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