Executive Summary

Income Tax

• Amendment in Indian – Mauritius DTAA.
• No TDS on Interest payments to Holders of Maharajah INR Bonds issued by the New Development Bank.
• Income-tax (Seventh Amendment) Rules, 2026: Introduction of Rule 281A and Form No. 173
• Amendment to Rule 231 and Substitution of Form No. 161 for Waiver of Penalty.

Goods And Service Tax (GST)

• Circular Nos. 257/03/2026-GST to 264/10/2026 – GST
• Notifications dated 26–27 October 2026 | Practical client briefing

Companies Act 2013/ Other Laws

• Extension of Annual Filing Deadlines for FY 2025–26
• MCA Notification No. G.S.R. 863(E) – Indian Corporate Law Service Rules, 2026
• SEBI Notification No. SEBI/LAD-DOP/2026/329 dated 12 October 2026 – Amendment to LODR Regulations
• Revamp of Document Number Verification System
• Delegation of Compounding of Certain Contraventions under FEMA, 1999 to Regional Offices

• Amendment in Indian- Mauritius DTAA.

• The Central Government has notified the Protocol amending the Convention between India and Mauritius for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains and for the Encouragement of Mutual Trade and Investment.

• The Protocol was signed at Port Louis, Mauritius, on 7 March 2024, and entered into force on 10 August 2026

• Introduction of Article 27B – Entitlement to Benefits (Principal Purpose Test)

Under this benefit, treaty benefits may be denied if, based on all relevant facts and circumstances, it appears that one of the main objectives of a transaction or arrangement was to obtain tax benefits under the DTAA.

However, such treaty benefits may still be granted if it can be demonstrated that granting them is in line with the purpose and intent of the relevant provisions of the DTAA.

• No TDS on Interest payments to Holders of Maharajah INR Bonds issued by the New Development Bank.

The Central Government has notified an exemption from deduction of tax at source (TDS) on interest payments made by the New Development Bank to holders of Maharajah INR Bonds under Section 400(1) of the Income-tax Act, 2025

• Exemption from TDS – No TDS shall be deducted under Section 393(1) [Table: Sl. No. 5] or Section 393(2) [Table: Sl. No. 17], as applicable, on interest payments made by the New Development Bank to holders of Maharajah INR Bonds issued during Tax Year 2026-27 and subsequent tax years.

• Eligible Bondholders –

The exemption is available to the following categories of bondholders:

Residents of India; and

Foreign Institutional Investors (FIIs)

• The New Development Bank shall furnish information as required under Schedule VII as per the provisions of the Income-tax Rules, 2026.

• Income-tax (Seventh Amendment) Rules, 2026: Introduction of Rule 281A and Form No. 173A
• A new rule 281A has been inserted by CBDT.
• As per the newly inserted rule, any assessee claiming exemption under Schedule IV (Table Sl. Nos. 13D and 13E) i.e., tax exemption on interest income and capital gains arising from the sale, exchange, or transfer of Government Securities of the Income-tax Act, 2025, is required to furnish the prescribed information in Form No. 173A.
• A new Form No. 173A has been inserted after Form No. 173 in the Income-tax Rules 2026, prescribing the particulars to be furnished for claiming the above exemptions.

The form requires the assessee to provide the prescribed details, including relevant identification and address particulars, along with applicable financial information.

• Amendment to Rule 231 and Substitution of Form No. 161 for Waiver of Penalty.
• The words “or waiver” have been inserted after the word “imposition” in Rule 231 of the Income-tax Rules, 2026.

This amendment expands the scope of the existing provision to specifically include applications relating to waiver of penalty, in addition to matters concerning its imposition.

• The existing Form No. 161 has been substituted with a revised form titled:

“Application for seeking waiver of penalty under Section 440(2) of the Income-tax Act, 2025.”

• Circular Nos. 257/03/2026-GST to 264/10/2026-GST

The CBIC has issued eight circulars dated 26 October 2026 to operationalise and clarify selected recommendations of the 57th GST Council Meeting held on 8 October 2026. The circulars cover registration, adjudication, appeal pre-deposits, ISD, ITC and exports. The following is a practical summary for business teams.

Overall Takeaway

The circulars provide operational clarity and targeted relief in selected areas; they do not, by themselves, replace the need to examine the underlying Act, Rules, notifications and facts of each case. Businesses should prioritise reviews where the circular may unlock refunds or ITC, reduce litigation exposure, or require changes to internal GST processes.

• Notifications dated 26–27 October 2026 | Practical client briefing

The following notifications give effect to selected recommendations of the 57th GST Council Meeting. The effective dates differ; businesses should apply each change from its notified date rather than assuming that every amendment took effect immediately.

• Extension of Annual Filing Deadlines for FY 2025–26 
• The Ministry of Corporate Affairs (MCA), vide General Circular No. 05/2026 dated 24 October 2026, has provided an extension for filing specified financial statements and annual returns for FY 2025–26 without additional fees.
• The extended deadlines are 31 December 2026 for Forms AOC-4 and applicable variants and 31 January 2027 for Forms MGT-7 and MGT-7A. The relaxation does not extend the statutory timeline for holding AGMs. Companies are advised to complete their annual filings within the revised deadlines to avoid additional filing fees and ensure statutory compliance.
• MCA Notification No. G.S.R. 863(E) – Indian Corporate Law Service Rules, 2026 
• The Ministry of Corporate Affairs, vide Notification No. G.S.R. 863(E) dated 6 October 2026, notified the Indian Corporate Law Service Rules, 2026, superseding the earlier 2015 Rules.
• The Rules prescribe provisions relating to recruitment, promotion, service conditions and cadre structure of officers of the Indian Corporate Law Service. This notification marks an administrative development in the framework governing MCA’s corporate law service C. Extension of Accredited Investor Compliance Timeline for Angel Funds.
• SEBI Notification No. SEBI/LAD-DOP/2026/329 dated 12 October 2026 – Amendment to LODR Regulations 
• The Securities and Exchange Board of India (SEBI) notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2026, amending Regulation 62A of the SEBI (LODR) Regulations, 2015.
• Under the revised provision, listed entities whose non-convertible debt securities are listed on or after the amendment’s publication in the Official Gazette must list all non-convertible debt securities issued after that listing date on the stock exchange(s). The amendment also omits sub-regulations (2) and (3) of Regulation 62A and came into force upon publication in the Official Gazette on 14 October 2026.
• Revamp of Document Number Verification System

The Securities and Exchange Board of India (SEBI) has revamped its Document Number Verification System to strengthen the authentication of official letters and notices issued by SEBI. The revised system makes the subject matter of the communication a mandatory field for verification and aligns the system with the outward number format generated through SEBI’s E-Office system. Recipients can verify the authenticity of SEBI communications using the prescribed details. However, successful verification confirms the issuance of the communication and does not validate its contents.

• Delegation of Compounding of Certain Contraventions under FEMA, 1999 to Regional Offices
• The Reserve Bank of India has delegated powers to compound specified FEMA contraventions relating to overseas investments, borrowing and lending, and guarantees to designated Regional Offices.
• Applications must be submitted to the appropriate office based on the nature of the transaction and applicable jurisdiction or overseas investment identification number (UIN). The change is intended to facilitate the processing of compounding applications.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.08.2026

Executive Summary

Income Tax

• Extension of Due Date for furnishing the Tax Audit Report and Income Tax Return of persons who are subject to audit u/s 139 of the Income Tax Act, 1961.
• Section 508 of the Income-Tax Act, 2025 – Obligation to furnish statement of financial transaction or reportable account- format, procedure and guidelines for submission of statement of financial transactions (SFT-2517) for depository transactions under section 508, read with sub-rule (6) of rule 237 of the income-tax rules. 2026

Goods And Service Tax (GST)

• No. 473/12/2026-LC, Dated 21.09.2026 – Draft Warehousing Operations Regulations, 2026
• GSTN Advisory No. 672, Dated 19.09.2026 – emSigner Version 3.3 for New DSC Tokens
• GSTN Advisory No. 671, Dated 07.09.2026 – Filing of Appeals Against NIL/Zero Demand Orders

Companies Act 2013/ Other Laws

• MCA Cautions Stakeholders Against Unauthorised “MCA Signals” SMS Messages
• MCA Advisory on Nidhi Companies – NDH-4 Compliance Reiterated
• Extension of Accredited Investor Compliance Timeline for Angel Funds
• Ease of Regulatory Compliance for FPIs Investing Only in Government Securities
• Review of Position Limits and Penalty Provisions for Commodity Derivatives
• Withdrawal of Inoperative FEMA Circulars
• Strengthening Safeguards in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors

1. THE FOREIGN ASSETS OF SMALL TAXPAYERS DISCLOSURE SCHEME, 2026 (CHAPTER IV, SECTIONS 130 TO 144 OF THE FINANCE ACT, 2026, READ WITH THE FOREIGN ASSETS OF SMALL TAXPAYERS – DISCLOSURE SCHEME RULES, 2026), DATED 14-08-2026

Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 is a one-time voluntary disclosure scheme contained in Chapter IV (sections 130 to 144) of the Finance Act, 2026. It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee.

The Scheme comes into force on 16th August 2026. The last date has been fixed as 31st December 2026. No declaration can be filed after this date

An “assessee” eligible under the scheme is one —

• who is resident in India, (as per section 6 of the Income-tax Act, 1961), in the relevant previous year; or
• who is a non-resident, or resident but not ordinarily resident (RNOR), [as per section 6(6) of the Income-tax Act, 1961], in the relevant previous year, but was resident in India either-
  1. in the previous year to which the undisclosed foreign income under section 4 of the Black Money Act, 2015 relates, or
  2. in the previous year in which the undisclosed asset located outside India was acquired.

A person being a non-resident but was resident in India either

• in the year to which the undisclosed income relates; or
• in the year in which the undisclosed asset was acquired can make a declaration.

