Quick regulatory updates on Direct Tax, GST, and FEMA/FCRA — as soon as they are issued.
CBDT has extended the due date for issuance of TDS certificates under Section 203 of the Income-tax Act, 1961 read with Rule 31 of the Income-tax Rules, 1962, for the quarter ending 31 December 2025. The new deadline is 31 March 2026. The extension has been granted under Section 119 of the Act in view of genuine hardship caused by technical glitches on the income tax e-filing portal. TDS certificates issued within the extended period will be treated as having been issued within the prescribed time — no penal consequences will apply. Deductors should ensure Form 16A is issued to deductees before the close of business on 31 March 2026.
The Government has notified a new framework for Registered Valuers under Section 514 of the Income Tax Act, 2025 read with Rule 247 of the Income-tax Rules, 2026. The framework introduces a structured classification of valuers by asset category — immovable property, agricultural land, securities and business assets, plant and machinery, jewellery, works of art, and actuarial interests — each with specific qualification and experience requirements. Key changes: (1) Separate registration under Income-tax Rules even for IBBI-registered valuers; (2) Mandatory competency exam; (3) Standardised valuation report in Form 170; (4) Periodic regulatory review. Significant for capital gains, transfer pricing, M&A and restructuring transactions.
CBDT has issued an order under Section 119 of the Income-tax Act, 1961 (F.No.225/53/2024-IT A-II, dated 18 March 2026) directing all Income Tax offices across India to remain open on 31 March 2026, which is a closed holiday on account of Mahavir Jayanti. The order ensures completion of pending departmental work before the close of Financial Year 2025-26 — the last year governed by the Income Tax Act, 1961. Taxpayers with pending year-end submissions, advance tax payments, or last-minute tax-saving investments can visit their jurisdictional Income Tax office on 31 March 2026.
The Income Tax Act, 2025 consolidates the old Act into 536 sections across 23 chapters. All assessments, filings, and compliance from Tax Year 2026-27 onwards will be governed by the new Act. The old Act, 1961 continues to apply for matters relating to AY 2025-26 and earlier.
Budget 2026 revised the new tax regime slabs. Income up to ₹12 lakh is effectively tax-free (after rebate). Standard deduction remains ₹75,000. Slabs above ₹12L: ₹12L–16L @ 15%, ₹16L–20L @ 20%, above ₹20L @ 30%.
The Income Tax Act 2025 consolidates all TDS provisions into a single Section 393. New form numbers from 1 April 2026: Form 16 → Form 130, Form 24Q → Form 138, Form 26Q → Form 140, Form 15G/15H → Form 121.
Budget 2026 extends the deadline for filing revised or belated ITR to 31 March of the Assessment Year. For AY 2026-27, the last date for a revised ITR is 31 March 2027.
NRIs with Indian income above ₹15 lakh who stay in India for 120+ days and have been present for 365+ days in the preceding 4 years will be classified as RNOR. Indian citizens in zero-tax countries (UAE, Saudi Arabia, Bahrain) with Indian income above ₹15 lakh are deemed residents even without visiting India.
ESOP perquisite continues to be taxed at exercise under Section 16 of the IT Act, 2025. Employees of eligible start-ups under Section 80-IAC continue to benefit from TDS deferral under Section 192(1C) for up to 48 months from allotment.
Budget 2026 reduces TCS on LRS remittances: education and medical purposes reduced from 5% to 2%; overseas tour packages to flat 2%; threshold raised from ₹7 lakh to ₹10 lakh per year. TCS fully removed for education remittances funded by institutional loans.
Exporters supplying goods or services without payment of GST must file a fresh Letter of Undertaking (LUT) for FY 2026-27 on the GST portal by 31 March 2026. Without a valid LUT, exports in April 2026 will require GST payment upfront causing cash flow blockage.
The GST portal has made Table 3 (outward liability) of GSTR-3B non-editable — auto-populated from GSTR-1. ITC hard-locking is expected next, meaning Table 4 ITC values will also be locked based on GSTR-2B. Taxpayers must ensure GSTR-1 and purchase registers are reconciled before the 11th of each month.
Finance Bill 2026 removes the requirement that post-sale discounts must be pre-agreed. Discounts can now be given through a credit note under Section 34, provided the recipient reverses the proportionate ITC. This ends years of disputes for distributor-retailer models and volume rebate schemes.
Section 54(6) of the CGST Act is amended to extend provisional refund facility (90% of claim) to refunds arising from inverted duty structure — earlier available only for zero-rated supplies. The ₹1,000 minimum threshold for export refunds is also removed.
Finance Bill 2026 omits Section 13(8)(b) of the IGST Act. Indian IT/BPO/consulting firms providing services to foreign clients can now treat these as exports and claim refunds.
Annual GST returns GSTR-9 and GSTR-9C for FY 2024-25 are due by 31 December 2025. Taxpayers with aggregate turnover above ₹5 crore must file GSTR-9C with self-certification.
