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

Executive Summary

Income Tax

• SECTION 10(23EE) – Exemption – Core Settlement Guarantee Fund
• Introduction of Budget 2026

Goods And Service Tax (GST)

• Notification no. 19/2025 – Section 9 of the Central Goods and Services Tax Act, 2017 – levy and collection of tax – CGST rate schedule for goods – amendment in notification no. 9/2025 Central Tax (Rate) [F. No. Cbic-190349/73/2025 – tru], Dated 31-12-2025
• Notification no. 19/2025 – Section 15 of the Central Goods and Services Tax Act, 2017 – value of taxable supply – notified supplies value of which to be determined in such manner as may be notified by government on recommendations of council – amendment in Notification No. 49/2023 Central Tax [G.S.R. 949(e)/F. No. CBIC – 20001/2/2025 – GST], Dated 31-12-2025
• Notification no. 20/2025 – Central Goods and Services Tax (fifth amendment) rules, 2025 – amendment in rule 86b and insertion of rule 31d Central Tax [G.S.R. 950(e)/F.No. CBIC-20001/2/2025 – GST], Dated 31-12-2025
• Press release, CBIC extends export incentives to postal shipments from 15-1-2026 – incentives expected to significantly enhance competitiveness of MSME exporters, especially from smaller towns and remote areas, and give a major fillip to postal exports, Dated 16-01-2026

Companies Act 2013/ Other Laws

• Director KYC Relaxation
• Deferral of New Regional Director Jurisdiction Structure
• Small Company Status Display in Master Data
• Amendments to SEBI (LODR) for High Value Debt Listed Entities
• New FEMA Regulation on Guarantees (Effective January 6, 2026)
• RBI Update to FEMA Reporting Master Direction
• Revised liquidation regulations by IBBI

A. SECTION 10(23EE) OF THE INCOME-TAX ACT, 1961 – EXEMPTION – CORE SETTLEMENT GUARANTEE FUND – NOTIFIED FUND [08-01-2026]

• In exercise of the powers conferred by clause (23EE) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the Core Settlement Guarantee Fund (PAN: AAAJA3150B), set up by AMC Repo Clearing Limited, a recognized clearing corporation, with respect to specified income mentioned in Explanation (iii) of clause (23EE) of section 10 of the Income-tax Act, 1961, for the purpose of the said clause for the assessment year 2024-25 and subsequent assessment years.This notification shall be effective subject to the conditions that Core Settlement Guarantee Fund (PAN:AAAJA3150B) set up by AMC Repo Clearing Limited shall continue to follow conditions mentioned in clause (23EE) of Section 10 including the following-
  1. shall file return of income in accordance with sub-section (4C) of section 139 of the Income-tax Act, 1961,
  2. AMC Repo Clearing Limited shall remain recognised as a clearing corporation by SEBI.

B. INTRODUCTION OF BUDGET -2026

• Finance Minister Nirmala Sitharaman will present the budget on Sunday, February 1, 2026, at 11 AM.

A. NOTIFICATION NO. 19/2025 – SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – LEVY AND COLLECTION OF TAX – CGST RATE SCHEDULE FOR GOODS – AMENDMENT IN NOTIFICATION NO. 9/2025 CENTRAL TAX (RATE) [F. NO. CBIC-190349/73/2025 – TRU], DATED 31-12-2025

• GST Update on Tobacco & Pan Masala (Effective 1 Feb 2026)The Government has revised GST rates on tobacco and pan masala products based on GST Council recommendations.
  • Biris will continue to be taxed at a lower rate (18% GST).
  • Pan masala and all other tobacco products (such as cigarettes, cigars, chewing tobacco, vaping or inhalation products, etc.) will now attract a higher GST rate of 40%.
  • The earlier 14% GST slab has been removed, and these products are now fully covered under the higher tax category.
  • Businesses dealing in these products should update billing systems, HSN classification, and pricing from 1 February 2026.

B. NOTIFICATION NO. 19/2025 – SECTION 15 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – VALUE OF TAXABLE SUPPLY – NOTIFIED SUPPLIES VALUE OF WHICH TO BE DETERMINED IN SUCH MANNER AS MAY BE NOTIFIED BY GOVERNMENT ON RECOMMENDATIONS OF COUNCIL – AMENDMENT IN NOTIFICATION NO. 49/2023 CENTRAL TAX [G.S.R. 949(E)/F. NO. CBIC – 20001/2/2025 – GST], DATED 31-12-2025

• GST Valuation Change for Tobacco & Pan Masala (Effective 1 Feb 2026)The Government has amended GST valuation rules for pan masala and tobacco products sold in packaged form with a declared Retail Sale Price (RSP).
  • What has changed?
  • For pan masala and all tobacco-related products, GST will now be calculated on the declared Retail Sale Price (RSP) instead of transaction value.
  • This applies to: Pan masala, Unmanufactured tobacco (other than leaves), Cigarettes, cigars, chewing tobacco, Other manufactured tobacco & Vaping / inhalation products containing tobacco or nicotine
  • Key points for businesses:
  • RSP includes all taxes, duties, Cess, etc.
  • If multiple RSPs are printed, the highest RSP will be used for GST.
  • If RSP is increased at any stage, the revised higher RSP will be the GST value.
  • If different RSPs are printed for different regions, GST will be based on the RSP applicable to that area.
  • Impact:
    This will increase GST liability for manufacturers, packers, and importers dealing in these products. Billing systems, pricing, and compliance processes should be updated accordingly.

C. Notification no. 20/2025 – Central Goods and Services Tax (fifth amendment) rules, 2025 – amendment in rule 86b and insertion of rule 31d Central Tax [G.S.R. 950(e)/F.No. CBIC-20001/2/2025 – GST], Dated 31-12-2025

GST Valuation Change – RSP Based Tax (w.e.f. 01-02-2026)

The Government has introduced Rule 31D under GST, mandating RSP-based valuation for specified pan masala and tobacco products.

• Products covered (with HSN):

• Key valuation rule
• GST value = Declared Retail Sale Price (RSP) – GST amount
• GST is back calculated from RSP
• RSP includes all taxes, duties, Cess
• Important points
• If multiple RSPs are printed → highest RSP applies
• If RSP is increased at any stage → increased RSP applies
• If different RSPs for different regions → area-wise RSP applies
• Rule 86B relaxation
• Traders (non-manufacturers) are exempt from Rule 86B for these goods if GST is paid by supplier on RSP basis
• Business impact

Higher GST liability for manufacturers/packers/importers and mandatory updates to pricing, packaging, billing & ERP systems

D. PRESS RELEASE, CBIC EXTENDS EXPORT INCENTIVES TO POSTAL SHIPMENTS FROM 15-1-2026 – INCENTIVES EXPECTED TO SIGNIFICANTLY ENHANCE COMPETITIVENESS OF MSME EXPORTERS, ESPECIALLY FROM SMALLER TOWNS AND REMOTE AREAS, AND GIVE A MAJOR FILLIP TO POSTAL EXPORTS, DATED 16-01-2026

Big Boost for E-commerce & MSME Exports via Post (Effective 15 Jan 2026)

The Government has extended export incentive benefits to goods exported through the postal route (India Post) in electronic mode.

• What is the key change?

Exporters using postal mode can now claim:

• Duty Drawback
• RoDTEP
• RoSCTL
• This benefit was earlier limited mainly to shipping bill/courier exports.
• Who benefits the most?
• MSME exporters
• E-commerce sellers
• Exporters in small towns & remote areas
• Sellers exporting small consignments through India Post
• What enabled this change?
• Amendment to Postal Export (Electronic Declaration & Processing) Regulations, 2022
• Issuance of:
• Notification No. 07/2026 – Customs (non-tariff)
• Circular No. 01/2026 – Customs (procedure & implementation)
• Supporting ecosystem already in place
• 28 Foreign Post Offices (FPOs) notified under Customs Act
• End-to-end electronic processing of postal exports
• Automated IGST refunds for postal exports (since Sept 2024)
• 1,000+ Dak Niryat Kendras (DNKs) under Hub-and-Spoke model to support MSMEs
• Why this is important
• Ensures equal benefits for postal exporters
• Reduces cost & compliance burden
• Encourages cross-border e-commerce
• Strengthens India’s global e-commerce export presence.

A. DIRECTOR KYC RELAXATION

The Ministry of Corporate Affairs has amended the Director KYC requirement by shifting it from an annual filing to a once-in-three-years cycle. This change significantly reduces repetitive compliance for DIN holders. The revised system will become operational from 31 March 2026, and directors will now be required to file abridged KYC only once every three years, unless there is a change in personal details.

B. DEFERRAL OF NEW REGIONAL DIRECTOR JURISDICTION STRUCTURE

The implementation of the revised Regional Director and ROC jurisdiction framework, originally proposed to take effect from 1 January 2026, has been deferred to 16 February 2026. Till then, existing RD and ROC jurisdictions will continue to operate without change.

C. SMALL COMPANY STATUS DISPLAY IN MASTER DATA

MCA has updated the MCA-21 system to explicitly display “Small Company” status in the company master data. This helps companies and professionals easily identify eligibility for various compliance relaxations available under the Companies Act, 2013.

A. AMENDMENTS TO SEBI (LODR) FOR HIGH VALUE DEBT LISTED ENTITIES

SEBI notified amendments to the LODR (Listing Obligations and Disclosure Requirements) to rationalise compliance for High Value Debt Listed Entities (HVDLEs), increasing the threshold for applicability and relaxing certain governance timelines to align with market practices.

A. NEW FEMA REGULATION ON GUARANTEES (EFFECTIVE JANUARY 6, 2026)

The Reserve Bank of India has notified the Foreign Exchange Management (Guarantees) Regulations, 2026 replacing the old 2000 rules. These new regulations provide a comprehensive framework for cross-border guarantees, clarify who can issue and receive foreign exchange guarantees, strengthen reporting obligations for banks, and tighten compliance. Quarterly reporting is now mandatory, and penalties apply for late or missing disclosures under FEMA.

B.RBI UPDATE TO FEMA REPORTING MASTER DIRECTION

RBI updated the Master Direction on Reporting under FEMA, 1999, consolidating reporting obligations for authorized dealers and other parties. These updates ensure that all required foreign exchange reports/forms are clearly listed and consistently supervised by RBI.

A. REVISED LIQUIDATION REGULATIONS BY IBBI

The Insolvency and Bankruptcy Board of India (IBBI) amended the Liquidation Process Regulations effective from 2 January 2026 and introduced revised liquidation forms to reduce compliance burden and improve data quality and timeliness of reporting.