A declaration may be made where the assessee —

• has failed to furnish a return under section 139 of the Income-tax Act, 1961; or
• has failed to disclose the asset or income in return furnished before the scheme commenced; or
• Such assets or income has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

There are two broad categories of declaration —

• an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax. [Section 133 – Table: Sl. No. 1]
• an asset located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant Schedule of the return.[Section 133 – Table: Sl. No. 2]

• No. 473/12/2026-LC, Dated 21.09.2026 – Draft Warehousing Operations Regulations, 2026

CBIC has invited stakeholder comments on the Draft Warehousing Operations Regulations, 2026, with a 15-day period for submission of suggestions.

Key Highlights:

• Comments invited on the proposed warehousing regulations.
• Suggestions to be submitted in the prescribed format within 15 days.
• Covers proposed operational and compliance requirements for customs warehousing.

Impact:
Warehousing operators, importers, exporters and customs stakeholders should review the draft and submit relevant suggestions within the prescribed timeline.

• GSTN Advisory No. 672, Dated 19.09.2026 – emSigner Version 3.3 for New DSC Tokens

GSTN has introduced emSigner Version 3.3 for compatibility with new DSC tokens issued from 21.09.2026.

Key Highlights:

• New DSC tokens issued from 21.09.2026 require emSigner v3.3.
• Existing valid DSCs can continue to be used until expiry.
• Updated emSigner is required for smooth DSC-based GST activities.

Impact:
Taxpayers obtaining new DSC tokens should install emSigner v3.3 to avoid difficulties in GST portal filings and other DSC-based activities

• GSTN Advisory No. 671, Dated 07.09.2026 – Filing of Appeals Against NIL/Zero Demand Orders

GSTN has enabled Form GST APL-01 filing for specified cases involving NIL or Zero demand orders, where the taxpayer continues to dispute the underlying tax liability.

Key Highlights:

• Portal restriction on filing APL-01 against NIL/Zero demand orders removed for eligible cases.
• Applicable where payment was made before issuance of the demand order.
• Taxpayers can now pursue the appellate remedy through Form GST APL-01.

Impact:
Provides taxpayers an avenue to challenge the underlying tax liability even where the demand reflected in the order is NIL/Zero.

• MCA Cautions Stakeholders Against Unauthorised “MCA Signals” SMS Messages
  The Ministry of Corporate Affairs cautioned stakeholders about unauthorised SMS messages referring to “MCA Signals” and directing recipients to an external website to view company reports. MCA advised stakeholders to verify the authenticity of communications and not to rely on such unauthorised messages.

Companies and professionals should rely only on communications and services available through the official MCA portal and remain alert to fraudulent communications.

• MCA Advisory on Nidhi Companies – NDH-4 Compliance Reiterated

MCA issued an advisory cautioning the public regarding Nidhi Companies, particularly companies promising unusually high returns. MCA reiterated that companies desirous of functioning as Nidhis are required to file Form NDH-4 for declaration/recognition as a Nidhi, as applicable.

MCA also stated that deposits accepted by Nidhi Companies are not insured by DICGC and advised the public to independently verify whether a company has been declared as a Nidhi by the Central Government.

• Extension of Accredited Investor Compliance Timeline for Angel Funds

SEBI extended the timeline for existing Angel Funds registered on or before 10 September 2025 to comply with the Accredited Investor mandate. The deadline has been extended from 8 September 2026 to 31 March 2027. During the extended transition period, the existing limit of 200 non-Accredited Investors continues to apply.

• Ease of Regulatory Compliances for FPIs Investing Only in Government Securities

On September 7, 2026, SEBI issued a circular aimed at easing regulatory compliances for Foreign Portfolio Investors (FPIs) investing exclusively in Government Securities. Under the revised framework, such FPIs are exempted from furnishing investor group details, thereby reducing their reporting and compliance requirements. The measure is intended to simplify the regulatory process for FPIs whose investments are limited to Government Securities. The circular is effective immediately and requires the relevant intermediaries, including custodians, depositories and Designated Depository Participants, to make necessary system and process changes.

• Review of Position Limits and Penalty Provisions for Commodity Derivatives

On September 9, 2026, SEBI revised the framework governing client-level position limits and penalties for breaches in the commodity derivatives segment. The revised framework introduces different position limits for Broad, Narrow and Sensitive commodities, at 2%, 1% and 0.5%, respectively. The circular also provides a revised mechanism for penalties in cases where prescribed position limits are breached. Clients are required to reduce excess positions within the prescribed timeline, failing which the concerned exchange may undertake square-off of the excess position. The revised framework is aimed at strengthening risk management and promoting orderly trading in the commodity derivatives market.

• Withdrawal of Inoperative FEMA Circulars

On September 8, 2026, the Reserve Bank of India (RBI) issued a circular reviewing the circulars issued under the Foreign Exchange Management Act, 1999 (FEMA). As part of its ongoing initiative to rationalise and simplify the FEMA regulatory framework, RBI withdrew seven circulars that had become inoperative due to subsequent amendments, redundancy, overlap or supersession by newer regulatory directions. The measure is intended to make the FEMA framework more streamlined and reduce reliance on outdated regulatory instructions.

• Strengthening Safeguards in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors

On September 12, 2026, IBBI published a Discussion Paper titled “Strengthening safeguards in the Insolvency Resolution Process for Personal Guarantors to Corporate Debtors.” The paper examines areas where the existing framework for insolvency resolution of personal guarantors may require additional safeguards. It considers measures to strengthen creditor protection, transparency and procedural safeguards during the resolution process involving personal guarantors. The discussion paper forms part of IBBI’s ongoing review of the insolvency framework and seeks stakeholder views on possible regulatory improvements. As it is a discussion paper, the proposals contained in it should be distinguished from provisions that have already been made effective through regulations or circulars.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 30.09.2026

Executive Summary

Income Tax

• The Foreign Assets of Small Taxpayers Disclosure Scheme, 2026

Goods And Service Tax (GST)

• Instruction No. 01/2026-GST, Dated 03.08.2026 – Coordination with State Mining Authorities
• Advisory Revision of Timeline for Amendment of Aggregate Annual Turnover (AATO), Dated 01.07.2026 (Implemented / Review Period: 1 August 2026 to 15 August 2026.
• Office Order No. 4/GSTAT/PB/2026, Dated 29.07.2026 – Reconstitution of Benches and Revised Classification of Categories of Cases, Dated 01.08.2026

Companies Act 2013/ Other Laws

• MCA Notifies Companies (Indian Accounting Standards) Amendment Rules, 2026
• Revision in Name Reservation and E-Form Resubmission Timelines
• Andhra Pradesh Notifies Occupational Safety, Health and Working Conditions Rules, 2026 (6 August 2026)

1. THE FOREIGN ASSETS OF SMALL TAXPAYERS DISCLOSURE SCHEME, 2026 (CHAPTER IV, SECTIONS 130 TO 144 OF THE FINANCE ACT, 2026, READ WITH THE FOREIGN ASSETS OF SMALL TAXPAYERS – DISCLOSURE SCHEME RULES, 2026), DATED 14-08-2026

Foreign Assets of Small Taxpayers – Disclosure Scheme, 2026 is a one-time voluntary disclosure scheme contained in Chapter IV (sections 130 to 144) of the Finance Act, 2026. It enables eligible taxpayers to declare certain undisclosed foreign assets, undisclosed foreign income, or undeclared foreign assets, on payment of a specified tax or fee.

The Scheme comes into force on 16th August 2026. The last date has been fixed as 31st December 2026. No declaration can be filed after this date

An “assessee” eligible under the scheme is one —

• who is resident in India, (as per section 6 of the Income-tax Act, 1961), in the relevant previous year; or
• who is a non-resident, or resident but not ordinarily resident (RNOR), [as per section 6(6) of the Income-tax Act, 1961], in the relevant previous year, but was resident in India either-
  1. in the previous year to which the undisclosed foreign income under section 4 of the Black Money Act, 2015 relates, or
  2. in the previous year in which the undisclosed asset located outside India was acquired.

A person being a non-resident but was resident in India either

• in the year to which the undisclosed income relates; or
• in the year in which the undisclosed asset was acquired can make a declaration.

A declaration may be made where the assessee —

• has failed to furnish a return under section 139 of the Income-tax Act, 1961; or
• has failed to disclose the asset or income in return furnished before the scheme commenced; or
• Such assets or income has escaped assessment within the meaning of section 147 of the Income-tax Act, 1961.

There are two broad categories of declaration —

• an undisclosed asset located outside India or undisclosed foreign income which was not offered to tax. [Section 133 – Table: Sl. No. 1]
• an asset located outside India, which was already offered to tax or was acquired when the assessee was a non-resident, but not declared in the relevant Schedule of the return.[Section 133 – Table: Sl. No. 2]

3. INSTRUCTION NO. 01/2026-GST, DATED 03.08.2026 – COORDINATION WITH STATE MINING AUTHORITIES

CBIC has issued instructions for coordination between CGST authorities and State Mining Authorities to facilitate information sharing regarding illegal mining and transportation of minerals.

Key Highlights:

• Strengthened information sharing between CGST and State Mining Authorities.
• Focus on illegal mining and transportation of minerals.
• Information may be analyzed to identify potential GST evasion and non-compliance.

Impact:

Mining and mineral businesses may face increased GST scrutiny. Proper invoices, reporting and

E-way bill compliance will be important.

1. ADVISORY REVISION OF TIMELINE FOR AMENDMENT OF AGGREGATE ANNUAL TURNOVER (AATO), DATED 01.07.2026 (IMPLEMENTED / REVIEW PERIOD: 1 AUGUST 2026 TO 15 AUGUST 2026)

Jurisdictional tax officers reviewed the AATO details amended by taxpayers for FY 2025-26 during the prescribed review period in August 2026.

Key Highlights:

• Amended AATO data was reviewed by jurisdictional tax officers.
• Review period: 1 August to 15 August 2026.
• The process focuses on ensuring the accuracy of turnover information available on the GST Portal.

Impact:

Businesses should ensure that their AATO details are accurate and consistent with their GST returns and financial records to avoid discrepancies or queries.

29. OFFICE ORDER NO. 4/GSTAT/PB/2026, DATED 29.07.2026 – RECONSTITUTION OF BENCHES AND REVISED CLASSIFICATION OF CATEGORIES OF CASES, DATED 01.08.2026

GSTAT reconstituted its benches and revised the classification and allocation of cases to streamline the handling of GST appeals.

