COMPLIANCE UPDATES – SEPTEMBER 2025
Government policies
🟩 Government Notifies Income Tax Act | The government has formally notified the Income-tax Act, which will come into effect from April 1, 2026, replacing the six-decade-old Income-tax Act, 1961. The new law, passed by Parliament last week and assented to by President Droupadi Murmu on August 21, was published in the Gazette by the Ministry of Law and Justice. The Act aims to consolidate and modernise India’s direct tax framework, with the Income Tax Department describing it as a simpler, transparent and compliance-friendly regime. (Financial Express)
🟨 Government Clears INR 1,500 Cr Recycling Scheme for Critical Minerals | The Union Cabinet has approved a INR 1,500 crore incentive scheme under the National Critical Mineral Mission (NCMM) to build recycling capacity for critical minerals from secondary sources. The scheme will support the recovery of minerals from e-waste, lithium-ion battery scrap, and end-of-life vehicle components like catalytic converters. One-third of the outlay is earmarked for startups and smaller recyclers, while larger players will also benefit. The initiative is expected to create 70,000 jobs and strengthen India’s supply chain resilience in critical minerals. (Business Line)
Goods and services tax
🟥 GSTAT Hearings to Begin Soon as Govt Appoints Key Members | The Centre has appointed judicial and technical members to the Goods and Services Tax Appellate Tribunal (GSTAT), paving the way for the long-delayed body to become operational. Justice (Retired) Sanjaya Kumar Mishra will head the Principal Bench in New Delhi, joined by retired judge Mayank Kumar Jain and senior retired officers A Venu Prasad and Anil Kumar Gupta as technical members. While the government has already notified 31 state benches and appointed several judicial members, states must still nominate their technical members to fully activate the tribunal. Once functional, GSTAT will expedite tax dispute resolution, reducing the current burden on High Courts and the Supreme Court. Industry groups have welcomed the move, calling it critical for freeing blocked capital and providing certainty in GST matters. (Economic Times)
🟨 CAG Flags Gaps in E-Way Bill Monitoring | The Comptroller and Auditor General (CAG) has identified serious mismatches between e-way bills and tax payments, highlighting revenue risks under the GST regime. In a performance audit covering April 2018–March 2022, CAG flagged 470 cases worth INR 576.9 crore where taxpayers generated high-value EWBs but failed to discharge tax liabilities, filed nil returns, or continued generating EWBs despite registration cancellations. The audit also found turnover suppression, including 18 taxpayers who issued 3,137 EWBs for supplies worth INR 168.2 crore but did not pay INR 81.1 crore in taxes. CAG urged authorities to flag suspicious EWB activity, alert composition taxpayers crossing limits, and strengthen preventive functions, citing gaps such as inadequate verification, manpower, and analytical use of EWB data. (Business Standard)
Income tax
🟩 New IT Rules and Simplified Forms by December-End | The Income Tax Department is set to notify new rules under the Income-tax Act, by December this year, ahead of the law’s implementation on April 1, 2026. According to CBDT member (Legislation) RN Parbat, the department is reworking forms such as ITRs and TDS returns to make them simpler and more user-friendly, removing redundancies and streamlining language. A ‘Rules and Forms’ committee has already conducted consultations and prepared drafts, which will be vetted by the CBDT, the finance ministry, and the law department before being tabled in Parliament. The CBDT also plans to release FAQs, SoPs, and guidance notes to aid taxpayers and build officer capacity for smooth enforcement of the new Act. (Economic Times)
🟨 IT Digital Data Handling to Follow Data Protection Act | The Income-tax Act, expands the definition of computer system to strengthen action against tax evaders, but officials will be required to follow protocols laid down under the Digital Personal Data Protection Act while handling digital data. A CBDT member confirmed that Standard Operating Procedures (SoPs) will guide officers on privacy safeguards during searches and seizures. Finance Minister Nirmala Sitharaman had earlier clarified that the new law addresses cases where taxpayers deny access to devices by exploiting gaps in definitions. While concerns about privacy breaches were raised, the CBDT reiterated its trust-first approach, noting that only a small fraction of returns are scrutinised. The department also plans to roll out standardised and simplified smart forms for TDS, TCS, and advance tax transactions. (Economic Times)
🟨 CBDT Extends IT Exemptions for SWFs, Pension Funds Till 2030 | The Central Board of Direct Taxes has extended income tax exemptions for sovereign wealth funds (SWFs) and pension funds investing in India’s infrastructure sector until March 31, 2030. The relief, available under Section 10(23FE) of the Income-tax Act, exempts these funds from tax on dividends, interest, and long-term capital gains from eligible investments, subject to conditions. Introduced in 2020 to attract stable global capital, the scheme has already boosted inflows, with direct investments by SWFs and pension funds nearly doubling to USD 6.7 billion in 2022. Around 35 global funds, including Singapore’s GIC, Temasek, and Norway’s Government Pension Fund, are currently notified beneficiaries. (Economic Times)