 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 29.01.2026

Executive Summary

Income Tax

• CBDT nudges taxpayers against the Claims of bogus Deductions through Data-Driven Approach – Fake Donations Claims to Political Parties and Trusts under Tax Scanner

Goods And Service Tax (GST)

• Order No. 315/2025, F. No. GSTAT/ Pr. Bench/ Portal/ 125/25-26/2367-70, dated 16 December 2025
• Notification No. G.S.R. 918(E) – New Delhi, the 24th December 2025, [F. No. A-11/1/2024-CESTAT-DOR-Part (1) (Vikash Kumar, Dy. Secy)

Companies Act 2013/ Other Laws

• Small Company Definition Revised (Effective 1 Dec 2025)
• Extension of Filing Deadlines — MCA General Circular No. 08/2025
• SEBI simplified and standardised the procedure for issuance of duplicate share certificates
• RBI Revises FEMA Rules on Export–Import of Currency (3 December 2025)
• Introduction of Modification Utility & Fee for Delayed Filing of CIRP Forms

A. CBDT NUDGEs TAXPAYERS AGAINST THE CLAIMS OF BOGUS DEDUCTIONS THROUGH DATA-DRIVEN APPROACH – FAKE DONATIONS CLAIMS TO POLITICAL PARTIES AND TRUSTS UNDER TAX SCANNER [13-12-2025]

• Recently, the Central Board of Direct Taxes (CBDT) has acted upon many intermediaries who were involved in filing income tax returns with bogus claims of deductions and exemptions under the Income-tax Act. The exercise revealed that some intermediaries have established network of their agents all over India for filing returns with incorrect claims on commission basis. It was observed that huge amount of bogus claims have been made on account of donation to Registered Unrecognized Political Parties (RUPPs) or Charitable Institutions and reduced their tax obligations and have also claimed bogus refunds. Evidence gathered from enforcement actions indicated that RUPPs many of which were non-filers, non-operational at their registered addresses, and are not engaged in any political activity were being used as conduits for routing funds, hawala transactions, cross border remittances and issuing bogus receipts for donations. CBDT carried out follow up searches against some of these RUPPs and Trusts and gathered incriminating evidence in respect of bogus donations by individuals and bogus CSR by companies.
• CBDT has strengthened its data-driven approach to early detection of suspicious claims and identification of high-risk behavior patterns, one such risk pattern has been identified for taxpayers who have made claims under section 80GGC or 80G of the Income-tax Act, 1961. The data analytics indicated that many taxpayers are suspected to be indulged in claiming deductions for donations made to suspicious entities or have not provided relevant information to ascertain genuineness of entities. A large number of taxpayers have already revised their Income-tax Returns for current AY that is 2025-26 and have filed updated ITRs for past years.
• A targeted NUDGE campaign has been launched as a taxpayer friendly measure, providing them opportunity to update their ITRs and withdraw wrong claims if any. SMSs and Email advisories are being issued from 12th December 2025 to such taxpayers on their registered mobile numbers and emails.

A. ORDER NO. 315/2025, F. NO. GSTAT/ PR. BENCH/ PORTAL/ 125/25-26/2367-70, DATED 16 DECEMBER 2025

• This is to inform you that the Goods and Services Tax Appellate Tribunal (GSTAT) has revoked its earlier order dated 24 September 2025, which mandated staggered filing of appeals under Section 112 of the CGST Act, 2017.
• Vide Order No. 315/2025 dated 16 December 2025, the President of GSTAT has dispensed with the staggered filing protocol after reviewing the current capabilities of the GST appeal portal. Accordingly, appeals under Section 112 can now be filed without any staggered restrictions with effect from 18 December 2025.
• It is clarified that appeals already filed pursuant to the earlier order before 18 December 2025 shall remain valid. The revocation is without prejudice to the statutory powers of the Appellate Tribunal under Section 112 of the CGST Act, 2017

B. NOTIFICATION NO. G.S.R. 918(E) – NEW DELHI, THE 24TH DECEMBER 2025, [F. NO. A-11/1/2024-CESTAT-DOR-PART (1) (VIKASH KUMAR, DY. SECY)

• Notification Issued: Ministry of Finance vide S.R. 918(E) dated 24 December 2025
• Rules Amended: GSTAT (Recruitment, Salary and other Terms and Conditions of Service of Group “C” Employees) Rules, 2024
• Stenographer Grade II: Minimum qualification reduced to 12th pass or equivalent
• Upper Division Clerk (UDC): Deputation provision omitted
• Effective Date: From the date of publication in the Official Gazette

A. SMALL COMPANY DEFINITION REVISED (EFFECTIVE DECEMBER 1, 2025)

The Ministry of Corporate Affairs (MCA) issued the Companies (Specification of Definition Details) Amendment Rules 2025 (G.S.R. 880(E)) which came into effect on 1 December 2025. The financial thresholds for classifying a small company under Section 2(85) of the Companies Act, 2013 were significantly increased:

• Paid-up capital limit: ₹10 crore (up from previous lower limit)
• Turnover limit: ₹100 crore (up from previous lower limit)

This expands the pool of companies eligible for simplified compliance, reduced reporting burdens, and lower penalties where applicable.

B. EXTENSION OF FILING DEADLINES-MCA GENERAL CIRCULAR NO. 08/2025

• The Ministry of Corporate Affairs (MCA) has issued General Circular No. 08/2025 dated 30 December 2025, which provides the following relief for companies:
• Companies may now file Annual Returns and Financial Statements for the Financial Year 2024–25 up to 31 January 2026 without payment of any additional (late) fees. The extension applies to key MCA statutory filings, including MGT-7 / MGT-7A, AOC-4 / AOC-4 CFS / AOC-4 NBFC (Ind AS) / AOC-4 CFS NBFC (Ind AS) / AOC-4 (XBRL)
• This relief is issued in continuation of General Circular No. 06/2025 dated 17 October 2025, which initially extended deadlines to 31 December 2025 without additional fees.
• The circular does not extend the statutory deadlines for holding Annual General Meetings (AGMs) under the Companies Act, 2013 — companies must still comply with those timelines.

A. SEBI SIMPLIFIED AND STANDARDISED THE PROCEDURE FOR ISSUANCE OF DUPLICATE SHARE CERTIFICATES

SEBI, vide Circular No. HO/38/13/11(3)2025-MIRSD-POD/I/1102/2025, has simplified and standardised the procedure for issuance of duplicate share certificates. The circular prescribes uniform formats and rationalised documentation requirements to reduce procedural delays and compliance burden. The objective is to improve ease of doing investment, enhance investor convenience, and ensure consistency in practices followed by listed companies and RTAs. On 21 November 2025, the government officially notified enforcement of all four labour codes nationwide.

A. RBI REVISES FEMA RULES ON EXPORT–IMPORT OF CURRENCY (3 DECEMBER 2025)

RBI amended the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015, with effect from 28 November 2025, to revise norms relating to export and import of Indian currency. The amendments primarily streamline rules governing cross-border movement of Indian currency with neighbouring countries such as Nepal and Bhutan, with the objective of simplifying procedures and ensuring better compliance with FEMA.On 24 November 2025, Reserve Bank of India (RBI) issued a circular amending the “Compounding of Contraventions under Foreign Exchange Management Act, 1999 (FEMA)” directions.

A. INTRODUCTION OF MODIFICATION UTILITY & FEE FOR DELAYED FILING OF CIRP FORMS

On 18 December 2025, IBBI issued a circular implementing a Modification Utility on its portal and starting the levy of fees for delayed filing of forms required under Regulation 40B of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This means that insolvency professionals will be charged a fee (e.g., ₹500 per form per month of delay) for any forms submitted after their due date, including corrections or updates.

The new regime balances the earlier concession period with ongoing compliance discipline and introduces tools for easier correction of filing errors.

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 31.12.2025

Executive Summary

Income Tax

• Transfer Pricing – Computation of Arm’s Length Price – Notified tolerance limit under third proviso to sub-section (2) of section 92C for Assessment Year 2025-26
• DTAA – Protocol amending Agreement and Protocol between Government of Republic of India and Government of Kingdom of Belgium

Goods And Service Tax (GST)

• Circular No. 254/11/2025 – GST [F. No. CBIC – 20010/80/2025 – GST], assigning proper officer under section 74A, section 75(2) and section 122 of the Central Goods and Services Tax Act, 2017 and rules made thereunder, dated 27-10-2025
• Notification No. 18/2025 – Central Tax [F. No. CBIC-20013/3/…] Central Goods and Services Tax (Fourth Amendment) Rules, 2025 – amendment in Rule 10, Form GST REG-01 and Form GST REG-02; insertion of Rules 9A and 14A; insertion of Forms GST REG-32 and GST REG-33; substitution of Forms GST REG-03, GST REG-04 and GST REG-05, dated 31-10-2025

Companies Act 2013/ Other Laws

• Ministry of Corporate Affairs (MCA) amendment to Board Meeting / Loan & Guarantee Rules
• Extension / relaxation for annual filings (Financial Statements & Annual Returns)
• Structural change: New Registrar-offices set up for compliance efficiency
• Updated payment process for FEMA compounding cases
• Code on Wages, 2019, Industrial Relations Code, 2020, Code on Social Security, 2020 and Occupational Safety, Health and Working Conditions Code, 2020 — all come into force

A. TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE – NOTIFIED TOLERANCE LIMIT UNDER THIRD PROVISO TO SUB-SECTION (2) OF SECTION 92C OF INCOME TAX ACT FOR ASSESSMENT YEAR 2025-26 [06-11-2025]

• In exercise of the powers conferred by the third proviso to sub-section (2) of section 92C of the Income-tax Act, 1961 read with the proviso to sub-rule (7) of rule 10CA of the Income-tax Rules, 1962, the Central Government hereby notifies that where the variation between the arm’s length price determined under section 92C of the said Act and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed:(i) one per cent of the latter in respect of wholesale trading; and
  (ii) three per cent of the latter in all other cases.

B. DOUBLE TAXATION AGREEMENT – PROTOCOL AMENDING AGREEMENT AND PROTOCOL BETWEEN GOVERNMENT OF REPUBLIC OF INDIA AND GOVERNMENT OF KINGDOM OF BELGIUM WHICH WERE SIGNED AT BRUSSELS ON 26-4-1993 [10-11-2025]

• Whereas, the Protocol, amending the Agreement and the Protocol between the Government of the Republic of India and the Government of the Kingdom of Belgium for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Brussels on the 26th April 1993, was signed at New Delhi on the 9th March 2017.And whereas the date of entry into force of the said Amending Protocol is the 26th June 2025, the date of the latter of the notifications of the completion of the legal requirements and procedures for giving effect to the said Amending Protocol in accordance with paragraph 2 of Article 4 of the said Amending Protocol.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 directs 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. CIRCULAR NO. 254/11/2025 – GST [F. NO. CBIC – 20010/80/2025 – GST], ASSIGNING PROPER OFFICER UNDER SECTION 74A, SECTION 75(2) AND SECTION 122 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 AND RULES MADE THEREUNDER, DATED 27-10-2025

Earlier circulars (2017 & 2018) assigned proper officers for GST registration, composition levy, and other provisions.