Key Highlights:

• GSTAT benches were reconstituted under a revised operational structure.
• Case categories and allocation procedures were revised.
• Pending matters may be reassigned under the new framework.

       Impact:
Taxpayers and professionals should verify the appropriate GSTAT Bench and case category while filing or pursuing appeals. The restructuring is expected to improve the efficient disposal of GST disputes.

1. MCA NOTIFIES COMPANIES (INDIAN ACCOUNTING STANDARDS) AMENDMENT RULES, 2026

The Ministry of Corporate Affairs (MCA), vide Notification G.S.R. 725(E) dated 12 August 2026, notified the Companies (Indian Accounting Standards) Amendment Rules, 2026. These amendments introduce changes to Ind AS 101, Ind AS 107, Ind AS 109, Ind AS 110 and Ind AS 7, covering areas such as classification and measurement of financial instruments, hedge accounting, nature-dependent electricity contracts, electronic settlement of financial liabilities, enhanced disclosure requirements and transition provisions. The amendments are largely aligned with recent international accounting developments and are applicable for annual reporting periods beginning on or after 1 April 2026, with certain provisions becoming effective from the date of publication in the Official Gazette. Companies following Ind AS should evaluate the impact on financial reporting, disclosures and accounting policies for FY 2026-27.

1. REVISION IN NAME RESERVATION AND E-FORM RESUBMISSION TIMELINES

MCA has revised the timelines relating to the extension of validity of reserved names and the resubmission of e-forms filed on the MCA portal. The revision seeks to streamline incorporation and post-incorporation filing processes and provide greater clarity regarding the permissible period available for rectifying defects in filings. These changes are expected to improve efficiency in processing e-forms and reduce avoidable delays in corporate transactions.

1. ANDHRA PRADESH NOTIFIES OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS RULES, 2026 (6 AUGUST 2026)

The Government of Andhra Pradesh notified the Occupational Safety, Health and Working Conditions (OSHWC) Rules, 2026 under the Occupational Safety, Health and Working Conditions Code, 2020. The Rules supersede several existing state labour enactments and provide a consolidated framework relating to workplace safety, welfare, working conditions, licensing and compliance obligations. Employers operating in Andhra Pradesh should review the new requirements and update their internal policies, registers, compliance systems and health and safety practices accordingly.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.08.2026

Executive Summary

Income Tax

• Guidelines for compulsory selection of returns for complete scrutiny

Goods And Service Tax (GST)

• GSTN Advisory dated 09.06.2026 – Extension of Timeline for Mandatory ‘Ship-to GSTIN’ and Voluntary Closure of E-Way Bills
• Notification S.O. 4220 (E) dated 17.09.2025 – Section 112 of the Central Goods and Services Tax Act, 2017 – Extension of Time Limit for Filing Appeals before GST Appellate Tribunal (GSTAT)
• Section 11A of the Central Goods and Services Tax Act, 2017 – Waiver of Past GST Dues (Rules under Drafting by CBIC), Dated 25.05.26
• CBIC Advisory dated 11.06.2026 – Introduction of Two-Factor Authentication (2FA) for Central Excise / HSNS Cess / Service Tax & SBS Taxpayers

Companies Act 2013/ Other Laws

• Extension of Due Date for Filing Form DPT-3
• Extension of Name Reservation & Resubmission Period
• Companies (Registered Valuers and Valuation) Amendment Rules, 2026
• SEBI Circular on Strengthening Compliance & Operational Guidelines for Intermediaries
• Reserve Bank of India circular – prudential norms on credit exposure
• IFSCA circular on Annual Compliance Audit reporting for capital market intermediaries
• Reporting of FCNR(B) Deposits & ECB Arrangements
• IBBI circular on revised formats under CIRP Regulations
• IBBI issues Guidelines for conducting Valuation under IBC
• IBBI notifies CIRP (Third Amendment) Regulations, 2026

1. GUIDELINES FOR COMPULSORY SELECTION OF RETURNS FOR COMPLETE SCRUTINY DURING THE FINANCIAL YEAR 2026-27 [04-06-2025]

The parameters for compulsory selection of returns for complete scrutiny during Financial Year 2026-27 and procedure for compulsory selection in such cases are prescribed as under:

9. GSTN ADVISORY DATED 09.06.2026 – EXTENSION OF TIMELINE FOR MANDATORY ‘SHIP-TO GSTIN’ AND VOLUNTARY CLOSURE OF E-WAY BILLS

GSTN has extended the implementation date for mandatory capture of ‘Ship-to GSTIN’ in Bill-to/Ship-to transactions and the Voluntary Closure of E-Way Bills from 15 June 2026 to 1 August 2026.

Key Highlights:

• Mandatory capture of ‘Ship-to GSTIN’ deferred to 1 August 2026.
• Facility for Voluntary Closure of E-Way Bills is also effective from 1 August 2026.
• Applicable to taxpayers generating E-Way Bills through the portal and APIs.
• Provides additional time for ERP and API integration updates.
• Businesses should validate customer master data before implementation.

Impact:
Businesses should use the extended timeline to update their ERP systems, API integrations and internal processes to ensure seamless E-Way Bill generation and avoid compliance issues from 1 August 2026.

17. NOTIFICATION S.O. 4220 (E) DATED 17.09.2025 – SECTION 112 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – EXTENSION OF TIME LIMIT FOR FILING APPEALS BEFORE GST APPELLATE TRIBUNAL (GSTAT)

The Government has prescribed a special time limit up to 30 June 2026 for filing appeals before the GST Appellate Tribunal (GSTAT) in cases where the Order-in-Appeal was communicated before 1 April 2026. For orders communicated on or after 1 April 2026, the normal limitation period under Section 112 shall apply.

Key Highlights:

• Applicable to appeals against Orders-in-Appeal communicated before 1 April 2026.
• Last date for filing such pending appeals before GSTAT is 30 June 2026.
• Normal limitation period of 3 months continues for orders communicated on or after 1 April 2026.
• Ensures taxpayers receive an opportunity to file appeals due to the delayed operationalization of GSTAT.
• Applicable across all GSTAT Principal and State Benches.

Impact:
Businesses having pending GST appellate matters should review all Orders-in-Appeal received before 1 April 2026 and ensure appeals are filed on or before 30 June 2026. Failure to file within the prescribed timeline may result in the loss of the statutory right to appeal.

25. SECTION 11A OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – WAIVER OF PAST GST DUES (RULES UNDER DRAFTING BY CBIC), DATED 25.05.26

CBIC is drafting the rules to operationalize Section 11A of the CGST Act, 2017, which empowers the Government, on the recommendation of the GST Council, to waive GST dues that arise due to a generally prevalent trade practice followed by an industry. The provision was inserted through the Finance (No. 2) Act, 2024 and is yet to be implemented through detailed rules and notifications.

Key Highlights:

• Enables waiver of past GST dues for notified industries.
• Applicable where non-payment or short payment occurred due to a generally prevalent trade practice.
• Relief can be granted only on the recommendation of the GST Council.
• Detailed rules and implementation framework are under preparation by CBIC.
• No notification or circular has been issued yet for operationalizing the provision.

Impact:
Once notified, eligible businesses may receive relief from historical GST demands arising from industry-wide trade practices, reducing litigation and providing greater certainty in tax compliance.

11. CBIC ADVISORY DATED 11.06.2026 – INTRODUCTION OF TWO-FACTOR AUTHENTICATION (2FA) FOR CENTRAL EXCISE / HSNS CESS / SERVICE TAX & SBS TAXPAYERS

CBIC has introduced Two-Factor Authentication (2FA) for users logging into the ACES/CBIC portal for Central Excise, HSNS Cess, Service Tax and SBS taxpayers to enhance portal security.

Key Highlights:

• 2FA made mandatory at the time of user login.
• Applicable to Central Excise, HSNS Cess, Service Tax and SBS taxpayers.
• Login requires OTP verification in addition to user credentials.
• Enhances security against unauthorized access.
• Registered mobile numbers and email should be updated for smooth authentication.

Impact:
Businesses should ensure that authorised users’ contact details are updated on the portal to avoid login disruptions. The new authentication mechanism enhances data security and safeguards sensitive tax information.

1. EXTENSION OF DUE DATE FOR FILING FORM DPT-3:

The Ministry of Corporate Affairs has via General Circular No. 02/2026 dated 20 June 2026 extended the due date for filing Form DPT-3 (Return of Deposits) for FY 2025–26 till 31 July 2026. The extension provides relief to companies facing compliance challenges and ensures adequate time for accurate filing without additional penalties.

1. EXTENSION OF NAME RESERVATION & RESUBMISSION PERIOD

In view of technical issues (including data centre disruptions), MCA has extended the validity of reserved company names and resubmission timelines up to 10 July 2026. This ensures that stakeholders are not adversely impacted due to system-related delays.

1. COMPANIES (REGISTERED VALUERS AND VALUATION) AMENDMENT RULES, 2026

The Ministry of Corporate Affairs (MCA) amended the Companies (Registered Valuers and Valuation) Rules, 2017 by introducing a minimum paid-up share capital requirement of ₹25 lakh for Registered Valuers Organisations (RVOs). Existing RVOs that do not meet this requirement have been granted a transition period up to 31 March 2028 to comply. This move aims to strengthen the financial credibility and operational capacity of valuation entities.

1. SEBI CIRCULAR ON STRENGTHENING COMPLIANCE & OPERATIONAL GUIDELINES FOR INTERMEDIARIES

The Securities and Exchange Board of India (SEBI) has issued Circular No. HO/38/12/11(5)2026-MIRSD-POD/I/14660/2026 under the MIRSD (Market Intermediaries Regulation and Supervision Department), with the objective of streamlining regulatory requirements and enhancing compliance standards for intermediaries operating in the securities market. The circular forms part of SEBI’s broader initiative to consolidate and rationalize operational guidelines, ensuring greater transparency, investor protection, and uniformity in regulatory practices. It emphasizes adherence to updated procedures, improved reporting mechanisms, and alignment with existing master circulars issued in 2026 for market intermediaries such as research analysts, investment advisers, and other registered entities.

