professionals who certified the transactions.
The approach reflects a broader shift from aggressive audits toward data-led reminders. The department’s “nudge” drive resulted in 12.5 million updated ITRs through alerts rather than formal notices.
The same administration is also trying to reduce the stock of disputes. Agrawal said the department disposed of over 2.24 lakh appeals in FY26, compared with 1.79 lakh fresh appeals.
Finance Minister Nirmala Sitharaman has called for a move from litigation management to dispute prevention. The appeals figures place that objective alongside the scrutiny of transactions that may require formal investigation.
Officials are linking cross-border certainty to fewer appeals and more digital administration
Agrawal chaired a conclave of Principal Chief Commissioners on August 18, 2026. The meeting addressed a roadmap for taxpayer services and a transition to digital-first administration.
Raman Chopra, Chief Commissioner of Income Tax (International Tax), described certainty as a central taxpayer concern.
“Taxpayers are more concerned about certainty than the actual tax payment.”
Chopra made the statement during a June 2026 webinar and reiterated it in August reports. He also said more than 1,100 participants from 16 overseas jurisdictions joined recent CBDT-PwC outreach sessions on transfer pricing and safe-harbour provisions.
The participating jurisdictions included the US, UK and Singapore. The sessions give the department a channel to discuss rules with companies and advisers working across multiple tax systems.
Safe Harbour Rules offer another route for multinational enterprises. They prescribe fixed margins for 12 transaction categories, including IT and KPO services.
The Finance Act, 2026 consolidated multiple technology segments into one category with a uniform 15.5% margin. That option can provide a faster, lower-cost alternative to an APA for qualifying transactions.
The policy changes also reach the digital economy. The Taxation and Other Laws (Amendment) Act, 2026 removed certain notification requirements for tax exemptions affecting foreign technology and data-center businesses, reducing administrative steps for those claims.
New reporting and investigation tools will shape the next phase
CBDT revised its FATCA and CRS Guidance Note on July 24, 2026. The update brings Central Bank Digital Currencies and crypto-assets into automatic information exchange with 120 partner jurisdictions.
The change expands the kinds of financial information that can move between tax authorities. It also places newer digital assets within the department’s cross-border reporting framework.
A separate change has raised privacy concerns among professionals. Section 508 of the 2025 law gives officials broader powers to access “virtual digital space,” including potential searches of cloud storage and social media during investigations.
The department is therefore pursuing two tracks at once: clearer rules for voluntary compliance and broader tools for checking cross-border activity. The next test will come as taxpayers apply the new forms, reporting guidance and statutory powers in live cases.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