It was observed that no proper officer was assigned for:

• Section 74A – determination of tax for FY 2024-25 onwards
• Section 75(2) – re-determination of demand when fraud charges not sustained
• Section 122 – penalties for offences
• Rule 142(1A) – pre-SCN intimation in DRC-01A

The Board has now assigned proper officers for these provisions:

• Addl./Joint Commissioner – Section 74A (major powers)
• Dy./Asst. Commissioner – Section 122
• Superintendent – Rule 142(1A)

Monetary Limits for Section 74A (Table-II)
For issuing SCN & passing orders:

• Superintendent:
  CGST: up to ₹10 lakh
  IGST: up to ₹20 lakh
  Combined: up to ₹20 lakh
• Dy./Asst. Commissioner:
  CGST: ₹10 lakh–1 crore
  IGST: ₹20 lakh–2 crore
  Combined: ₹20 lakh–2 crore
• Addl./Joint Commissioner:
  Above ₹1 crore (CGST) / ₹2 crore (IGST) – no limit

Key Clarifications under Section 74A

• Proper officer is decided on combined tax amount (CGST + IGST).
• Statements for later periods must follow highest demand amount.
• If later statements exceed officer’s limit, SCN must be moved to higher authority via corrigendum.
• Penalties are not included while calculating monetary limits.
• Audit-issued SCNs → jurisdictional officers handle subsequent statements.

Section 75(2) Clarification: If Appellate Authority cancels a Section 74 notice (fraud not proven) → same adjudicating officer will determine tax as Section 73.

Monetary Limits for Section 122 Penalties (Table-III)

• Superintendent:
  CGST penalty: up to ₹10 lakh
  IGST penalty: up to ₹20 lakh
  Combined: up to ₹20 lakh
• Dy./Asst. Commissioner:
  CGST penalty: ₹10 lakh–1 crore
  IGST penalty: ₹20 lakh–2 crore
  Combined: ₹20 lakh–2 crore
• Addl./Joint Commissioner:
  Above ₹1 crore / ₹2 crore — no limit

Proper officer is determined on combined penalty amount.

B. NOTIFICATION NO. 18/2025 – CENTRAL TAX [F. NO. CBIC-20013/3/…] – CENTRAL GOODS AND SERVICES TAX (FOURTH AMENDMENT) RULES, 2025, DATED 31-10-2025

Effective Date: Rules come into force from 1 November 2025.

New Rule 9A – Electronic Grant of Registration

• Registration will be granted electronically within 3 working days.
• Applies to applications under Rule 8, Rule 12, Rule 17.
• Based on data analysis and risk parameters, regardless of Rule 9 requirements.

Amendments in Rule 10: Rule 10(1) updated to include references to Rule 9A and Rule 14A.

New Rule 14A – Optional Registration for Low Tax-Liability Taxpayers

Eligibility & Conditions

• Taxpayer’s monthly output tax liability ≤ ₹2.5 lakh (B2B + Cess).
• Must apply under Rule 8.
• Aadhaar authentication mandatory (except persons under Sec. 25(6D)).
• Only one registration per State/UT per PAN is allowed under this rule.

Registration Processing: After Aadhaar authentication, registration is granted within 3 working days.

Withdrawal of Option (REG-32)

• Allowed only after filing:
  • 3 months’ returns (if before 01-04-2026), OR
  • 1 tax period return (after 01-04-2026),
  • All pending returns up to application date.
• No withdrawal allowed if Section 29 cancellation proceedings are initiated.
• Any change in REG-01 details must be updated before withdrawal.

Verification & Order

• Application processed under Rule 9 procedures.
• Order for approval: REG-33; rejection: REG-05.
• Once approved, taxpayers can report higher liability from next month only.
• Cannot revise earlier periods to exceed the limit.
• If cancellation proceedings begin, withdrawal application must be rejected.

Changes in Forms

• REG-01
  • Updated to include Rule 14A option.
  • New field: “Opting for registration under Rule 14A – Yes/No”.
  • New declaration added.
  • Aadhaar OTP authentication mandated for Rule 14A applicants.
• REG-02: Updated reference to include Rules 8(5) & 14A.
• REG-03, REG-04, REG-05: New substituted forms include references to Rule 14A.

New Forms Introduced

• REG-32 – Application for Withdrawal (Rule 14A(5))
• REG-33 – Order on Withdrawal Application (Rule 14A(10))

A. MINISTRY OF CORPORATE AFFAIRS (MCA) AMENDMENT TO BOARD-MEETING / LOAN & GUARANTEE RULES

On 3 November 2025, MCA issued Companies (Meetings of Board and its Powers) Amendment Rules, 2025 (G.S.R. 811(E)), substituting sub-rule (2) of Rule 11 of the 2014 Rules.

The amendment clarifies the meaning of “business of financing industrial enterprises” for the purpose of Section 186(11)(a) of the Act.

Under the revised definition:

• For a non-banking financial company (NBFC) registered with Reserve Bank of India (RBI) — giving loans or providing guarantees/security in the ordinary course of business counts.
• For a finance company registered with International Financial Services Centres Authority (IFSCA) — activities permitted under IFSCA (Finance Company) Regulations, 2021 done in ordinary course qualify.

Impact: This provides clarity for NBFCs and IFSCA-regulated finance companies: their routine lending/guarantee business will be treated as regular business, exempting them from restrictive provisions under Section 186 (which govern inter-corporate loans/investments requiring board/shareholder approvals). This reduces compliance burden.

B. EXTENSION / RELAXATION FOR ANNUAL FILINGS (FINANCIAL STATEMENTS & ANNUAL RETURNS)

Although the relevant circular was issued in October 2025, the impact remains valid in November. Under General Circular No. 06/2025 (MCA), companies have been allowed to file their financial statements (AOC-4 series) and annual returns (MGT-7 / MGT-7A) for FY 2024-25 without additional fees until 31 December 2025.

The revised e-Forms (on the updated MCA-21 V3 portal) have been deployed — the relaxation aims to give companies time to adapt to the new digital filing process.

Important caveat: This extension is only for filing — the statutory deadlines for holding Annual General Meetings (AGMs) under the Act remain unaffected. Companies must still comply with AGM timelines under Section 96.

C. STRUCTURAL CHANGE: NEW REGISTRAR-OFFICES SET-UP FOR COMPLIANCE EFFICIENCY

As part of ongoing efforts to improve corporate compliance and ease-of-doing business, MCA (via notification S.O. 4850(E) dated 23 October 2025) has established 10 new Registrar of Companies (RoC) offices under Section 396(1) of the Act. These offices will discharge functions under Companies Act, 2013 and other delegated powers.

The new structure aims for better workload distribution, timely processing of corporate filings/applications, and improved monitoring of compliance. The changes will become effective from 1 January 2026.

D. LABOUR LAW – CODE ON WAGES, 2019, INDUSTRIAL RELATIONS CODE, 2020, CODE ON SOCIAL SECURITY, 2020 AND OCCUPATIONAL SAFETY, HEALTH AND WORKING CONDITIONS CODE, 2020 — ALL COME INTO FORCE

On 21 November 2025, the government officially notified enforcement of all four labour codes nationwide.

With this, 29 older central labour laws have been repealed and replaced by this unified, four-code framework.

Key Provisions & Impacts Under the New Codes

• Mandatory appointment letters & timely wage payment: Employers must issue formal appointment letters to all workers and ensure timely payment of wages.
• Universal social security coverage: Even gig workers, platform workers, contract and fixed-term employees — previously outside many laws — now become eligible for social security benefits (PF, ESIC/insurance/medical cover, maternity benefits, pension, etc.).
• Equal treatment of fixed-term employees: Fixed-term employees get benefits on par with permanent employees — including leave, medical coverage, social security, gratuity (after one year, not earlier 5 years), etc.
• Gratuity eligibility lowered: Gratuity becomes payable after 1 year’s continuous service (instead of earlier threshold).
• Re-skilling fund for retrenched workers: In case of retrenchment, employers must contribute an amount equal to 15 days’ wages per worker to a re-skilling fund — in addition to retrenchment compensation. The amount will be credited within 45 days of retrenchment.
• Uniform wage / salary norms & updated definitions: The new “wages” definition, standardised wage/payment rules, minimum wages, revised overtime rules — affecting payroll structure and compliance across sectors.
• Improved workplace safety, health & working-condition standards: The OSH code standardizes safety, health, leave, working hours and welfare requirements — extending protections to more categories of workers including previously informal & contract workers.

Though the four labour codes are now in force, many supporting rules — both central and state-level — are yet to be notified. Until then, certain situations may rely on a mix of old and new provisions.

E. RBI – UPDATED PAYMENT PROCESS FOR FEMA COMPOUNDING CASES

On 24 November 2025, Reserve Bank of India (RBI) issued a circular amending the “Compounding of Contraventions under Foreign Exchange Management Act, 1999 (FEMA)” directions.

The designated bank account for payment of compounding application fees and compounding amounts has been changed.

All payments under compounding procedures (whether application fee or penalty amount) must now be made only to the new NEFT/RTGS-enabled account specified in the revised Annexure I.

Authorized Persons (banks and other regulated entities) have been instructed to inform their clients/customers about this update — to avoid delays or incorrect remittances.

F. IBC – NEW IBBI GUIDELINES FOR INSOLVENCY PROFESSIONALS [DATED: 21-11-2025]

On 21 November 2025, the Insolvency and Bankruptcy Board of India (IBBI) issued updated guidelines titled Insolvency Professionals to act as Interim Resolution Professionals, Liquidators, Resolution Professionals and Bankruptcy Trustees (Recommendation) Guidelines, 2025.

These guidelines govern eligibility, appointment and conduct of Insolvency Professionals (IPs/RPs) and Bankruptcy Trustees.

Goal: to strengthen professionalism, accountability and integrity in insolvency proceedings — important for all stakeholders in CIRP, liquidation, or bankruptcy processes.