A. RESERVE BANK OF INDIA CIRCULAR – PRUDENTIAL NORMS ON CREDIT EXPOSURE

The Reserve Bank of India issued this circular to further strengthen prudential norms relating to credit exposure and risk management for banks and financial institutions. The circular primarily focuses on refining existing regulatory frameworks to ensure better monitoring of borrower exposure, improved credit discipline, and enhanced transparency in lending practices. It reinforces the importance of adherence to prescribed exposure limits and prudent credit appraisal mechanisms in order to mitigate systemic risks in the banking sector.

B. IFSCA CIRCULAR ON ANNUAL COMPLIANCE AUDIT REPORTING FOR CAPITAL MARKET INTERMEDIARIES

The International Financial Services Centres Authority (IFSCA) has issued a circular prescribing a standardized reporting format and compliance norms for the Annual Compliance Audit of Capital Market Intermediaries (CMIs) operating in IFSCs. As per the circular, all CMIs are required to submit an Annual Compliance Audit Report (ACAR) along with a detailed Annual Compliance Audit Checklist (ACAC) in the specified format to IFSCA by 30th September every year for the preceding financial year. Additionally, certain intermediaries such as broker dealers, clearing members, and depository participants are also required to submit these reports to their respective Market Infrastructure Institutions. This circular aims to enhance regulatory oversight, ensure uniform compliance standards, and strengthen governance practices across capital market intermediaries in IFSCs.

C. REPORTING OF FCNR(B) DEPOSITS & ECB ARRANGEMENTS

The Reserve Bank of India (RBI) vide A.P. (DIR Series) Circular No. 15 dated June 2026 introduced updated reporting requirements relating to Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits and External Commercial Borrowings (ECB). The circular mandates Authorised Dealer (AD) Category-I banks to ensure timely and accurate submission of prescribed returns under FEMA. It further clarifies that data from 8 June 2026 onwards must be incorporated in the first reporting cycle due on 22 June 2026, thereby strengthening monitoring of foreign currency liabilities and borrowings. These directions have been issued under the provisions of the Foreign Exchange Management Act, 1999, with the objective of improving transparency and regulatory oversight in cross-border transactions.

1. IBBI CIRCULAR ON REVISED FORMATS UNDER CIRP REGULATIONS

The Insolvency and Bankruptcy Board of India (IBBI) has issued Circular No. IBBI/CIRP/94/2026 prescribing revised and standardized formats under the Insolvency Resolution Process for Corporate Persons (CIRP) Regulations, 2016, pursuant to the Third Amendment Regulations, 2026. The circular notifies updated forms for various stages of the CIRP, including public announcement (Form A), consent of resolution professionals (Forms AA & AB), claims submission by creditors (Forms B to F), withdrawal of CIRP (Form FA), invitation for expression of interest (Form G), approval of resolution plan (Form GA), and compliance certificate (Form H). These formats are now required to be used by insolvency professionals and stakeholders to ensure uniformity, procedural consistency, and improved efficiency in insolvency proceedings. The circular also reflects a shift towards notifying forms through circulars rather than embedding them in regulations, thereby allowing greater flexibility and timely updates in documentation requirements.

2. IBBI ISSUES GUIDELINES FOR CONDUCTING VALUATION UNDER IBC

The Insolvency and Bankruptcy Board of India (IBBI) has issued comprehensive Guidelines for Conducting Valuation under the Insolvency and Bankruptcy Code, 2016, applicable with immediate effect. The circular mandates standardised formats, detailed documentation, and uniform reporting practices for valuation assignments undertaken under various insolvency processes including CIRP, liquidation, and voluntary liquidation. It aims to bring consistency, transparency, and comparability in valuation reports, addressing earlier variations in methodologies and assumptions. Registered valuers are now required to maintain proper working papers, clearly justify valuation approaches, and adhere to prescribed reporting standards, thereby enhancing the reliability and credibility of valuation outcomes within the insolvency framework.

3. IBBI NOTIFIES CIRP (THIRD AMENDMENT) REGULATIONS, 2026

The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency Resolution Process for Corporate Persons (CIRP) (Third Amendment) Regulations, 2026, pursuant to the amendments introduced under the Insolvency and Bankruptcy Code (Amendment) Act, 2026. The amendments are aimed at enhancing transparency, improving information availability, and reducing litigation during the insolvency process. Key changes include mandatory comprehensive disclosures at the initiation stage by operational creditors and corporate applicants, such as GST records, e-way bills, details of part-payments, guarantees, and ongoing proceedings. The amendments also seek to streamline insolvency proceedings and align regulatory provisions with the updated framework under the Code, including provisions relating to the treatment of guarantors’ assets, thereby strengthening the overall efficiency and credibility of the CIRP mechanism.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 30.06.2026

Executive Summary

Income Tax

• ITR Filing Utilities are available on Income Tax Portal for AY 2026-27.
• Offline utility for Forms 145 & 146 has been enabled on Income Tax Portal.
• Challan forms for Tax Year 2026-27 are live on Income Tax Portal.

Goods And Service Tax (GST)

• Instruction F.No.GSTAT/Pr.bench/Portal/125/25-26, Section 112 Central Goods and Services Tax Act, 2017 – Appellate Tribunal – Appeals to – Instructions to be followed by Security Officer, Dated 14.05.2026
• Corrigendum to Notification No. 02/2026 – Central Tax Correction of HSN Tariff Classification for Specified Beverage Products under IGST Rate Notifications (HSN Code amended from 2202 99 90 to 2202 91 00), Dated 08.05.2026
• GSTAT Administrative Circular – Office Order No. 3/GSTAT/PB/2026 Classification and Allocation of Appeals, Dated 14.05.2026
• GSTN Advisory No. 661 – Enhancements in the E-Way Bill (EWB) Portal, Dated on 21.05.2026

Companies Act 2013/ Other Laws

• Corporate Social Responsibility implementation through Zero Coupon Zero Principal instrument
• Ease of investing – modified nomination norms for Demat Accounts & Mutual Fund folios
• Master circular on surveillance of Securities Market
• RBI introduces cooling-off period to strengthen governance in rural Co-Operative Banks
• Key provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2026 brought into force.
• IBBI simplifies valuation requirements for MSMEs under CIRP
• IBBI rationalises valuation framework under Pre-Packaged Insolvency Process.
• IBBI strengthens governance framework for Insolvency Professional Agencies
• Final Rules Notified Under Four Labour Codes

A. ITR FILING UTILITIES FOR AY 2026-27 [29-05-2026]

1. The Income Tax Department officially enabled online filing and Excel utilities for ITR-1 and ITR-4 on the e-Filing Portal on May 15, 2026, with offline utilities following on May 20, 2026.
2. Online filing and Excel utility for ITR-2 were enabled on May 26, 2026, and the offline utility was made available on May 29, 2026.

B. OFFLINE UTILITY FOR FORM 145 & 146 HAS BEEN ENABLED [29-05-2026]

1. Offline Utility for Form 145 and Form 146 has been enabled on the e-Filing Portal. Users can download, fill, and submit the forms directly through the utility available under “Downloads —> Income tax Forms —–> Income Tax Act 2025”.

C. CHALLAN FORMS FOR TAX YEAR 2026-27 [30-05-2026]

1. New challan forms are live on e-Filing portal for tax payments under the Income Tax Act, 2025. Users are advised to make payments using the new challans only for Tax Year 2026-27. Please refer latest updates for more details.

A. Instruction F.No.GSTAT/Pr.bench/Portal/125/25-26, Section 112 Central Goods and Services Tax Act, 2017 – Appellate Tribunal – Appeals to – Instructions to be followed by Security Officer, Dated 14.05.2026

Security Protocols for GST Appellate Tribunal Premises

GSTAT issued instructions prescribing duties and responsibilities of Security Officers at GSTAT premises to ensure secure handling of appeal records, visitor management, access control, and smooth functioning of Tribunal proceedings.

• Applicable to GSTAT Principal Bench and State Benches.
• Prescribes entry, access control, and visitor verification procedures
• Ensures protection of appeal records and confidential documents.
• Provides guidelines for the movement of litigants, advocates, and departmental officers.
• Strengthens administrative and operational security at GSTAT premises.

Impact:
Businesses involved in GST litigation will benefit from improved security and organized tribunal operations, leading to smoother hearings, better protection of confidential business information, and reduced chances of procedural disruptions during appeal proceedings.

B. Corrigendum to Notification No. 02/2026 – Central Tax Correction of HSN Tariff Classification for Specified Beverage Products under IGST Rate Notifications (HSN Code amended from 2202 99 90 to 2202 91 00), Dated 08.05.2026

Correction in Notification Empowering GSTAT Principal Bench as National Appellate Authority for Advance Ruling (NAAAR)

CBIC issued a corrigendum correcting the notification number appearing in Notification No. 02/2026 – Central Tax relating to the designation of the GSTAT Principal Bench as the National Appellate Authority for Advance Ruling.

• Corrected clerical error in the original notification
• Clarified reference to Notification No. 02/2026 – Central Tax.
• No change in legal provisions or effective date.
• Continue authorization of GSTAT Principal Bench to hear appeals against conflicting Advance Rulings.

Impact:
Businesses operating in multiple States now have greater certainty regarding the appellate mechanism for conflicting Advance Rulings. This helps in achieving uniform GST treatment across locations, reducing tax disputes and improving business planning.

C. GSTAT Administrative Circular – Office Order No. 3/GSTAT/PB/2026 Classification and Allocation of Appeals, Dated 14.05.2026

Framework for Classification and Allocation of GST Appeals Across GSTAT Benches

GSTAT issued administrative instructions for systematic classification, allocation, and hearing of GST appeals before various Tribunal Benches.

• Appeals classified into categories such as ITC, classification, valuation, refund, registration, and penalty matters.
• All appeals to be initially placed before a Division Bench
• Standardized allocation of cases across GSTAT Benches.
• Jurisdiction and case management procedures streamlined.
• Hybrid, virtual, and physical hearing facilities are enabled.