DPIIT issued Press Note 3 of 2026 amending the Consolidated FDI Policy. Investments from entities in countries sharing a land border with India (China, Pakistan, Bangladesh, Nepal, Bhutan, Myanmar) continue to require Government Route approval. Downstream investment reporting and beneficial ownership disclosure requirements have been tightened.
NGOs holding FCRA registration certificates expiring in June 2026 must apply for renewal by March 2026 to ensure continuity of foreign contribution receipt. Applications must be filed on the MHA FCRA online portal at fcraonline.nic.in.
The Finance Act, 2026 (received Presidential assent on 30 March 2026) has omitted clause (b) of Section 13(8) of the IGST Act, 2017. This is one of the most significant GST amendments in recent years, resolving nearly a decade of litigation and hardship for Indian service exporters. What changed: Prior to this amendment, Section 13(8)(b) of the IGST Act deemed the place of supply for intermediary services to be the location of the supplier. This meant that an Indian agency, BPO, digital marketing firm, or consultant providing services to a foreign client was treated as supplying services within India — not as an export. Despite receiving payment in foreign currency, these businesses were required to pay IGST at 18%, with no access to zero-rating benefits or refunds. Approximately ₹3,300 crore in disputed tax was pending before various forums on this issue. Effect of omission: With Section 13(8)(b) deleted, the place of supply for intermediary services is now determined under the default rule in Section 13(2) of the IGST Act — the location of the recipient of services. Where the recipient is located outside India, the place of supply is outside India. The transaction qualifies as an export of services under Section 2(6) of the IGST Act. It becomes a zero-rated supply under Section 16, enabling suppliers to either claim a refund of accumulated Input Tax Credit or supply under a Letter of Undertaking (LUT) without payment of IGST. Who benefits: Indian digital marketing agencies, BPO firms, IT support companies, freight forwarding agents, back-office outsourcing units, sub-contracting consultants, and any other service provider previously classified as an intermediary when serving foreign clients. Indian exporters of intermediary services can now register an LUT, raise invoices to foreign clients without GST, and claim full ITC refunds on inputs. Reverse charge impact: Businesses in India that import intermediary services from foreign providers should note that the amendment shifts these transactions to be taxable under Reverse Charge Mechanism (RCM). However, GST paid under RCM will generally be available as Input Tax Credit, making such transactions tax-neutral for businesses eligible for full ITC. Effective date: The Finance Act, 2026 received Presidential assent on 30 March 2026. The operative date for the intermediary services amendment is to be separately notified by the Central Government — businesses should monitor CBIC notifications for the specific effective date before adjusting invoicing practices.
DPIIT has issued a landmark overhaul of India's startup recognition framework vide Gazette Notification G.S.R. 108(E) dated 4 February 2026, superseding the 2019 notification. The revised framework introduces sweeping changes that directly impact Private Limited Companies seeking DPIIT recognition and the Section 80-IAC tax holiday. Key changes: Turnover limit doubled: The annual turnover ceiling for startup recognition has been increased from ₹100 crore to ₹200 crore. Growth-stage startups that were crossing the old threshold and losing recognition benefits can now continue to access all startup-linked benefits including Section 80-IAC tax holiday, patent rebates, self-certification, and GeM procurement access. Deep Tech Startup category introduced: For the first time, a separate formal category for Deep Tech Startups has been created. Entities in AI, biotechnology, quantum computing, space technology, robotics, and advanced materials with high R&D intensity and novel IP creation qualify. Deep Tech Startups receive a 20-year recognition window (vs 10 years for regular startups) and a ₹300 crore turnover ceiling. Angel Tax removed from framework: Section 56(2)(viib) — Angel Tax — was abolished from 1 April 2025 by the Finance Act, 2024. The 2026 DPIIT notification formalises this by removing all references to the angel tax exemption process. No separate angel tax exemption certificate is required going forward. Cooperative societies included: Multi-State Cooperative Societies and State/UT Cooperative Societies are now eligible for DPIIT recognition for the first time — allowing innovation-driven cooperatives in agriculture, rural industries, and community enterprises to access startup benefits. Fund utilisation restrictions tightened: Restrictions on prohibited investments (residential property, luxury assets, speculative instruments) now apply throughout the full recognition period rather than only for the first 7 years. IMB composition flexible: The Inter-Ministerial Board composition can now be amended with the approval of the DPIIT Secretary, improving flexibility in certification decisions. Section 80-IAC reminder: DPIIT recognition is the gateway to the Section 80-IAC income tax holiday — 100% exemption on profits for any 3 consecutive years out of the first 10 years. Only Private Limited Companies and LLPs are eligible for 80-IAC (not partnership firms or cooperatives). Apply to IMB immediately after DPIIT recognition — processing takes 3–9 months. Do not wait until the year you want to claim.
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