MONTHLY COMPLIANCE CALENDAR

• 7th December – Deposit of TDS/TCS for November 2025
• 10th December – Extended due date for furnishing of Return of Income for AY 2025-26
  Read more at: https://taxguru.in/goods-and-service-tax/statutory-tax-compliance-tracker.html
  Copyright © Taxguru.in
• 11th December – GSTR-1 for month of November 2025
• 15th December – ESI/PF Contribution for month of November 2025
• 15th December – Third Installment of advance tax for FY 2025-26
• 20th December – GSTR-3B for month of November 2025
• 31st December – Filing of annual GST return GSTR-9/9C for FY 2024-25
• 31st December – Extended due date for filing AOC-4/AOC-4 XBRL and MGT-7/MGT-7A for FY 2024-25
• 31st December – Filing of belated/revised ITR for AY 2025-26 for all assessee
  Read more at: https://taxguru.in/goods-and-service-tax/statutory-tax-compliance-tracker.html
  Copyright © Taxguru.in

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 30.11.2025

Executive Summary

Income Tax

• Government notifies revised INDIA-QATAR DTAA
• CBDI authorizes ‘CPC Bengaluru’ to rectify mistakes and issue notice of demand u/s 156 of the Income-Tax Act, 1961
• CBDT extends due date for furnishing return of income for AY 2025-26 under the Income-Tax Act, 1961

Goods And Service Tax (GST)

• Instruction no. 06/2025 – GST [F. No. CBIC – 20006/4/2025 – GST], Section 54 of the Central Goods and Services Tax Act, 2017 – Refund of tax – provisional sanction of refund claims because of identification and evaluation of risk by the system, dated 03-10-2025
• Press release, CBIC introduces system-based auto-approval for IFSC code registration to enhance ease of doing business, dated 07-10-2025

Companies Act 2013/ Other Laws

• MCA Amends IEPF Refund Rules for Unclaimed Securities
• MCA extended the deadline for filing the directors’ KYC forms
• MCA extends last date for filing Financial Statements and Annual Return
• SEBI Rationalizes RPT Disclosure for Listed Entities
• Draft Regulations on Establishment of Branch/Office in India by Overseas Entities
• IBBI (Liquidation Process) (Second Amendment) Regulations, 2025

A. GOVERNMENT NOTIFIES REVISED INDIA-QATAR DTAA [24-10-2025]

• The Government of the Republic of India and the Government of the State of Qatar, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and with a view to promoting economic cooperation between the two countries. The Agreement and Protocol between the Republic of India and the State of Qatar for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, was signed at New Delhi on the 18th day of February, 2025. And whereas, the said Agreement and Protocol entered into force on the 10th day of September, 2025 in accordance with paragraph 2 of Article 30 of the said Agreement and Protocol.

B. CBDT AUTHORIZES ‘CPC BENGALURU’ TO RECTIFY MISTAKES AND ISSSUE NOTICE OF DEMAND U/S 156 OF THE INCOME-TAX ACT, 1961 [27-10-2025]

• In exercise of the powers conferred by sub-sections (1) and (2) of section 120 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby directs that the Commissioner of Income-tax, shall exercise the concurrent powers –(a) to rectify u/s 154 of the IT Act 1961, the mistakes which are apparent from records including any refund issued earlier under the provisions of the Act and/or non-consideration of any pre-paid tax credit and/or non-consideration of any relief eligible and/or calculation of interest u/s 244A of the IT Act 1961, in passing any order under the Income-tax Act resulting in error in computation of the tax and/or refund determined and/or demand;(b) to issue notice of demand under section 156 of the Income-tax Act, 1961 in such cases covered under (a) above.

C. CBDT EXTENDS DUE DATE FOR FURNISHING RETURN OF INCOME FOR AY 2025-26 UNDER THE INCOME-TAX ACT, 1961 [29-10-2025]

• The CBDT has decided to extend the due date of furnishing of return of income u/s 139 of the Act for AY 2025-26, which is October 31, 2025 in the case of assessees referred in clause (a) of Explanation 2 to sub-section (1) of Section 139 of the Act, to December 10, 2025.The ‘specified date’ of furnishing of the report of audit under the provisions of the Income Tax Act, 1961 for Previous Year 2024-25 (AY 2025-26), originally due on September 30, 2025 was extended to October 31, 2025. The CBDT has decided to further extend the said ‘specified date’ from October 31, 2025 to November 10, 2025.

A. INSTRUCTION NO. 06/2025 – GST [F. NO. CBIC – 20006/4/2025 – GST], SECTION 54 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 – REFUND OF TAX – PROVISIONAL SANCTION OF REFUND CLAIMS BECAUSE OF IDENTIFICATION AND EVALUATION OF RISK BY THE SYSTEM, DATED 03-10-2025

Summary of Key Instructions on Risk-Based Provisional Refund Processing

The 56th GST Council Meeting (3rd Sept 2025) recommended amendment to Rule 91(2) of the CGST Rules, 2017, allowing 90% provisional refund based on system-generated risk evaluation. The amendment (effective 1st Oct 2025, via Notification No. 13/2025–CT, dated 17-09-2025) introduces a proviso empowering officers to withhold provisional refunds on a case-by-case basis, with recorded reasons.

Notification No. 14/2025–CT (17-09-2025) also specifies categories of taxpayers not eligible for provisional refund for zero-rated supplies under Section 54(6).

Key Guidelines:

• Low-risk applications (as per system score) – 90% refund to be sanctioned provisionally.
• High-risk applications – no provisional refund; detailed scrutiny required.
• Provisional refund denial only in justified cases (e.g., pending appeal, SCN issued, prosecution, or notified category).
• Proper officer may issue SCN (RFD-08) if excess refund is later detected.
• Timelines for issuing RFD-02/RFD-03 must be strictly followed.

Refunds under Inverted Duty Structure (IDS):

Pending formal amendment to Section 54(6), 90% provisional refund may also be sanctioned for IDS claims filed on or after 1-10-2025, following the same risk-based process.

Monitoring:

Jurisdictional Commissioners to ensure implementation and report compliance. Any operational difficulties to be reported to the Board.

B. PRESS RELEASE, CBIC INTRODUCES SYSTEM-BASED AUTO-APPROVAL FOR IFSC CODE REGISTRATION TO ENHANCE EASE OF DOING BUSINESS, DATED 07-10-2025

CBIC Introduces System-Based Auto-Approval for IFSC Code Registration

In a major step toward trade facilitation and ease of doing business, the Central Board of Indirect Taxes and Customs (CBIC) has implemented system-based auto-approval for IFSC code registration under the Customs Automated System.

Under the new mechanism, once a particular bank account–IFSC code combination is approved for an Importer Exporter Code (IEC) at one Customs location, the same combination will be auto-approved at other locations—eliminating manual approval by Port officers.

Key Benefits:

• Faster processing of bank account and IFSC code approvals.
• Simplified registration across multiple Customs ports.
• Quicker and seamless credit of export incentives to exporters’ bank accounts.
• Enhanced overall trade efficiency and transparency.

Previously, exporters had to seek approval at each port separately, leading to delays and duplication. This initiative reduces manual intervention and supports CBIC’s ongoing commitment to leveraging technology for simplified, paperless, and efficient Customs operations.

A. MCA AMENDS IEPF REFUND RULES FOR UNCLAIMED SECURITIES

The Ministry of Corporate Affairs (MCA) published amendment rules for the Investor Education and Protection Fund Authority (IEPF) — though not strictly an amendment of the Act itself, this touches companies’ obligations regarding unclaimed dividends, investor protection and transfers to IEPF, and should be treated as a compliance-adjacent update.

B. MCA EXTENDED THE DEADLINE FOR FILING THE DIRECTORS’ KYC FORMS

The MCA extended the deadline for filing directors’ KYC (forms DIR-3 KYC and DIR-3 KYC-WEB) by directors from 15 October to 31 October 2025, giving companies and their company secretaries additional time to ensure all director KYC compliance is in place.

C. MCA EXTENDS LAST DATE FOR FILING FINANCIAL STATEMENTS AND ANNUAL RETURNS

The MCA granted a further extension for the filing of annual returns (for FY 2024-25) by companies, allowing filings without additional late fees until 31 December 2025. This provides operational relief and should prompt companies to update their internal compliance calendars.

D. SEBI RATIONALIZES RPT DISCLOSURE FOR LISTED ENTITIES

On 13 October 2025, SEBI issued a circular on disclosures by listed entities in respect of transactions with related parties. The circular introduces a tiered-disclosure framework: for listed companies, related‐party transactions up to ₹1 crore are exempt from detailed disclosures, whereas larger transactions will still require full disclosures.

E. DRAFT REGULATIONS ON ESTABLISHMENT OF BRANCH/OFFICE IN INDIA BY OVERSEAS ENTITIES

On 3 October 2025, the RBI released the draft Foreign Exchange Management (Establishment in India of a Branch or Office) Regulations, 2025, proposing to replace the existing regulations for branch/liaison/project offices of foreign entities in India. Major proposals include:

• Simplifying the framework: consolidating different categories (Branch, Liaison Office, Project Office) into fewer categories and moving from prescriptive eligibility criteria (net worth, profit track record) to a principle-based approach.
• Delegation of more powers to authorised dealer (AD) banks for approvals, thereby reducing direct regulatory approval burdens.

The draft aims to enhance ease of doing business for overseas entities wanting to establish presence in India, subject to FDI policy compliance.

Implication: For corporates with foreign parent/affiliate entities wanting to set up branches/offices in India, this signals an anticipated easing of formalities—review structures and be prepared for transition once final regulations are notified.

F. IBBI (LIQUIDATION PROCESS) (SECOND AMENDMENT) REGULATIONS, 2025

In October 2025, the IBBI issued two significant sets of amendments that impact the insolvency resolution and liquidation processes under the Insolvency and Bankruptcy Code, 2016 (IBC). On 14 October, it notified the “IBBI (Liquidation Process) (Second Amendment) Regulations, 2025”, which remove the provisions in the Liquidation Process Regulations, 2016 for sale of the corporate debtor as a going‐concern (Regulation 32A and related clauses). On the same date, it also notified the “IBBI (Insolvency Resolution Process for Corporate Persons) (Sixth Amendment) Regulations, 2025”, which amend the CIRP Regulations, 2016, notably omitting Regulation 39C (relating to sale of the corporate debtor as a going concern) and modifying Form H and other related provisions. These changes are effective prospectively and reflect IBBI’s push to streamline insolvency and liquidation procedures, aligning them more closely with the resolution-first mandate of the IBC and limiting the ability to shift into liquidation via going concern sales as a standard path.