Corporate and allied laws
🟥 SEBI Reintroduces Intraday Limits on Index Options | SEBI has announced new rules to curb oversized exposures in India’s derivatives market by reintroducing intraday position limits on index options, effective October 1. As per the regulator’s circular, net intraday positions per entity will be capped at INR 5,000 crore on a futures-equivalent basis, while gross intraday positions will be capped at INR 10,000 crore, in line with existing end-of-day limits. The move, aimed at strengthening risk management and ensuring orderly trading, comes amid concerns over speculative build-up in one of the world’s busiest derivatives markets. (Moneycontrol)
Finance and banking
🟩 Banks Tap Alternate Data to Lend to First-Time Borrowers | Banks are increasingly relying on alternate data sources to extend credit to new-to-credit (NTC) customers who lack established credit bureau scores, following a push from the government and RBI. According to Bank of India MD & CEO Rajneesh Karnatak, lenders are using indicators such as utility bill payments, telecom and mobile bills, UPI transactions, and e-commerce activity to assess creditworthiness. The move is aimed at expanding financial inclusion and boosting credit access for first-time borrowers. (Business Line)
🟩 INR 2,000 Notes Worth INR 5,956 Crore Still in Circulation | The Reserve Bank of India (RBI) has reported that INR 2,000 denomination notes worth INR 5,956 crore remain in circulation as of August 31, more than two years after their withdrawal. The total value has sharply declined from INR 3.56 lakh crore on May 19, 2023, when the withdrawal was announced. While the notes remain legal tender, the RBI said the bulk has already been returned to the banking system. (Business Standard)
Customs and foreign trade
🟥 Japan Commits JPY 10 Trillion Investment in India Over Decade | Prime Minister Narendra Modi announced in Tokyo that India and Japan have set a target of JPY 10 trillion (about USD 68 billion) in Japanese investments in India over the next 10 years. The two nations unveiled a roadmap to deepen cooperation in critical minerals, defence, and technology as part of their special strategic and global partnership. The announcement came after summit talks between Modi and Japanese Prime Minister Shigeru Ishiba, against the backdrop of global trade uncertainties driven by U.S. tariff policies. (Business Standard)
Accounting and management
In Focus: Joint Stock Company
A Joint Stock Company (JSC) is a business organisation where the ownership is divided into shares, and the liability of shareholders is limited to the value of the shares they hold. It is a legal entity separate from its owners, meaning it can own property, enter into contracts, sue or be sued in its own name. This structure is widely adopted because it combines the benefits of limited liability with the ability to raise large amounts of capital through the sale of shares.
One of the main features of a Joint Stock Company is its separate legal existence. Unlike partnerships or sole proprietorships, a JSC continues to exist even if its shareholders change or pass away. For instance, multinational corporations such as Microsoft Corporation or Reliance Industries Limited continue to operate regardless of changes in their shareholder base. This provides stability and continuity to the business.
Another key characteristic is the limited liability of shareholders. This means that if the company faces financial losses or debts, shareholders are only liable to the extent of their shareholding. For example, if a shareholder owns shares worth USD 5,000 in a company that goes bankrupt, their maximum loss will be USD 5,000, and their personal assets remain protected. This feature encourages investment since the risk exposure is limited.
In terms of management, ownership and control are separated in a Joint Stock Company. Shareholders are the owners, but the company is managed by a Board of Directors elected by them.
Payroll and personal finance
🟨 Cabinet Extends PM SVANidhi Scheme Till 2030 | The Union Cabinet has approved restructuring and extension of the PM Street Vendors’ AtmaNirbhar Nidhi (PM SVANidhi) scheme, pushing the lending window from December 31, 2024, to March 31, 2030. With an outlay of INR 7,332 crore, the restructured scheme will benefit 1.15 crore street vendors, including 50 lakh new entrants. Loan limits have been enhanced, with the first tranche raised to INR 15,000 and the second to INR 25,000, while the third remains at ₹50,000. Beneficiaries repaying their second loan will be eligible for a UPI-linked RuPay Credit Card to access instant credit, alongside digital cashback incentives of up to INR 1,600 for retail and wholesale transactions. The scheme’s coverage will also expand beyond statutory towns to census and peri-urban areas. (Business Standard)