Impact:
Businesses can expect faster disposal of GST disputes, improved transparency in appeal allocation, reduced litigation timelines, and lower legal and travel costs through virtual hearing facilities. Quicker resolution of disputes helps reduce blockage of working capital and business uncertainty.

D. GSTN Advisory No. 661 – Enhancements in the E-Way Bill (EWB) Portal, dated 21.05.2026

Enhancements in E-Way Bill Portal Functionality

GSTN introduced new functionalities and validation controls in the E-Way Bill Portal to improve compliance monitoring and ease of use.

• Mandatory reporting of “Ship-To GSTIN” in applicable Bill-To/Ship-To transactions.
• Voluntary E-Way Bill Closure facility introduced.
• API specifications updated for ERP/GSP/ASP integration.
• Enhanced validation checks to reduce data-entry errors.
• Rollout planned up to 15.06.2026.

Impact:
Businesses involved in the movement of goods will experience better tracking and documentation accuracy, reducing the risk of E-Way Bill mismatches, detention of goods, penalties, and compliance notices. The voluntary closure facility also helps maintain accurate records of completed consignments and strengthens GST compliance.

A. CORPORATE SOCIAL RESPONSIBILITY IMPLEMENTATION THROUGH ZERO COUPON ZERO PRINCIPAL INSTRUMENT:

The Ministry of Corporate Affairs has notified the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026, effective from 27 May 2026. The amendment introduces the concepts of “Not for Profit Organization” and “Zero Coupon Zero Principal (ZCZP) Instrument” into the CSR framework, enabling companies to undertake CSR activities through investments in ZCZP instruments issued by eligible NPOs listed on the Social Stock Exchange. Companies may allocate up to 10% of their annual CSR expenditure through such instruments and will be exempt from conducting impact assessments for projects funded through them. The rules also prescribe conditions for NPOs regarding project duration, utilization of funds, and transfer of unspent amounts to Schedule VII funds upon termination of listing, thereby strengthening transparency and accountability in CSR implementation.

B. EASE OF INVESTING – MODIFIED NOMINATION NORMS FOR DEMAT ACCOUNTS & MUTUAL FUND FOLIOS

The Securities and Exchange Board of India (SEBI) has issued this circular addressed to Asset Management Companies (AMCs) of Mutual Funds, their Registrars and Transfer Agents (RTAs), Recognized Depositories, and Depository Participants regarding modifications in nomination norms for demat accounts and mutual fund folios. This follows SEBI’s earlier circular dated January 10, 2025, which introduced revised nomination facilities effective from March 01, 2025, aimed at simplifying investor onboarding and reducing unclaimed financial assets. However, based on stakeholder representations highlighting certain operational difficulties in implementation, SEBI has reviewed the framework and, after public consultation feedback, has decided to further ease and refine the nomination process to improve investor convenience and streamline compliance across the securities market ecosystem.

C. MASTER CIRCULAR ON SURVEILLANCE OF SECURITIES MARKET

The Securities and Exchange Board of India (SEBI) has issued an updated Master Circular consolidating all directions relating to surveillance of the securities market for better accessibility and regulatory clarity for all stakeholders, including stock exchanges, depositories, listed companies, intermediaries, and fiduciaries under the SEBI (Prohibition of Insider Trading) Regulations, 2015. This updated circular incorporates key provisions from earlier circulars relating to financial disincentives for surveillance lapses at market infrastructure institutions, permissions regarding subscription to non-convertible securities during trading window closures, and extensions of automated trading window restrictions to immediate relatives of designated persons during financial result declarations. With this consolidation, all earlier circulars covered under the appendix stand rescinded to the extent of surveillance-related provisions; however, actions already taken, applications pending, and rights or liabilities accrued under the previous circulars shall remain valid and enforceable as if those circulars continue to be in force. This Master Circular has been issued under Section 11(1) of the SEBI Act, 1992 to strengthen investor protection and enhance the regulatory framework governing surveillance in the Indian securities market.

A. RBI INTRODUCES COOLING-OFF PERIOD TO STRENGTHEN GOVERNANCE IN RURAL CO-OPERATIVE BANKS

The Reserve Bank of India (RBI) has issued the Rural Co-operative Banks (Governance) Amendment Directions, 2026, effective immediately from May 25, 2026, to curb practices that undermine statutory tenure limits of directors in State and Central Co-operative Banks. The amendment introduces a mandatory three-year cooling-off period after completion of a continuous ten-year tenure on the Board of a Rural Co-operative Bank, before a director can be reappointed in any capacity through election, co-option, or otherwise. During this cooling-off period, the individual may only remain associated with the bank as a member or customer. The clarification also defines how continuous tenure is to be calculated, ensuring stricter compliance with governance norms and reinforcing the intent of existing legal provisions.

A. KEY PROVISIONS OF THE INSOLVENCY AND BANKRUPTCY CODE(AMENDMENT) ACT, 2026 BROUGHT INTO FORCE

The Central Government has notified 26 May 2026 as the effective date for the enforcement of several significant provisions of the Insolvency and Bankruptcy Code (Amendment) Act, 2026. Through Notification S.O. 2625(E) dated 22 May 2026, a wide range of amendments, including Sections 2 to 6, 8 to 33, 35 to 39, 41, 43 to 44, 46, 48 to 59, 61 to 66, 68, and specified provisions of Sections 69, 70 and 72, have been brought into operation. The notification marks a major step in implementing the amended insolvency framework, aimed at enhancing the efficiency, transparency, and effectiveness of India’s insolvency resolution process.

B. IBBI SIMPLIFIES VALUATION REQUIREMENTS FOR MSMEs UNDER CIRP

The Insolvency and Bankruptcy Board of India (IBBI), through the Insolvency Resolution Process for Corporate Persons (Second Amendment) Regulations, 2026, has amended Regulation 27 to streamline the valuation process for MSMEs undergoing Corporate Insolvency Resolution Process (CIRP). Effective from 19 May 2026, the amendment provides that, for corporate debtors classified as Micro, Small and Medium Enterprises (MSMEs), the Resolution Professional shall appoint only one set of registered valuers by default. A second set of valuers may be appointed only if the Committee of Creditors records specific reasons in writing. The change is expected to reduce compliance costs and expedite insolvency proceedings for MSMEs.

C. IBBI RATIONALISES VALUATION FRAMEWORK UNDER PRE-PACKAGED INSOLVENCY PROCESS

The Insolvency and Bankruptcy Board of India (IBBI) has notified the Pre-Packaged Insolvency Resolution Process (Second Amendment) Regulations, 2026, introducing significant changes to the valuation framework under pre-pack insolvency proceedings. The amendment substitutes Regulation 38 to provide for the appointment of a single set of registered valuers by default, with the Committee of Creditors retaining the option to appoint two sets of valuers for recorded reasons. It also clarifies eligibility restrictions for valuers and revises Regulation 39 to streamline the methodology for determining fair value and liquidation value where one or two sets of valuers are appointed. These changes are aimed at enhancing efficiency, reducing procedural complexity, and ensuring greater consistency in valuation outcomes during the pre-packaged insolvency resolution process.

D. IBBI STRENGTHENS GOVERNANCE FRAMEWORK FOR INSOLVENCY PROFESSIONAL AGENCIES

The Insolvency and Bankruptcy Board of India (IBBI) has notified the Model Bye-Laws and Governing Board of Insolvency Professional Agencies (Amendment) Regulations, 2026, introducing key changes to enhance governance and oversight of Insolvency Professional Agencies (IPAs). The amendment to Regulation 5 mandates the inclusion of a nominee director appointed by the Board on the governing board of IPAs, along with revised eligibility and composition norms for directors, including clarity on independent director requirements. It also provides that the second term of key officials such as the managing director will be subject to satisfactory performance review and prior approval of the Board. Additionally, Regulation 5A now requires IPAs to submit at least two names to the Board for approval of appointment or renewal of the managing director at least one month before the expiry of the existing tenure, thereby strengthening regulatory oversight and ensuring better governance standards.

A. FINAL RULES NOTIFIED UNDER FOUR LABOUR CODES

The Ministry of Labour & Employment notified the final Central Rules under the following Labour Codes on 8 May 2026:

• Code on Wages, 2019
• Industrial Relations Code, 2020
• Code on Social Security, 2020
• Occupational Safety, Health and Working Conditions Code, 2020

With this notification, the Central Government has completed the rule-making process under all four Labour Codes, paving the way for uniform implementation across India, subject to notification of corresponding State Rules wherever applicable.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.05.2026

Executive Summary

Income Tax

• Income Tax Act, 2025, comes into force from 1-4-26

• Enforcement of the MOU Between India and Japan for Avoidance of Double Taxation

Goods and Services Tax (GST)

• Advisory No. 07/2026 – HSNS Cess – HSNS Amendment Declaration Filing Procedure for HSNS Cess Registered Persons, Dated 17-04-2026
• Notification No. S.O. 4220(E) – GSTAT Appeal Filing Timelines – Dated 17-09-2025 but applicable from 01-04-2026
• Advisory – GST Rule 14A: Withdrawal Conditions Relaxed – Dated 01-04-2026
• Finance Act, 2026 / Section 54 Amendment – Export Refund Threshold Removed – Dated 01-04-2026

Companies Act 2013/ Other Laws

• Companies Compliance Facilitation Scheme, 2026 (CCFS-2026)
• Draft Companies (Incorporation) Amendment Rules, 2026
• Corporate Laws (Amendment) Bill, 2026 – Status Update
• RBI Guidelines on Faster Cross-Border Inward Remittances
• FEMA (Guarantees) Regulations, 2026 – Operationalisation & Reporting Framework
• Circular on Valuation Standards under IBC

A. INCOME-TAX ACT, 2025 COMES INTO FORCE FROM 1-4-2026 [01-04-2026]

1. The Income-tax Act, 2025, a landmark reform in India’s direct tax framework, represents a comprehensive effort to simplify and modernise the country’s income-tax law, replacing the six-decade-old Income-tax Act, 1961. It marks a shift towards greater clarity and ease of compliance through simple language, a streamlined structure and a reader-friendly presentation, without altering the underlying tax policy.
2. The Bill was passed by the Parliament on 12th August, 2025, and received the assent of the Hon’ble President of India on 21st August, 2025, thereby becoming the Income-tax Act, 2025. (Gazette Notification – Income-tax Act, 2025)
3. The Income-tax Rules, 2026, were notified by the Central Board of Direct Taxes on 20th March, 2026 to operationalise the provisions of the new Act. (Gazette Notification – Income-tax Rules, 2026).
4. The corresponding new Forms have also been notified. The Forms have been simplified, standardized and process re-engineered to make compliance simpler.
5. With its coming into force from 1st April, 2026, the Income-tax Act, 2025 marks a new chapter in India’s tax administration and an important step towards Viksit Bharat.