MONTHLY COMPLIANCE CALENDAR

• 7th November – Deposit of TDS/TCS for October 2025
• 10th November – Extended due date for Tax audit
• 10th November – GSTR-8/ GSTR-7 for month of October
• 11th November – GSTR-1 for month of October 2025
• 15th November – ESI/PF Contribution for month of October 2025
• 15th November – Quarterly TDS certificate for the quarter ending September 30, 2025
• 20th November – GSTR-3B for month of October 2025
• 29th November – File Form MGT-7/7A for companies and OPCs for FY 2024-25
• 30th November – File Form No. 3CEAA by a constituent entity of an international group for FY 2024-25
• 30th November – Due Date for ITR filing ( TP Cases)

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 30.10.2025

Executive Summary

Income Tax

• CBDT extends specified date for filing of various reports of audit for the assessment year 2025-26
• Section 220, read with section 119 of the Income-tax Act, 1961 – waiver of interest payable under section 220(2) due to late payment of demand

Goods And Service Tax (GST)

• Circular No. 251/08/2025 – GST [F. No CBIC – 0001/3/2025 – GS – GST]: Clarification on various doubts related to treatment of secondary or post-sale discounts under GST, dated 12-09-2025
• Notification No. 13/2025-Central Tax, dated 17-09-2025, makes amendments to CGST Rules 2025 (rules 31A, 39, 91, 110, 111, 113), inserts Rule 110A, updates Forms GSTR-9 & 9C, adds Forms GST APL-02A & 04A, and substitutes Forms GST APL-05, 06 & 07
• Notification S.O. 4220(E), dated 17-09-2025, extends the time to file GST Tribunal appeals till 30-06-2026 for orders communicated before 01-04-2026, and sets a 3-month limit for orders communicated after 01-04-2026
• Press release, dated 24-09-2025: Union minister of finance and corporate affairs Smt. Nirmala Sitharaman launches goods and services tax appellate tribunal in New Delhi

Companies Act 2013/ Other Laws

• Fast-track mergers: Expansion of scope
• Companies (Incorporation) Second Amendment Rules, 2025
• MCA extends last date for filing DIR-3 KYC and DIR-3-KYC-WEB
• Ease of Doing Investment – Smooth Transmission of Securities from Nominee to Legal Heir
• Investor Protection and Education Fund (IPEF) Regulations, 2025
• Share Based Employee Benefits (SBEB) Regulations
• Compliance Guidelines for Digital Accessibility Circular ‘Rights of Persons with Act, 2016 and rules made thereunder

A. CBDT EXTENDS SPECIFIED DATE FOR FILING OF VARIOUS REPORTS OF AUDIT FOR THE ASSESSMENT YEAR 2025-26 [25-09-2025]

• The ‘specified date’ of furnishing of the report of audit under any provision of the Income-tax Act, 1961, for the Previous Year 2024-25 (Assessment Year 2025-26), in the case of assessee referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the Act, is 30th September 2025. However, keeping in view representations by Tax practitioners and submissions before Hon’ble Courts, the ‘specified date’ is extended to 31st October, 2025.

B. SECTION 220, READ WITH SECTION 119 OF THE INCOME-TAX ACT, 1961 – WAIVER OF INTEREST PAYBLE UNDER SECTION 220(2) DUE TO LATE PAYMENT OF DEMAND [19-09-2025]

• The provisions of section 115BAC(1A) of the Income-tax Act, 1961 are subject to other provisions of Chapter XII. Incomes chargeable to tax at special rates under Chapter XII are excluded while determining tax liability under section 115BAC(1A). Clause (b) proviso to section 87A applies to incomes chargeable under section 115BAC(1A).
• In certain cases, returns were processed allowing rebate under section 87A erroneously on incomes taxed at special rates; rectifications to disallow rebate will cause demands to be raised. Payment delays will attract interest under section 220(2).
• The Board, under section 119, directs waiver of interest under section 220(2) if payment of demands raised by rectification orders is made on or before 31.12.2025. Failure to pay will attract interest from next day after expiry of this period.

A. CIRCULAR NO. 251/08/2025 – GST [F. NO CBIC – 0001/3/2025 – GS – GST]: CLARIFICATION ON VARIOUS DOUBTS RELATED TO TREATMENT OF SECONDARY OR POST-SALE DISCOUNTS UNDER GST, DATED 12-09-2025

Clarifications on Secondary / Post-Sale Discounts (u/s 168 of CGST Act, 2017)

ITC on Financial/Commercial Credit Notes

Recipients eligible for full ITC even if supplier issues financial/commercial credit notes

Suppliers cannot reduce tax liability; recipient need not reverse ITC

Post-Sale Discounts – Treatment as Consideration

Normally, discount is not considered for dealer’s sale to end customer (principal-to-principal basis)

If manufacturer has agreement with end customer (dealer passing discount), discount is a reward and part of consideration

Post-Sale Discounts vs. Promotional Services

Discount reduces sale price; not treated as payment for promotional services

GST applies only if dealer provides specific promotional services with separate consideration

Action Points

Trade notices to be issued for uniformity

Difficulties, if any, to be reported to Board

B. NOTIFICATION NO. 13/2025-CENTRAL TAX, DATED 17-09-2025

C. NOTIFICATION S.O. 4220(E), DATED 17-09-2025

• Extends the time to file GST Tribunal appeals till 30-06-2026 for orders communicated before 01-04-2026
• Sets a 3-month limit for orders communicated after 01-04-2026

D. PRESS RELEASE, DATED 24-09-2025: UNION MINISTER OF FINANCE AND CORPORATE AFFAIRS SMT. NIRMALA SITHARAMAN LAUNCHES GOODS AND SERVICES TAX APPELLATE TRIBUNAL IN NEW DELHI

• Independent forum for GST dispute resolution ensuring fair, fast, and transparent justice
• Tribunal structure: 31 State Benches + Principal Bench in New Delhi; Bench composition: 2 Judicial + 1 Centre Technical + 1 State Technical Member
• Digital features: GSTAT e-Courts portal for online filings, case tracking, virtual hearings; filing window extended to 30th June 2026
• Benefits: Swift resolution, reduced delays, consistent rulings, and strengthened trust between taxpayers and government

A. FAST-TRACK MERGERS: EXPANSION OF SCOPE

Through MCA notification G.S.R. 603(E) dated 4th September 2025, the scope of fast-track mergers under Section 233 was expanded through the Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025. The amendment allows a wider range of companies to adopt the fast-track route, reducing burden on NCLTs and shifting simpler cases to Regional Directors. Inclusions include mergers between holding and subsidiary companies (not wholly owned, if transferor not listed), mergers between unrelated unlisted companies as per borrowing/compliance thresholds, and mergers between fellow subsidiaries under common control. This facilitates quicker restructuring and ease of doing business.

B. COMPANIES (INCORPORATION) SECOND AMENDMENT RULES, 2025

MCA notified Companies (Incorporation) Second Amendment Rules, 2025 effective 15th September 2025, substituting the existing Form RD-1 with a revised format, streamlining filings with Regional Director. These reflect efforts to simplify corporate procedures and enhance governance under Companies Act, 2013.

C. MCA EXTENDS LAST DATE FOR FILING DIR-3 KYC AND DIR-3-KYC-WEB

MCA issued General Circular No. 04/2025 dated 29 September 2025, extending due date for e-Form DIR-3 KYC and DIR-3 KYC-WEB without late fee from 30 September 2025 to 15 October 2025, responding to stakeholder requests for more compliance time.

A. EASE OF DOING INVESTMENT – SMOOTH TRANSMISSION OF SECURITIES FROM NOMINEE TO LEGAL HEIR

• In India, securities holders nominating persons leads securities to pass first to nominee, who must transmit to legal heirs.
• Transmission from nominee to legal heir sometimes treated as capital gain transfer, causing tax complications and delays, though section 47 clause (iii) excludes this transmission from transfer definition.
• SEBI circular SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/130 (dated 19 September 2025) clarifies and simplifies this process.

B. INVESTOR PROTECTION AND EDUCATION FUND (IPEF) REGULATIONS, 2025

On 2 September 2025, SEBI amended IPEF Regulations, revising categories for Fund credit (Reg 4) and streamlining utilization framework (Reg 5) for investor education, awareness, and protection. The amendments reflect SEBI’s focus on retail investor confidence and market safeguarding.

C. SHARE BASED EMPLOYEE BENEFITS (SBEB) REGULATIONS

SEBI notified amendments on 8 September 2025, refining governance, transparency, and disclosure for employee stock options and benefit schemes, tightening compliance and clarifying disclosures to protect employees and shareholders.

D. COMPLIANCE GUIDELINES FOR DIGITAL ACCESSIBILITY CIRCULAR ‘RIGHTS OF PERSONS WITH ACT, 2016 AND RULES MADE THEREUNDER

SEBI circular dated 31 July 2025 mandated digital accessibility for Regulated Entities’ digital platforms per the Rights of Persons with Disabilities Act, 2016. The 25 September 2025 circular (No. 131) provides compliance guidelines including clarifications, roadmap, reporting, and responsibilities to remove barriers for investors with disabilities.

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 30.09.2025

Executive Summary

Income Tax

• Section 143- Processing of Return filed under section 139 beyond the prescribed time limit.
• Section 143- Guidelines for compulsory selection of returns for complete scrutiny during FY 2025-26.

Goods And Service Tax (GST)

• Generation and quoting of document identification number (DIN) on any communication issued by the officers of the central board of indirect taxes and customs to taxpayers and other concerned persons, Circular no. 249/06/2025-gst [F No. GST/INV/UTILITY/2022-23], dated 9-6-2025
• Guidelines for mandatory conduct of personal hearings through virtual mode in all proceedings under the Delhi GST Act, 2017 and the Rules framed there under, Circular No. F.3 (640)/GST/ P & R/2025/348-55, dated 13-06-2025
• Corrigendum G.S.R. 389 (E) [F.No. A-50050/264/2024-GSTAT-DOR], dated 18-6-2025, Goods and services tax appellate tribunal (procedure) rules, 2025
• Circular No. 250/07/2025-GST dated 24-06-25, Reviewing authority, Revisional Authority and Appellate Authority in respect of orders passed by Common Adjudicating Authority (CAA) for show cause notices issued by DGGI

Companies Act 2013/ Other Laws

• MCA revamps corporate reporting with new disclosure norms effective July 14, 2025
• Companies (audit and auditors) amendment rules, 2025 – amendment in rule 13; substitution of forms ADT-1, ADT-2, ADT-3 and ADT-4
• Companies (registration offices and fees) amendment rules, 2025 – substitution of form GNL-1
• Companies (filing of documents and forms in extensible business reporting language) amendment rules, 2025 – amendment in rule 3; substitution of E-form AOC-4 XBRL
• Limited relaxation from compliance with certain provisions of the SEBI (listing obligations and disclosure requirements) regulations, 2015
• Modifications Under The International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing And Know Your Customer) Guidelines, 2022

A. Section 143, Read with sections 119 and 139 of the Income Tax Act, 1961- Assessment- Processing of Return filed under Section 139 beyond prescribed time limit, Dated 09-06-2025

• Central Board of Direct Taxes, in exercise of its powers under section 119(2)(a) of the Income-tax Act,1961, hereby relaxes the time-frame prescribed in second proviso to sub-section (1) of section 143 of the Act and directs that electronically filed valid returns of income filed u/s 139 of the Act for Assessment Years (AY) 2023-24, for which date of sending intimation under sub-section (1) of section 143 of the Act has lapsed, shall be processed now and intimation under sub-section (1) of section 143 of the Act shall be sent to the assessee concerned by 31-11-2025.

 The relaxation accorded above shall not be applicable to the following returns:

1. returns selected in scrutiny;
2. returns remain unprocessed for any reason attributable to the assessee.

B. Section 143 of the Income Tax Act, 1961 – Scrutiny Assessment- Guidelines for compulsory selection of returns for complete scrutiny during FY 2025-26, Dated 13-06-2025

• It is clarified that where return has been furnished in response to notice u/s 142(1) of the Act and such notice u/s 142(1) of the Act was issued due to the information contained in NMS Cycle/ AIS/ Statement of Financial Transactions (SFT)/ CPC-TDS information/ information received from Directorate of I&CI, such return will not be taken up for compulsory scrutiny. Selection of such cases for scrutiny will be done through the CASS cycle.

Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents for access by NaFAC in the following cases which are to be completed by NaFAC on or before 31-03-2026 and Notice u/s 143(2)/142(l) of the Act calling for information shall be served on the assessee through NaFAC in these cases’.

1. Cases (other than search & seizure/survey) in which notices u/s 148 of the Act have been issued where return is either furnished or not furnished in response to notice u/s 148 of the Act.
2. Cases in which notices u/s 142(1) of the Act calling for return, have been issued & no returns have been furnished.

Cases, where notices u/s 148 of the Act have been issued pursuant to search & seizure/survey actions conducted on or after the 1-04-2021 but before 1-09-2024, if lying outside Central Charges,

1. where return is furnished, the Jurisdictional Assessing Officer (JAO) concerned shall serve the Notice u/s 143(2) of the Act and Pr.CIT/Pr.DIT/CIT/DIT concerned shall ensure that such cases are transferred to central charges u/s 127 of the Act.
2. Where return is not furnished, these cases shall be transferred to central charges for further necessary action.

A.Generation and quoting of document identification number (DIN) on any communication issued by the officers of the central board of indirect taxes and customs to taxpayers and other concerned persons, Circular no. 249/06/2025-gst [F No. GST/INV/UTILITY/2022-23], dated 9-6-2025

CBIC had earlier made quoting of Document Identification Number (DIN) mandatory through Circulars 122/41/2019-GST and 128/47/2019-GST to ensure transparency. However, since GST portal-generated documents already contain a verifiable Reference Number (RFN) providing full details and are considered valid under Section 169(1)(d) of the CGST Act, 2017, and as per Instruction No. 4/2023-GST, it is now clarified that quoting DIN is not required for such communications. The presence of both DIN and RFN creates duplication, which is unnecessary.

B.Guidelines for mandatory conduct of personal hearings through virtual mode in all proceedings under the Delhi GST Act, 2017, and the Rules framed thereunder, Circular No. F.3 (640)/GST/ P & R/2025/348-55, dated 13-06-2025

• All personal hearings to be conducted only through virtual mode (e.g., Webex, Google Meet).
• Link, date & time shared in advance via email/mobile.
• Taxpayers must share ID proof, vakalatnama, and ensure technical readiness.
• Maintain proper decorum; hearings are legally valid under the GST & IT Act.
• Hearing records sent via email, adjournments via BO portal.
• Emails allowed for additional documents; physical copies if specifically needed.

In-person hearings are only in rare cases, with the Zonal In-Charge’s approval

C. Corrigendum G.S.R. 389 (E) [F.No. A-50050/264/2024-GSTAT-DOR], dated 18-6-2025, Goods and services tax appellate tribunal (procedure) rules, 2025

• Background: CAA (Joint/Addl. Commissioner) adjudicates SCNs issued by DGGI (as per Notification 02/2017 & Circular 239/33/2024-GST). Earlier circulars didn’t clarify review, revision, and appeal procedure for such orders.
• Clarifications Issued:
• Reviewing Authority (Section 107, CGST Act): Principal/Commissioner of Central Tax under whom the CAA is posted.
• Revisional Authority (Section 108, CGST Act): Same Principal/Commissioner of Central Tax under whom the CAA is posted.
• Appellate Authority (Section 107, CGST Act): Commissioner (Appeals) with territorial jurisdiction of the CAA’s reporting Commissionerate (as per Table III of Notification 02/2017).
• Department Representation in Appeals:
• Concerned, the Principal/Commissioner shall represent the department.
• May nominate a subordinate officer for filing appeals

DGGI comments on the Orders-in-Original (O-I-O) can be sought before review/revision.

D. Circular No. 250/07/2025-GST dated 24-06-25, Reviewing authority, Revisional Authority and Appellate Authority in respect of orders passed by Common Adjudicating Authority (CAA) for show cause notices issued by DGGI

• Joint/Addl. Commissioners act as Common Adjudicating Authorities (CAA) for DGGI SCNs (as per Notification 02/2017 & Circular 239/33/2024-GST).
• Principal/Commissioner under whom CAA is posted will be: Reviewing Authority (Sec. 107) and Revisional Authority (Sec. 108)
• Appeals to be filed before the Commissioner (Appeals) of CAA’s jurisdiction.
• Same Principal/Commissioner to represent the department and can authorize subordinates.
• DGGI comments on the order may be taken before review/revision.
• Trade notices to be issued; implementation issues to be reported to the Board.

A. MCA REVAMPS CORPORATE REPORTING WITH NEW DISCLOSURE NORMS EFFECTIVE JULY 14, 2025

The Ministry of Corporate Affairs (MCA) has notified the Companies (Accounts) Second Amendment Rules, 2025, effective from July 14, 2025, introducing significant changes to corporate disclosures and filings. Key updates include mandatory detailed disclosures in the Board’s Report on sexual harassment complaints and a statement of compliance under the Maternity Benefit Act, 1961. Companies must also submit new e-Forms capturing extracts of the Board’s Report and Auditor’s Reports in a machine-readable format alongside the full financial statements. The rules formalize the shift to electronic filing by replacing all references from “Form” to “e-Form.” These amendments aim to enhance corporate governance, ensure accountability, and enable better data analysis by regulators. Companies must promptly align their internal processes and ensure compliance, with strict penalties for false filings under Sections 448 and 449 of the Companies Act, 2013.

B. COMPANIES (AUDIT AND AUDITORS) AMENDMENT RULES, 2025 -AMENDMENT IN RULE 13; SUBSTITUTION OF FORMS ADT-1, ADT-2, ADT-3 AND ADT-4

The Companies (Audit and Auditors) Amendment Rules, 2025, notified on May 30, 2025, and effective from July 14, 2025, introduce key updates to Rule 13 of the Companies (Audit and Auditors) Rules, 2014. The amendment mandates electronic filing of the auditor’s report in Form ADT-4 by substituting clause (d) and omits clauses (e) and (f) of Rule 13(2). Additionally, Forms ADT-1, ADT-2, ADT-3, and ADT-4 have been completely revised and replaced with updated versions in the Annexure. These changes align with the government’s push for digital compliance and streamlined reporting under the Companies Act, 2013.

C.COMPANIES (REGISTRATION OFFICES AND FEES) AMENDMENT RULES, 2025 – SUBSTITUTION OF FORM GNL-1

The Companies (Registration Offices and Fees) Amendment Rules, 2025, notified via G.S.R. 360(E) on May 30, 2025, and effective from July 14, 2025, introduce a key change to the Companies (Registration Offices and Fees) Rules, 2014. The amendment substitutes the existing Form GNL-1 with a revised version in the Annexure. This change is part of the government’s continued efforts to modernize and streamline company filings under the Companies Act, 2013.

D. COMPANIES (FILING OF DOCUMENTS AND FORMS IN EXTENSIBLE BUSINESS REPORTING LANGUAGE) AMENDMENT RULES, 2025 – AMENDMENT IN RULE 3; SUBSTITUTION OF EFORM AOC-4 XBRL

The Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Amendment Rules, 2025, notified on June 6, 2025, and effective from July 14, 2025, introduce key changes to XBRL filings. Companies filing financial statements in eForm AOC-4 XBRL must now also attach a signed PDF copy of the complete financial statements, including the Board’s Report, Auditor’s Report, and other documents as per Section 134 of the Companies Act, 2013. Additionally, the format of eForm AOC-4 XBRL in Annexure-I has been substituted with a revised version. These changes aim to enhance the authenticity and completeness of digital filings.

A. MODIFICATIONS UNDER THE INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY (ANTI MONEY LAUNDERING, COUNTER-TERRORIST FINANCING AND KNOW YOUR CUSTOMER) GUIDELINES, 2022

IFSCA’s circular dated June 5, 2025, updates its AML/CFT and KYC Guidelines to align with amended PML Rules. Key updates include:

• Removal of “city council tax receipts” as address proof.
• Customers using alternate address documents must submit updated OVDs within 3 months.
• Regulated Entities must use KYC Identifiers from CKYCR and avoid duplicate KYC unless necessary.
• Any KYC updates must be shared with CKYCR within 7 days; CKYCR will inform other linked entities.
• Applies to banks, insurers, brokers, fund managers, and other financial entities.
• Indian nationals’ KYC must be uploaded to CKYCR; for foreign nationals, specified documents are acceptable.

A. LIMITED RELAXATION FROM COMPLIANCE WITH CERTAIN PROVISIONS OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

SEBI, via Circular No. SEBI/HO/DDHS/DDHS-PoD-1/P/CIR/2025/83 dated June 5, 2025, has extended relaxation from compliance with Regulation 58(1)(b) of the SEBI LODR Regulations for listed entities with non-convertible securities. This regulation mandates sending hard copies of salient financial document summaries to security holders without registered email IDs.

In line with MCA’s General Circular No. 9/2024, SEBI has:

• Exempted penal action for non-sending of hard copies during the period October 1, 2024 to June 5, 2025, provided MCA conditions are met.
• Extended similar relaxation from June 6 to September 30, 2025, on the condition that web-links to the financial summaries are provided in advertisements as per Regulation 52(8).

This circular is effective immediately and aims to reduce compliance burden while ensuring digital accessibility of financial information.

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 31.05.2025

Executive Summary

Income Tax

• Section 37(1)- Enforcement of Section 152 And 153.
• Section 139- Extension of Due Date to file Return of Income to 15^th September, 2025.
• Income Tax Amendments Rules- Substitution of ITR Forms.