A. ENFORCEMENT OF MOU BETWEEN REPUBLIC OF INDIA AND THE GOVERNMENT OF JAPAN FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME [02-04-2026]

Whereas, the Memorandum of Understanding for Assistance in Collection of taxes, as the Mode of Application of Article 26A of the Convention between the Government of the Republic of India and the Government of Japan for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, was signed at Tokyo on the 30th June, 2025 and at New Delhi on the 8th July, 2025 as set out in the Annexure appended to this

1. notification (hereinafter referred to as the said Memorandum);
2. And whereas, paragraph 21 of the said Memorandum provides that the provisions of the said Memorandum shall apply in respect of any request for collection of taxes made after the later of the dates of signature by two competent authorities;
3. And whereas, the date of entry into force of the said Memorandum being the date of signature in India, which is the later of the dates of signature of the two competent authorities, that is, the 8th day of July, 2025, the said Memorandum shall have effect in India in respect of any request for collection of taxes made after the 8th July, 2025;
4. Now, therefore, in exercise of the powers conferred by sub-section (1) of section 90 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Memorandum of Understanding as set out in the Annexure hereto, shall be given effect to in the Union of India.

A. Advisory No. 07/2026 – HSNS Cess – HSNS Amendment Declaration Filing Procedure for HSNS Cess Registered Persons, [Dated 17-04-2026]

HSNS Amendment Declaration Filing Procedure

CBIC issued Advisory No. 07/2026 dated 17.04.2026 providing the procedure for filing amendment declarations relating to addition, change, or disposal of machines under HSNS Cess. The advisory is available under HSNS > HSNS CESS Legislation on the CBIC portal.

• Applicable to HSNS Cess, registered taxpayers dealing in notified goods.
• Amendment filing required for addition, replacement, disposal, or change in machine details.
• Fresh declaration to be filed through FORM HSNS Declaration Form – 01on CBIC portal.
• Declaration required where any parameter affecting cess computation changes.
• Filing permitted only after earlier declaration is processed by proper officer.

Impact:
Ensures updated cess records and reduces risk of incorrect HSNS liability, audit objection, or compliance mismatch.

B. Notification No. S.O. 4220(E) – GSTAT Appeal Filing Timelines – Dated 17-09-2025 but applicable from 01-04-2026

Timelines for Filing Appeals before GST Appellate Tribunal (GSTAT)

Government notified timelines for filing appeals before GSTAT under Section 112 of the CGST Act.

• Orders communicated on or after 01-04-2026: Appeal to be filed within 3 months.
• Orders communicated before 01-04-2026: Transitional filing relief available up to prescribed date.
• Delay condonation available within statutory limit.
• Applicable to appeals against Appellate Authority/Revisional Authority orders.

C. Advisory – GST Rule 14A: Withdrawal Conditions Relaxed – Dated 01-04-2026

Relaxation in Withdrawal Conditions under Rule 14A
GST portal functionality allows easier withdrawal from Rule 14A registration framework.

• Withdrawal application can be filed through Form GST REG-32.
• Pending returns must be filed before withdrawal request.
• Simplified compliance conditions introduced for withdrawal.
• Applicable to eligible active registrations under Rule 14A.

Impact:
Reduces procedural burden and provides flexibility to taxpayers opting out of Rule-14A

registration structure.

D. Finance Act, 2026 / Section 54 Amendment – Export Refund Threshold Removed – Dated 01-04-2026

Removal of Minimum Threshold for Export Refund Claims
Government removed minimum refund claim threshold of INR. 1,000 for export refunds under Section 54 of CGST Act.

• Refund claims are allowed irrespective of minimum monetary amount.
• Applicable to export-related GST refund applications.
• Small-value refund claims (below INR. 1,000)can now be processed.
• Benefits exporters, MSMEs, and low-value refund applicants.

Impact:
Improves liquidity and enables recovery of even minor refund amounts without restriction.

A. COMPANIES COMPLIANCE FACILITATION SCHEME, 2026 (CCFS-2026):

The Ministry of Corporate Affairs (MCA) has introduced the Companies Compliance Facilitation Scheme, 2026 under the Companies Act, 2013, effective from 15 April 2026 to 15 July 2026. This one-time amnesty scheme provides defaulting companies an opportunity to file pending statutory documents, such as AOC-4 and MGT-7 by paying normal filing fees along with only 10% of the additional fees. The scheme also offers immunity from penalties for delays and allows companies to either regularize compliance, apply for dormant status, or opt for strike-off at reduced cost.

B. DRAFT COMPANIES (INCORPORATION) AMENDMENT RULES, 2026:

The MCA issued draft amendments to the Companies (Incorporation) Rules, 2014 in April 2026 for public consultation. The proposed changes aim to simplify the incorporation process by reducing documentation requirements, increasing reliance on digital filings, and aligning procedures with the MCA21 Version 3 system. These amendments are part of the government’s broader objective to improve ease of doing business and promote a fully digital corporate regulatory framework.

C. CORPORATE LAWS (AMENDMENT) BILL, 2026 – STATUS UPDATE:

The Corporate Laws (Amendment) Bill, 2026, introduced earlier in March, continued to progress during April 2026 and remains under review. The Bill proposes further decriminalization of procedural lapses by converting certain offences, such as delays in filings and AGMs, into civil penalties. It also seeks to enhance the accountability of directors and auditors, reflecting a shift toward strengthening corporate governance while reducing litigation.

1. RBI GUIDELINES ON FASTER CROSS-BORDER INWARD REMITTANCES:

On 9 April 2026, the Reserve Bank of India issued guidelines to streamline the processing of cross-border inward payments. Banks have been directed to ensure immediate customer notification upon receipt of remittance messages, faster reconciliation of nostro accounts, and prompt credit to beneficiary accounts. The directions are expected to come into force from October 2026.

2. FEMA (GUARANTEES) REGULATIONS, 2026 – OPERATIONALISATION & REPORTING FRAMEWORK:

Following the notification of the new guarantee framework earlier in 2026 under the Foreign Exchange Management Act, 1999, the RBI issued operational guidance effective 1 April 2026. The revised regime replaces the earlier approval-based system with a principle-driven framework and introduces standardised reporting requirements for issuance, modification, invocation, and closure of guarantees through Authorised Dealer (AD) banks. Timelines for reporting and applicability of late submission fees have been clearly prescribed, thereby improving compliance certainty and transparency.

1. CIRCULAR ON VALUATION STANDARDS UNDER IBC:

The Insolvency and Bankruptcy Board of India issued a circular dated 1 April 2026 prescribing valuation standards for assets under the Insolvency and Bankruptcy Code, 2016. This circular aims to bring greater consistency and reliability in valuation practices during CIRP and liquidation processes. It reinforces the requirement for registered valuers to follow standardized methodologies, thereby improving transparency and stakeholder confidence in insolvency proceedings.

Disclaimer: Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 30.04.2026

Executive Summary

Income Tax

• Extension of timeline for issuance of TDS certificate for the quarter ending 31-12-2025
• Governments of India and Brazil sign the Amending Protocol to amend the India-Brazil DTAA

Goods And Service Tax (GST)

• Advisory No. 06/2026 – HSNS Return Filing Procedure Introduced – HSNS returns to be filed in Form HSNS RET-01 for notified taxpayers, dated 12-03-2026.
• Trade Notice No. 20/2026 – GST Portal Updates & System Enhancements – Portal updated with new validations and improved return filing features dated 12-03-2026.
• GST Portal Advisory – Appeals Process under Section 107 of CGST Act, 2017 – Pre-deposit Clarification Mandatory pre-deposit required for filing appeals as per GST provisions, dated March 2026.

Companies Act 2013/ Other Laws

• Corporate Laws (Amendment) Bill, 2026, Introduced
• Companies Compliance Facilitation Scheme, 2026 (CCFS-2026)
• Director KYC Framework Revised
• Expansion of Regional Director (RD) Jurisdiction
• Companies (Accounting Standards) Amendment Rules, 2026
• Amendment to the ECB Framework under FEMA
• FEMA (Guarantees) Regulations, 2026
• Introduction of New Monitoring Forms for Personal Guarantors
• Amendment to Voluntary Liquidation Regulations, 2026

A. EXTENSION OF TIMELINE FOR ISSUANCE OF TAX DEDUCTED AT SOURCE (TDS) CERTIFICATE FOR THE QUARTER ENDING 31-12-2025 [25-03-2026]

1. Section 203 of the Income Tax Act, 1961 (“the Act”) provides for the issuance of a TDS certificate. The time limits for issuance of TDS certificate are prescribed under Rule 31 of the Income-tax Rules, 1962 (“the Rules”).
2. Representations have been received by the Central Board of Direct Taxes (“the Board”) regarding delay in issuance of TDS certificates for the quarter ending 31st December 2025, due to technical glitches on the e-filing portal. On account of such glitches, deductors have faced difficulties in generating and issuing the certificates within the prescribed time.
3. In view of the genuine hardship faced by the deductors, the Board, in exercise of its powers under section 119 of the Act, hereby extends the due date for issuance of TDS certificate under section 203 of the Act read with rule 31 of the Rules for the said quarter to 31st March, 2026. TDS certificate issued within the extended period shall be treated as having been issued within the prescribed time.
4. GOVERNMENTS OF INDIA AND BRAZIL AMEND THE INDIA-BRAZIL DOUBLE TAXATION AVOIDANCE AGREEMENT [30-03-2026]

1. Whereas, the Protocol, amending the Convention and the Protocol between the Government of the Republic of India and the Government of the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, which was signed at New Delhi on the 26^thApril, 1988,  as  amended by  the  Protocol  signed at  Brasilia on  the 15^th October,  2013,  was  signed at  Brasilia on  the 24^th August, 2022,  as  set  out in  the  Annexure  appended to  this  notification  (hereinafter  referred to  as  the  said  Amending Protocol); And whereas, the date of entry into force of the said amending Protocol is the 18^th October, 2025, being 30^th day  after  the  date of  the  receipt of  the  later of  the  notifications of  the  completion of  the  legal  requirements  and procedures for entry into force of the said Amending Protocol in accordance with paragraph 2 of Article 22 of the said Amending Protocol; And whereas, sub-paragraph (a) of paragraph 2 of Article 22 of the said Protocol provides that the provisions of this Agreement shall have effect in India in respect of income arising in any previous year on or after the first day of April immediately following the calendar year in which the Amending Protocol enters into force. Now,  therefore, in exercise of the powers conferred by sub-section  (1) of section 90 of the  Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that all the provisions of the said Amending Protocol, as set out in the Annexure hereto, shall be given effect to in the Union of India.