Goods And Services Tax (GST)

• Grievance redressal mechanism for processing of application for GST registration, Instruction no. 4/2025 – GST [F.No. CBIC – 20016/24/2025 – GST], dated 02-05-2025
• Timely production of records/information for audit Instruction no. 5/2025 – GST [F. No. Ccb-20015/2/2025 – GST], dated 02-05-2025

Companies Act 2013/ Other Laws

• MCA issued Companies (Indian Accounting Standards) Amendment Rules, 2025
• MCA issued Companies (Cost Records and Audit) Amendment Rules, 2025
• Ministry of Corporate Affairs amends Annual Filing Forms MGT-7, MGT-7A, and MGT-15
• Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
• Reporting on Firms Portal – Issuance of Partly Paid Units by Investment Vehicles
• Process for appointment, Re-appointment, termination, or acceptance of resignation of specific Key Management
• Personnel (KMPs) of a Market Infrastructure Institution (MII) – Cooling-Off Period for KMPs of an MII joining a Competing MII – Provision relating to re-appointment of Public Interest Directors (PIDs)

A. Section 37(1) of the Income Tax Act, 1961- Enforcement of Section 152 and 153, Dated 06-05-2025

In exercise of the powers conferred by section 151 of the Finance Act, 2017 (7 of 2017), the Central Government hereby appoints the 9th day of May, 2025 as the date on which sections 152 and 153 of the said Act, relating to amendments in the Payment and Settlement Systems Act, 2007 (51 of 2007), shall come into force.

B. Section 139 of the Income Tax Act, 1961 – Extension of Due Date for furnishing Return of Income for A.Y. 2026-27, Dated 27-05-2025

The Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Income-tax Act, 1961 (‘the Act\ extends the due date of furnishing of Return of Income under sub-section (1) of section 139 of the Act for the Assessment Year 2025-26 in the case of assessees referred in clause (c) of Explanation 2 to sub-section (1) of section 139 of the Act, which is 31st July, 2025 to 15th September, 2025.

C. Income Tax Amendment Rules, 2025 – Substitution of ITR Forms

In exercise of the powers conferred by section 139, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:

• Income-Tax Twelfth Amendment Rules, 2025- Substitution of Forms- ITR 1 and ITR 4
• Income-Tax Thirteenth Amendment Rules, 2025- Substitution of Forms- ITR 3
• Income-Tax Fourteenth Amendment Rules, 2025- Substitution of Forms- ITR 5
• Income-Tax Fifteenth Amendment Rules, 2025- Substitution of Forms- ITR 2
• Income-Tax Sixteenth Amendment Rules, 2025- Substitution of Forms- ITR 6
• Income-Tax Seventeenth Amendment Rules, 2025- Substitution of Forms- ITR V
• Income-Tax Eighteenth Amendment Rules, 2025- Substitution of Forms- ITR 7
• Income-Tax Nineteenth Amendment Rules, 2025- Substitution of Forms- ITR U

A. Grievance redressal mechanism for processing of application for GST registration, Instruction no. 4/2025 – GST [F.No. CBIC – 20016/24/2025 – GST], dated 02-05-2025

Grievance Redressal for GST Registration – Central Jurisdiction

As per CBIC Instruction No. 3/2025 dated 17.04.2025:

1. Applicants under Central Jurisdiction facing issues with queries or rejection of GST registration can contact the Zonal Principal Chief Commissioner/Chief Commissioner.
2. For faster grievance redressal:

• Zones must share a dedicated email ID for grievance submission.
• Applicants should email ARN, jurisdiction (Centre/State), and the issue briefly.
• If it concerns State jurisdiction, it will be forwarded to the State authority and the GST Council Secretariat.

3. Chief Commissioners must:

• Ensure timely resolution and inform applicants.
• Advise applicants if queries are valid.
• Send a monthly report to DGGST for Board review.

4. Any implementation issues should be reported to the Board.

B. Timely production of records/information for audit Instruction no. 5/2025 – GST [F. No. CCB-20015/2/2025 – GST], dated 02-05-2025

Submission of Records to the Comptroller and Auditor General of India, Audit Teams

1. Report 7 of 2024 flagged non/partial sharing of records with audit teams.
2. As per Article 149, the Comptroller and Auditor General of India has the authority to audit the government. accounts and entities.
3. Field officers must provide all required records/information to the Comptroller and Auditor General of India’s audit teams without delay.
4. If records are with the taxpayer, send them a request letter and follow up to ensure timely submission. These issues are with the approval of the Chairman, CBIC.

A. MCA Issued Companies (Indian Accounting Standards) Amendment Rules, 2025

The Ministry of Corporate Affairs (MCA) issued a notification on May 7, 2025, enacting the Companies (Indian Accounting Standards) Amendment Rules, 2025. These rules amend the Companies (Indian Accounting Standards) Rules, 2015, primarily focusing on Indian Accounting Standard (Ind AS) 21, which deals with the effects of changes in foreign exchange rates. The amendments introduce detailed guidance on assessing whether a currency is exchangeable into another currency, estimating the spot exchange rate when a currency is not exchangeable, and the required disclosures in such circumstances. Definitions and application guidance are added to clarify terms and processes related to exchangeability for different purposes, such as reporting foreign currency transactions or translating foreign operations. Corresponding amendments are also made to Ind AS 101 regarding first-time adoption of Ind AS in the context of severe hyperinflation and non-exchangeable currencies. These amendments are applicable for annual reporting periods beginning on or after April 1, 2025, with specific transitional provisions outlined.

Effective April 1, 2025, companies delaying payments to Micro and Small Enterprises (MSEs) beyond 45 days will face.

B. MCA issued Companies (Cost Records and Audit) Amendment Rules, 2025.

The Ministry of Corporate Affairs (MCA) has issued a new notification, G.S.R. 361(E), bringing important changes to how companies manage and report their cost audits. These changes are part of the Companies (Cost Records and Audit) Amendment Rules, 2025, and will come into effect from July 14, 2025. The focus of this amendment is to replace and modernize two key forms used by companies: Form CRA-2 and Form CRA-4. These forms are used to appoint cost auditors and to file cost audit reports with the Central Government.

C. Ministry of Corporate Affairs amends Annual Filing Forms MGT-7, MGT-7A, And MGT-15

The Ministry of Corporate Affairs (MCA) has recently released an official notification dated 30th May, 2025, regarding some rules further added to amend the Companies (Management and Administration) Rules, 2014, by the Central Government of India, in exercise of its powers granted under sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), specifically:

• These amended rules may now be called the Companies (Management and Administration) Amendment Rules, 2025.
• These amendments will be made effective from the 14th day of July, 2025.
• In the Companies (Management and Administration) Rules, 2014, the forms MGT-7, MGT-7A, and MGT-15 are being replaced with new e-forms.

1. Insolvency and Bankruptcy Board of India amends The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016

The Insolvency and Bankruptcy Board of India (IBBI/Board) has notified the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2025 (Amendment Regulations) on 26th May, 2025. The amendments, which come into immediate effect, aim to further streamline and strengthen the corporate insolvency resolution process.

Key highlights of the Amendment Regulations are as follows:—

FEMA

1. Reporting on Firms Portal – Issuance of Partly Paid Units by Investment Vehicles

Investment vehicles issuing partly paid units to non-residents must report these transactions on the FIRMS (Foreign Investment Reporting and Management System) portal using Form InVI. A special one-time window allows for reporting within 180 days from the date of the circular for issuances before May 23, 2025, without late submission fees. Issuances made on or after May 23, 2025, must be reported within 30 days, as per existing regulations.

A. Process for appointment, Re-appointment, termination, or acceptance of resignation of specific Key Management Personnel (KMPs) of a Market Infrastructure Institution (MII) – Cooling-Off Period For KMPs of an MII joining a Competing MII – Provision relating to re-appointment of Public Interest Directors (PIDs)

Market Infrastructure Institutions (MIIs) such as stock exchanges, clearing corporations, and depositories. Here’s an overview of the key provisions concerning the appointment, reappointment, termination, and cooling-off periods for Key Management Personnel (KMPs) and Public Interest Directors (PIDs

1. Appointment, Reappointment, and Termination of Specific KMPs

SEBI has mandated that the appointment, reappointment, or termination of specific KMPs—including the Compliance Officer (CO), Chief Risk Officer (CRO), Chief Technology Officer (CTO), and Chief Information Security Officer (CISO)—must receive approval from the Governing Board of the MII. Previously, these decisions were within the purview of the Nomination and Remuneration Committee (NRC) of the MII.

2. Cooling-Off Period for KMPs and Directors Joining Competing MIIs

The Governing Board of an MII may prescribe a minimum cooling-off period for its KMPs and Directors—including the Managing Director (MD) and PIDs—before they can join a competing MII. However, SEBI will no longer prescribe a mandatory cooling-off period for PIDs transitioning from one MII to another.

3. Reappointment of Public Interest Directors (PIDs)

The existing process for the appointment of PIDs, which requires prior approval from SEBI but does not mandate shareholder approval, will continue. If the Governing Board of an MII decides not to reappoint an existing PID after their first term, it must record the rationale for this decision and communicate it to SEBI.

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 31.05.2025

Executive Summary

Income Tax

• Section 37(1)- No deduction or allowance in respect of expenses incurred to settle proceedings in relation to contraventions or defaults.
• Section 89(1)(L), Last date to file declaration of tax arrears with the Designated Authority.
• Section 54EC, No capital gains tax if the amount is invested in specified bonds.
• Ninth Amendment Rules, 2025
• Tenth Amendments Rules, 2025
• Eleventh Amendment Rules, 2025
• Section 206C– TCS under section 206C(1F) shall be liable on notified goods exceeding specified value

Goods And Services Tax (GST)

• Notification no. 11/2025 – Central Goods and Services Tax (Second Amendment) Rules, 2025 – Amendment in Rule 164, dated 27-03-2025
• Circular no. 248/05/2025 – GST, various issues related to availment of benefit of Section 128A of the CGST Act, 2017, dated 27-03-2025
• Frequently Asked Questions on ‘Restaurant Service’ Supplied At ‘Specified Premises’, dated 28-03-2025
• Instruction no. 3/2025 – GST, instructions for processing applications for gst registration, dated 17-04-2025
• Press release, the government is not considering levying Goods and Services Tax (GST) on UPI transactions over INR 2,000, dated 18-04-2025
• S.R. 256(E) – GST Appellate Tribunal Rules, 2025, dated 24-05-2025

Companies Act 2013/ Other Laws

• Stricter Compliance for Delayed Payments to MSMEs
• Second Amendment to CIRP Regulations
• Focus on the Real Estate Sector in CIRP
• Capping of Penalties for FEMA Violations
• Enhanced Disclosures by Foreign Portfolio Investors (FPIs)

A. SECTION 37(1) OF THE INCOME-TAX ACT, 1961 – BUSINESS EXPENDITURE – ALLOWABILITY OF – NO DEDUCTION OF ALLOWANCE IN RESPECT OF EXPENSES INCURRED TO SETTLE PROCEEDINGS UNDER NOTIFIED LAWS, DATED 23-04-2025

In exercise of the powers conferred by clause (iv) of Explanation 3 of sub-section (1) of section 37 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that any expenditure incurred to settle proceedings initiated about contravention or defaults under the following laws shall not be deemed to have been incurred for business or profession and no deduction or allowance shall be made in respect of such expenditure, namely: —

(a)  The Securities and Exchange Board of India Act, 1992 (15 of 1992);

(b)  The Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(c)  The Depositories Act, 1996 (22 of 1996);

(d)  The Competition Act, 2002 (12 of 2003).

This notification shall come into force on the date of its publication in the Official Gazette.

B. SECTION 89(1)(L) OF THE FINANCE (NO.2) ACT, 2024 – LAST DATE FOR FILING DECLARATION IN RESPECT OF TAX ARREAR TO DESIGNATED AUTHORITY, DATED 08-04-2025

In exercise of the powers conferred by clause (l) of sub-section (1) of section 89 of the Finance (No. 2) Act, 2024 (15 of 2024), the Central Government hereby notifies under the Direct Tax Vivad se Vishwas Scheme, 2024, the 30th day of April, 2025 as the last date, on or before which a declaration in respect of tax arrears shall be filed by the declarant to the designated authority, per the provisions of section 90 of the said Act.

C. SECTION 54EC OF THE INCOME-TAX ACT, 1961 – CAPITAL GAINS NOT TO BE CHARGED ON INVESTMENT IN CERTAIN BONDS – NOTIFIED BONDS, DATED 07-04-2025

1. In exercise of the powers conferred by clause (ba) of Explanation to section 54EC of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that bonds redeemable after five years and issued on or after 1st day of April, 2025, by the Housing and Urban Development Corporation Limited (HUDCO) (a public financial institution notified by the Central Government under section 2(72) of the Companies Act, 2013), as ‘long-term specified asset’ for the said section.
2. HUDCO shall utilize the proceeds from such bonds only for those infrastructure projects that can service the debt out of the project revenues without being dependent on the State Governments for the service of debts.

D. INCOME-TAX (NINTH AMENDMENT) RULES, 2025 – AMENDMENT IN RULE 114, DATED 03-04-2025

In exercise of the powers conferred by sub-section (2A) of section 139AA, read with section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Ninth Amendment) Rules, 2025.

(2) They shall come into force with effect from the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in rule 114, after sub-rule (5A), the following shall be inserted, namely:—

“(5AA) Every person who has been allotted permanent account number on the basis of Enrolment ID of Aadhaar application form filed prior to the 1st day of October, 2024, shall intimate his Aadhaar number to the Principal Director General of Income-tax (Systems) or Director General of Income-tax (Systems) or the person authorized by the said authorities.”

Such intimation shall be made on or before the 31st day of December, 2025 or such date as may be specified by the Central Board of Direct Taxes in this behalf.

E. INCOME-TAX (TENTH AMENDMENT) RULES, 2025 – INSERTION OF RULE 12AE AND FORM ITR-B, DATED 07-04-2025

In exercise of the powers conferred by section 158BC, read with section 295 of the Income-tax Act, 1961, the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:—

1. (1) These rules may be called the Income-tax (Tenth Amendment) Rules, 2025.

(2) They shall be deemed to have come into force on the 1st day of September 2024.

2. In the Income-tax Rules, 1962, after rule 12AD, the following rule shall be inserted, namely: ––

“12AE. Return of income under section 158BC.—

(1) The return of income required to be furnished by any person under clause (a) of sub-section (1) of section 158BC, relating to any search initiated under section 132 or requisition made under section 132A on or after the 1st day of September, 2024 shall be in the Form ITR-B and be verified in the manner indicated therein.

(2) The return of income referred to in sub-rule (1) shall be furnished by a person, mentioned in column (2) of the Table below in the manner specified in column (3) thereof: ––

(3) The Principal Director-General of Income-tax (Systems) or Director-General of Income-tax (Systems) shall specify the procedures, formats and standards for ensuring secure capture and transmission of data and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to furnishing the return in the manners specified in column (3) of the Table.

(4) In a case where the claim of credit of the tax payments is made against undisclosed income of the block period other than by way of self-assessment tax for the block period, claim of such credits and the allowability thereof shall be subject to the verification by and satisfaction of, the Assessing Officer.”

F. INCOME-TAX (ELEVENTH AMENDMENT) RULES, 2025 – AMENDMENT IN FORM NO. 27EQ, DATED 21-04-2025

In exercise of the powers conferred by section 295, read with section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: —

1. (1) These rules may be called the Income-tax (Eleventh Amendment) Rules, 2025.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962, in Form No. 27EQ, in the Annexure, in the Notes thereto, in Note 11, in the table, after the row relating to “Collection at source on sale of motor vehicle”, the following shall be inserted, namely:—

G. SECTION 206C OF THE INCOME TAX ACT, 1961 – TCS- NOTIFIED GOODS EXCEEDING SPECIFIED VALUE IN RESPECT OF WHICH COLLECTION OF TAX SHALL BE MADE UNDER SUB-SECTION (1F) OF SAID SECTION, DATED 22-04-2025

In exercise of the powers conferred by clause (ii) of sub-section (1F) of section 206C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies the following goods of the value exceeding ten lakh rupees for collection of tax at source as specified therein —

This notification shall come into force on the date of its publication in the Official Gazette.

A. NOTIFICATION NO. 11/2025- CENTRAL GOODS AND SERVICES TAX (SECOND AMENDMENT) RULES, 2025 – AMENDMENT IN RULE 164, DATED 27-03-2025

Central Goods and Services Tax (Second Amendment) Rules, 2025 – Key Changes:

1. Amendments to Rule 164:
   1. Changes in Sub-rule (4):

• No Refund: No refund will be granted for any tax, interest, or penalty already paid for periods before the 2025 amendment.
• Partial Withdrawal of Appeal: If an appeal involves both eligible (1st July 2017 – 31st March 2020) and non-eligible periods, the applicant can choose to opt out only for the eligible period.
  1. Changes in Sub-rule (7):
• No Need to Fully Withdraw Appeal: The applicant does not have to withdraw the entire appeal; they only need to inform the authority about opting out for the eligible period.
• Deemed Withdrawal: The appeal will be considered withdrawn only to the extent of the eligible period (1st July 2017 to 31st March 2020).

1. CIRCULAR NO. 248/05/2025 – GST, VARIOUS ISSUES RELATED TO AVAILMENT OF BENEFIT OF SECTION 128A OF THE CGST ACT, 2017, DATED 27-03-2025

1. FREQUENTLY ASKED QUESTIONS ON “RESTAURANT SERVICE” SUPLLIED AT “ SPECIFIED PREMISES”, DATED 28-03-2025

3. INSTRUCTION NO. 3.2025 – GST, INSTRUCTIONS FOR PROCESSING APPLICATIONS FOR GST REGISTRATION, , DATED 17-04-2025

1. PRESS RELEASE, GOVERNMENT IS NOT CONSIDERING LEVYING GOODS AND SERVICES TAX (GST) ON UPI TRANSACTIONS OVER INR 2000, DATED 18-04-2025

• No GST is being proposed on UPI transactions above INR 2,000; claims are false and baseless.
• GST is charged only on payment service charges like MDR (Merchant Discount Rate), not on UPI transactions.
• Since January 2020, MDR has been removed for Person-to-Merchant (P2M) UPI transactions by CBDT.
• As no MDR is charged on UPI P2M payments, no GST applies on such transactions.
• Government promotes UPI growth through an Incentive Scheme supporting low-value P2M transactions:
• FY 2021-22: INR 1,389 crore
• FY 2022-23: INR 2,210 crore
• FY 2023-24: INR 3,631 crore
• India leads in digital payments: 49% of global real-time transactions (as per ACI Worldwide Report 2024).
• UPI transaction value has grown massively:
• From INR 21.3 lakh crore (FY 2019-20) ➔ to INR 260.56 lakh crore (FY 2024-25).
• P2M transactions alone reached INR 59.3 lakh crore.

1. S.R. 256(E)- GST APPELLATE TRIBUNAL RULES, 2025, DATED 24-05-2025

1. STRICTER COMPLIANCE FOR DELAYED PAYMENTS TO MSMEEffective April 1, 2025, companies delaying payments to Micro and Small Enterprises (MSEs) beyond 45 days will face.

• Mandatory MCA Filings: Companies must file a half-yearly return (Form MSME-1) detailing outstanding dues exceeding 45 days.
• Interest Penalties: Compound interest at three times the RBI bank rate (approximately 18%) will be levied on delayed payments.

• Tax Disallowance: Interest paid on delayed payments will not be allowed as a business expense under Section 43B(h) of the Income Tax Act.

Applicability:

• Applies to companies procuring goods or services from MSEs registered under Udyam Registration.

• Does not apply to medium enterprises.

A. SECOND AMENDMENT TO CIRP REGULATIONS

On April 3, 2025, the IBBI introduced the Second Amendment to the Insolvency Resolution Process for Corporate Persons (CIRP) Regulations, 2016. The key change involves the revision of Form H (Compliance Certificate), requiring resolution professionals to provide more detailed disclosures. This includes information on the successful resolution applicant, plan implementation strategies, and income tax loss details, aiming to enhance transparency in the resolution process.

B. FOCUS ON REAL ESTATE IN CIRP

In amendments effective from February 3, 2025, the IBBI addressed challenges in real estate insolvency cases. Notable provisions include:

• Allowing resolution professionals to hand over possession of properties to homebuyers during the resolution process.
• Permitting land authorities to participate in the Committee of Creditors (CoC) meetings.
• Mandating resolution professionals to prepare a report on real estate development rights within 60 days to aid informed decision-making.

FEMA

A. CAPPING OF PENALTIES FOR FEMA VIOLATIONS

The RBI has amended its compounding framework under FEMA, introducing a cap of ₹2 lakh per contravention for specific regulatory violations. This move aims to simplify compliance and encourage voluntary disclosures.

Key Highlights:

• Applicable Violations: Includes delays in repatriation of export proceeds, non-repatriation of Liberalised Remittance Scheme (LRS) proceeds within 180 days, and issuance of high-value shares as gifts without RBI approval.
• Discretionary Powers: Compounding authorities have the discretion to impose reduced penalties based on the nature of the contravention and public interest considerations.
• Legal Framework: Guided by Section 15 of FEMA, 1999, allowing the RBI to compound contraventions upon application by the violator.

A. ENHANCED DISCLOSURES BY FOREIGN PORTFOLIO INVESTORS (FPIs)

On April 9, 2025, SEBI amended its circular mandating additional disclosures by FPIs that meet certain objective criteria. This amendment aims to bolster transparency and regulatory oversight of foreign investments in Indian markets.

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 30.04.2025.