A. Advisory No. 06/2026 – HSNS Return Filing Procedure Introduced – HSNS returns to be filed in Form HSNS RET-01 for notified taxpayers, dated 12-03-2026

CBIC has issued a detailed advisory prescribing the procedure for filing returns under the Health & Safety National Surcharge (HSNS) Cess. Taxpayers dealing in notified goods (primarily tobacco and related products) are now required to file returns through Form HSNS RET-01 on the GST portal.

The advisory also outlines:

• Step-by-step process for return filing on the portal
• Data reporting requirements for HSNS transactions
• Timeline and compliance framework for taxpayers
• Integration of HSNS compliance within GST ecosystem

Impact:

• Introduction of separate compliance requirementin addition to GST returns
• Increased compliance burden for affected industries
• Businesses must update accounting and ERP systems to capture HSNS data
• Non-compliance may lead to penalties and litigation risk

B. Trade Notice No. 20/2026 – GST Portal Updates & System Enhancements – Portal updated with new validations and improved return filing features dated 12-03-2026

The GST department has issued a trade notice highlighting recent enhancements and system-level changes made to the GST portal. These changes are aimed at improving return filing accuracy, validation mechanisms, and user experience.

Key changes include:

• Improved validation checks in return filing forms: System now auto-validates tax liability before filing GSTR-3B.
• System-driven error identification before submission: Real-time error prompts to reduce incorrect return filing.
• Enhancements in data auto-population and reconciliation features: Better data flow from GSTR-1 to GSTR-3B and Improved matching with 2B data for ITC accuracy.
• User interface improvementsfor ease of navigation: Simplified navigation and improved portal usability.

Impact:

• Reduces the chances of incorrect return filing
• May require taxpayers to adapt to new validation checks
• Initial adjustment challenges for users and consultants
• Encourages better reconciliation between returns and book

C. GST Portal Advisory – Appeals Process under Section 107 of CGST Act, 2017 – Pre-deposit Clarification Mandatory pre-deposit required for filing appeals as per GST provisions, dated March 2026

CBIC has clarified the procedural aspects relating to mandatory pre-deposit while filing appeals before the First Appellate Authority under the GST law.

As per the advisory:

• Appeals cannot be filed without payment of the prescribed pre-deposit (generally 10% of the disputed tax)
• Payment must be correctly reflected in the electronic liability ledger
• Proper linkage of payment with appeal filing is mandatory
• System validations may restrict filing in case of non-compliance

Impact:

• Ensures stricter compliance in litigation procedures
• Prevents rejection or delay in appeal filings
• Taxpayers must plan cash flow for the pre-deposit requirement
• Reduces procedural disputes and improves transparency

A. CORPORATE LAWS (AMENDMENT) BILL, 2026 INTRODUCED

 The Government has introduced the Corporate Laws (Amendment) Bill, 2026 in Parliament with a focus on ease of doing business and rationalisation of compliance.

Key Highlights:

• Two buybacks permitted in a financial year
• Fast-track mergers simplified (75% approval in certain cases)
• Further decriminalisation of offences
• Enhanced regulatory powers of NFRA
• Relaxations for AIFs structured as LLPs

B. COMPANIES COMPLIANCE FACILITATION SCHEME, 2026 (CCFS-2026)

The Ministry of Corporate Affairs has introduced an amnesty scheme for defaulting companies.

Effective Period: 15 April 2026 to 15 July 2026

Key Features:

• Only 10% of additional fees are payable on delayed filings
• Option to apply for dormant status
• Strike-off option at concessional cost
• Immunity from prosecution for delays

C.DIRECTOR KYC FRAMEWORK REVISED

A significant change has been introduced in the Director KYC compliance framework, wherein the requirement of filing DIR-3 KYC has been relaxed from an annual filing to once in every three years. However, to ensure accuracy of records, an event-based compliance has been mandated. Accordingly, any change in a director’s mobile number, email address, or residential address is required to be updated within 30 days. This shift reduces the routine compliance burden while placing greater emphasis on timely updates of critical information.

D. EXPANSION OF REGIONAL DIRECTOR (RD) JURISDICTION

The Government has expanded the number of Regional Director offices with effect from 16 February 2026 to enhance administrative efficiency. This move is aimed at ensuring faster disposal of applications and improving jurisdictional management across regions. As a result, companies can expect quicker approvals and more streamlined handling of matters falling under the jurisdiction of Regional Directors.

E. COMPANIES (ACCOUNTING STANDARDS) AMENDMENT RULES, 2026

The Government has notified amendments to the Accounting Standards, impacting key areas such as financial statement preparation, audit processes, and disclosure requirements. These changes necessitate a careful evaluation by companies to assess their effect on financial reporting. It is essential for companies to align their accounting policies and practices with the revised standards to ensure compliance and accuracy in financial disclosures.

1. AMENDMENT TO ECB FRAMEWORK UNDER FEMA

The Reserve Bank of India has introduced key amendments to the External Commercial Borrowing (ECB) framework, bringing greater clarity and structure to foreign borrowing regulations. The revised framework includes clearer definitions of concepts such as arm’s length and benchmark rate, along with stricter end-use restrictions. Specifically, the utilisation of ECB proceeds has been restricted for activities such as chit funds, speculative real estate, and short-term investments in securities. These changes aim to ensure that foreign borrowings are utilised for productive and long-term economic purposes, while also reducing interpretational ambiguities.

2.   FEMA (GUARANTEES) REGULATIONS, 2026

The RBI has notified the FEMA (Guarantees) Regulations, 2026, replacing the earlier 2000 framework with a more comprehensive and principle-based regime. The new regulations mark a shift from an approval-based system to an eligibility-based approach, thereby enabling eligible transactions to be undertaken under the automatic route. At the same time, reporting requirements have been streamlined, with greater responsibility placed on Authorised Dealer banks. A notable relaxation is the discontinuation of quarterly reporting requirements for trade credit guarantees, which reduces repetitive compliance for businesses.

1. INTRODUCTION OF NEW MONITORING FORMS FOR PERSONAL GUARANTORS

The Insolvency and Bankruptcy Board of India issued a circular dated 6 March 2026 introducing new filing forms to monitor insolvency resolution processes for personal guarantors to corporate debtors. These forms are intended to standardise reporting and enhance oversight during the resolution process. The move reflects the regulator’s focus on improving transparency, ensuring better tracking of cases, and enabling more structured data collection for regulatory supervision.

2.   AMENDMENT TO VOLUNTARY LIQUIDATION REGULATIONS, 2026

The IBBI has amended the Voluntary Liquidation Process Regulations, 2026, with a key focus on strengthening documentation and valuation practices. The amendment mandates the use of standardised valuation report formats along with supporting documentation, thereby bringing uniformity and improving the reliability of valuation during liquidation. This change is expected to reduce disputes and enhance stakeholder confidence in the liquidation process.

Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 31.03.2026

Executive Summary

Income Tax

• SECTION 80-IAC of the INCOME-TAX ACT, 1961-Startup
• Draft Income Tax Rules and Forms, 2026
• Governments of India and France sign the Amending Protocol to amend the India-France DTAA

Goods And Service Tax (GST)

• Order No. 01/2026 – HSNS Cess – proper officers appointed for administration and enforcement of HSNS Cess on notified goods – Dated 29-01-2026, Effective 01-02-2026.
• Order No. 02/2026 – HSNS Cess – registration procedure and compliance framework prescribed for taxpayers liable under HSNS Cess – Dated 29-01-2026, Effective 01-02-2026.
• Notification No. 21/2026 – Customs (N.T.) – amendment to Notification No. 77/2023-Customs (N.T.) revising All Industry Rates (AIR) of Duty Drawback for certain export goods including jewelry articles under the Customs and Central Excise Duties Drawback Rules – Dated 16-02-2026 – Effective from 16-02-2026.
• Advisory No. 04/2026 – HSNS Cess – procedure prescribed for filing HSNS Cess declaration and compliance by taxpayers dealing in notified tobacco products through CBIC portal – Advisory dated 09-02-2026.
• Flexible utilisation of CGST & SGST ITC allowed for IGST liability after exhausting IGST credit – Advisory dated 19-02-2026 – Applicable from Feb-2026 tax period.

Companies Act 2013/ Other Laws

• Reorganisation of Regional Directors (RD) Offices
• ROC Adjudication Structure Revised (Section 454)
• One-Time Compliance Facilitation Scheme (Proposed)
• FEMA (Export and Import of Goods and Services) Regulations, 2026
• Amendment to Voluntary Liquidation Process Regulations, 2026

A. SECTION 80-IAC OF THE INCOME-TAX ACT, 1961- DEDUCTIONS – IN RESPECT OF SPECIFIED BUSINESS – STARTUP INDIA [19-02-2026]

This notification is being issued in supersession of the Gazette Notification No. G.S.R. 127(E), dated February 19, 2019.

1. In this notification,
2. ‘Startup’ means an entity which—
3. is incorporated or registered in India as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) or a Multi-State Cooperative Society registered with the Central Registrar of Cooperative Societies (under the Multi-State Co-operative Societies Act, 2002) or a Cooperative Society registered under any State or Union Territory Cooperative Societies Act with the respective Registrar of Cooperative Societies in India;
4. is within a period of ten years from the date of its incorporation or registration.

iii. has a turnover for any of the financial years since incorporation or registration not exceeding two hundred crore rupees; and

1. is working towards innovation, development or improvement of products or processes or services, or is a scalable business model with a high potential of employment generation or wealth creation:

Provided that, in the case of an entity recognized as a ‘Deep Tech Startup’ under this notification:

(a)   the period specified in clause (ii) shall be up to twenty years from the date of its incorporation or registration; and

(b)   the turnover limit specified in clause (iii) shall be three hundred crore rupees for any of the financial years since incorporation or registration.

Provided further that, an entity formed by splitting up or reconstruction of an existing business shall not be considered a Startup.

Provided that, in the case of an entity recognized as a Deep Tech Startup under this notification, such entity shall cease to be a Deep Tech Startup on completion of twenty years from the date of its incorporation or registration, or if its turnover for any previous year exceeds three hundred crore rupees. a clearing corporation by SEBI.

B. DRAFT INCOME-TAX RULES AND FORMS, 2026

1. Income-tax Act, 2025 is to come into force from the 1st of April, 2026.
2. The drafting of new Income-tax Rules and forms has followed the same philosophy as that of the new Income-tax Act 2025. The language of the rules has been simplified to the extent possible. Formulas and tables have been provided wherever necessary. Redundancy in the Income-tax Rules, 1961 has been sought to be eliminated. While preserving the larger content of the policy, certain changes have been introduced in line with the changes in the Income-tax Act, 2025.
3. The Income-tax Rules, 1962, contain 511 rules and 399 forms. As a result of the changes proposed in new rules and forms, including removal of redundancy and consolidation of rules wherever possible, draft Income-tax Rules, 2026 contains 333 rules and 190 forms.

C. GOVERNMENTS OF INDIA AND FRANCE SIGN THE AMENDING PROTOCOL TO AMEND THE INDIA-FRANCE DOUBLE TAXATION AVOIDANCE CONVENTION [23-02-2026]

1. During the recent visit of the President of France to India, the Government of the Republic of India and the Government of the French Republic have signed a Protocol amending the India-France Double Taxation Avoidance Convention, signed on 29 September 1992 (‘India-France DTAC’).
2. The Amending Protocol provides full taxing rights in respect of capital gains arising from sale of shares of a company, to the jurisdiction where such company is a resident. The Amending Protocol also deletes the so-called Most-Favoured-Nation (MFN) Clause from the Protocol to the DTAC, thereby bringing to rest all issues relating to it. The Amending Protocol also modifies the taxation of income from dividends by replacing a single rate of 10% of tax with a split rate of 5% for those holding at least ten percent of capital and 15% of tax for all other cases. It also modifies the definition of ‘Fees for Technical Services’ by aligning it with the definition in India US Double Taxation Avoidance Agreement and expands the scope of ‘Permanent Establishment’ by adding Service PE.
3. The Amending Protocol also updates the provisions on Exchange of Information and introduces a new Article on Assistance in Collection of Taxes, as per international standards. This would enable and facilitate seamless exchange of information and strengthen mutual tax cooperation between India and France. The Amending Protocol also incorporates within the DTAC, the applicable provisions of BEPS Multilateral Instrument (MLI), that had already become applicable consequent to the signing and ratification of MLI by India and France.
4. The changes introduced through the Amending Protocol shall enter into effect subsequent to the completion of internal procedures under the laws of both the countries and subject to the terms agreed between the two countries.
5. The Amending Protocol updates the India-France DTAC to the latest international standards, in a manner that balances the interests of both India and France and updates it in accordance with international standards. The Amending Protocol will provide greater tax certainty to the taxpayers and boost flow of investment, technology and personnel between India and France, and thereby strengthen the economic relationship between the two countries.

A. Order No. 01/2026 – HSNS Cess – Appointment of Proper Officers for Administration of HSNS Cess – Dated 29-01-2026 (Effective 01-02-2026)

Implementation of HSNS Cess – Appointment of Proper Officers

CBIC has issued Order No. 01/2026 – HSNS Cess appointing proper officers responsible for administration, assessment and enforcement of Health Security at National Security (HSNS) Cess on notified goods.

• The order establishes the administrative framework for implementation of HSNS Cess.
• Designated officers will be responsible for assessment, verification and enforcement of cess compliance.
• The cess primarily applies to specified tobacco and related products.
• Businesses dealing in such goods may face enhanced regulatory monitoring and compliance checks.

B. Order No. 02/2026 – HSNS Cess – Registration Procedure and Compliance Framework – Dated 29-01-2026 (Effective 01-02-2026)

Registration Procedure Prescribed for HSNS Cess

CBIC has issued Order No. 02/2026 – HSNS Cess prescribing the registration procedure and compliance framework for taxpayers liable to pay HSNS Cess.

• Taxpayers dealing in notified tobacco products must register on the CBIC HSNS portal.
• Registration requires submission of PAN/GST details and business information
• Registered taxpayers must file HSNS declarations and pay applicable cess through the portal.
• Businesses should ensure timely registration and compliance to avoid penalties or enforcement action.

C. Notification No. 21/2026 – Customs (N.T.) – Revision of Duty Drawback Rates –Dated 16-02-2026 (Effective 16-02-2026)

Revision in Duty Drawback Rates for Certain Export Goods

The Government has issued Notification No. 21/2026 – Customs (N.T.) amending Notification No. 77/2023 – Customs (N.T.) to revise the All-Industry Rates (AIR) of Duty Drawback for certain export goods including jewellery articles.

• Revised drawback rates aim to align with the actual incidence of duties on exported goods.
• Exporters dealing in gold and silver jewellery articles may benefit from updated rates.
• Businesses should review the revised drawback schedule for applicable products
• The change may help improve export competitiveness and cost recovery for exporters.

D. Advisory No. 04/2026 – HSNS Cess – Procedure for Filing HSNS Cess Declaration – Dated 09-02-2026

Procedure for Filing HSNS Cess Declarations

CBIC issued Advisory No. 04/2026 – HSNS Cess prescribing the procedure for filing HSNS Cess declarations through the CBIC portal.

• Taxpayers dealing with notified tobacco products must submit declarations electronically.
• The portal enables digital filing and tracking of HSNS Cess liabilities.
• Businesses must ensure timely submission of declarations to remain compliant.

E. GSTN Advisory – Flexible ITC Utilisation for IGST Liability – Dated 19-02-2026

Flexible Utilisation of Input Tax Credit

GSTN introduced a system enhancement allowing taxpayers to utilize CGST and SGST input tax credit in any order for payment of IGST liability, after exhausting available IGST credit.

• The change improves efficient utilisation of available ITC balances.
• It may reduce the need for cash payment of GST liabilities.
• Businesses should review ITC utilisation logic in accounting or ERP systems.

A.REORGANIZATION OF REGIONAL DIRECTORS (RD) OFFICE

MCA issued Notification S.O. 699(E) dated 10 February 2026 revising the list of Regional Directors exercising powers under the Companies Act.

The updated RD offices are located at Ahmedabad, Bangalore, Chandigarh, Chennai, Guwahati, Hyderabad, Kolkata, Mumbai, Navi Mumbai, New Delhi

Effective Date: 16 February 2026.

B. ROC ADJUDICATION STRUCTURE ADVISED (SECTION 454)

The Ministry of Corporate Affairs (MCA), vide Notification S.O. 698(E) dated 10 February 2026, has revised the adjudication framework under Section 454 of the Companies Act, 2013. Pursuant to this notification, the Registrars of Companies (RoCs) have been designated as Adjudicating Officers with a revised territorial jurisdiction mapping across India. The notification clarifies the jurisdiction of RoCs state-wise and district-wise, with the objective of removing ambiguities and facilitating faster adjudication of penalties under the Act. These changes have come into effect from 16 February 2026.

C. ONE-TIME COMPLIANCE FACILITATION SCHEME (PROPOSED)

The Ministry of Corporate Affairs (MCA) has proposed a One-Time Compliance Facilitation Scheme to enable companies to regularize their pending statutory filings, including financial statements and annual returns. Under the proposed scheme, companies may be allowed to file overdue documents by paying approximately 10% of the applicable additional fees, thereby providing significant relief from the otherwise higher penalties. The scheme is expected to be available for a limited window from 15 April 2026 to 15 July 2026. The objective of the initiative is to encourage defaulting companies to complete pending compliances and bring them back into the regulatory framework while reducing the burden of heavy additional fees.

A. FEMA (EXPORT AND IMPORT OF GOODS AND SERVICES) REGULATIONS, 2026

The RBI has issued Notification No. FEMA 23(R)/2026-RB dated 13 January 2026, introducing the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which will replace the earlier Export of Goods and Services Regulations, 2015. These regulations consolidate rules governing exports and imports of goods, services, and software under a single framework to improve compliance and monitoring of foreign exchange transactions. Key provisions include requirements for filing Export Declaration Forms (EDF) and revised procedures for receipt and payment related to export-import transactions. The regulations are scheduled to come into force from 1 October 2026.

A. AMENDMENT TO VOLUNTARY LIQUIDATION PROCESS REGULATIONS, 2026

IBBI notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2026 on 25 February 2026. The amendment introduces an explanation in Regulation 3 requiring that registered valuers prepare valuation reports and maintain supporting documentation in a format specified by the Board through circulars. The objective of this amendment is to standardize valuation reporting, improve reliability of valuation exercises, and strengthen regulatory oversight in voluntary liquidation proceedings.

 Disclaimer Information in this note is intended to provide only a general update of the subjects covered. It is not intended to be a substitute for detailed research or the exercise of professional judgment. KNM accepts no responsibility for loss arising from any action taken or not taken by anyone using this publication. Updates for the period 28.02.2026