MCA Updates
Companies (Indian Accounting Standards) Second Amendment Rules, 2025
The Ministry of Corporate Affairs (MCA), through notification G.S.R. 549(E) dated 13th August 2025, introduced the Companies (Indian Accounting Standards) Second Amendment Rules, 2025, aimed at updating several Indian Accounting Standards (Ind AS) to align them more closely with international norms and improve the clarity of financial reporting.
Key Highlights:
- Ind AS 1 (Presentation of Financial Statements):
- Now includes explicit guidance on when liabilities should be classified as current or non-current.
- Provides clarity around covenants and when a company may defer settlement of liabilities
- Ind AS 7 & Ind AS 107 (Cash Flow Statements & Financial Instruments):
- Introduce new disclosure requirements for supplier finance arrangements to improve transparency of their impact on liabilities and cash flows.
- Ind AS 12 (Income Taxes):
- Adds a new exception for Pillar Two income taxes (under OECD’s global tax rules), allowing entities to forgo recognizing or disclosing deferred tax assets and liabilities related to these taxes.
- Other Standards (Ind AS 101, 108, 109, 115, 10, 28, 32):
- Minor technical amendments, including corrections in paragraph references, transitional provisions, and consistency fixes.
These amendments are retrospectively applicable for financial years beginning on or after 1st April 2025.
Additionally, Ind AS 10 replaces the term “provision” with “covenant” for consistency, effective from April 1, 2026. Minor changes in Ind AS 28 and 32 ensure alignment with their international counterparts, particularly around treasury shares and IFRS 17 references. Overall, these amendments enhance transparency, regulatory compliance, and the comparability of financial statements, strengthening the financial reporting framework in India.
Click here to access the rules
Companies (Incorporation) Second Amendment Rules, 2025
The Ministry of Corporate Affairs, through G.S.R. 579(E), has notified the Companies (Incorporation) Second Amendment Rules, 2025, under various provisions of the Companies Act, 2013. These rules will come into effect on 15th September 2025 and primarily amend the Companies (Incorporation) Rules, 2014, by substituting the existing Form No. RD-1 with a revised version. Form RD-1 is used for applications made to the Regional Director for matters such as shifting a company’s registered office, extension of the financial year, or condonation of delays. The updated form aims to streamline such applications and ensure better compliance with procedural requirements.
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Income Tax Updates
Government of India notifies Income Tax Act, 2025
The Government of India notifies the Income-tax Act, 2025 vide publication in the Official Gazette.
Grant of tax exemption by CBDT under section 10(46) of the Income-tax Act, 1961 (“Act”) to specified entities.
The CBDT has notified the following entities for tax exemption under section 10(46) of the Act:
Credit Guarantee Fund Trust for Animal Husbandry and Dairying. The notification applies retrospectively from the financial year 2024-25 (AY 2025-26) and for assessment years up to 2029-30. Animal Husbandry
Karnataka State Building & Other Construction Workers’ Welfare Board. The notification is valid for assessment years 2026-27 to 2030-31
Kanpur Development Authority (KDA). The notification is effective from Assessment Year 2024–25
Uttarakhand Pollution Control Board. The notification is effective from Assessment Year 2025–26
West Bengal Municipal Development Fund Trust. The notification is retroactive and applies to financial years 2021–22 through 2025–26
All India Council for Technical Education. It applies retrospectively to Assessment Years 2024–25 to 2025–26 (covering Financial Years 2023–24 to 2024–25) and is valid prospectively for Assessment Years 2026–27 to 2028–29 (Financial Years 2025–26 to 2027–28)
Haryana State Pollution Control Board. The exemption is effective from the Financial Year 2024–25 and extends through the financial year 2028–29
Tamil Nadu Electricity Regulatory Commission. The exemption is effective from the Financial Year 2022–23 (Assessment Year 2023–24).
IIT Madras Research Park for Scientific Research Tax Benefits (AY 2026-27 to AY 2030-31)
CBDT has approved IIT Madras Research Park for scientific research under section 35(1)(iia) of the Income Tax Act. This approval is valid from April 1, 2025, to March 31, 2030, covering assessment years 2026-27 to 2030-31, enabling tax benefits for scientific research expenditure during this period.
Amendment to Form 10CCF (Appendix II) Under Rule 80LA
The CBDT, through the Income-tax (Twenty-Third Amendment) Rules, 2025—effective from August 20, 2025—has amended Form 10CCF (Appendix II) under Rule 80LA to clarify the definition of “gross income” for units classified as IFSC Insurance Offices. The amendment specifies that in the case of such units undertaking insurance business, “gross income” shall mean profits and gains calculated as per the provisions of Section 44 and the First Schedule of the Income-tax Act. Furthermore, where profits are computed under these provisions, the field for “gross eligible income” in item 8 of the form may be reported as Nil.
CBDT amends Rule 21AK of Income Tax Rules, 1962 (“Rules”)
The CBDT vide notification 126/2025 dated 28 July 2025 has made the following amendments to Rule 21AK:
- In the opening portion, after the words “offshore derivative instruments”, the words “or over-the-counter derivatives” shall be inserted
- In the sub-clause, after the words “by the International Financial Services Centres Authority”, the words “or any Foreign Portfolio Investor being a unit of an International Financial Services Centre” shall be inserted.
- In sub-rule (2), after the words “offshore banking unit”, the words “or the Foreign Portfolio Investor” shall be inserted.
- In the Explanation,
(i) in clause (v), for the words “a purchaser and a seller, and ” the words “a purchaser and a seller” shall be substituted;
(ii) in clause (vi), the word “and” shall be inserted at the end; and
(iii) after clause (vi), the following clause shall be inserted, namely:
(vii) “Foreign Portfolio Investor” means a person registered under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992).’.
CBDT introduces Rule 3C and 3D, specifying salary income, gross total income and determining perquisites u/s 17(2)
The CBDT vide notification No 133/2025 dated Aug 18, 2025 inserted Rules 3C and 3D, specifying the salary and gross total income for the purpose of “Perquisites” under section 17(2) of the Act. Rule 3C provides that the prescribed income under the head “Salaries,” for the purpose of Section 17(2)(iii)(c), shall be four lakh rupees; Rule 3D provides that the prescribed gross total income, for the purpose of Section 17(2)(iv), shall be eight lakh rupees.
GST Updates
System Update on Refunds under ASSORD Category
Earlier, taxpayers could claim refunds under “On account of Assessment/Enforcement/Appeal/Revision/Any Other Order (ASSORD)” only if the Demand ID showed a cumulative negative balance with status “Refund Due.” This restricted refunds where minor heads had negative balances but the overall demand was zero or positive.
Updates Implemented:
- Refunds can now be claimed irrespective of the Demand ID status.
- A refund is allowed even if the cumulative balance is zero/positive, as long as any minor head shows a negative balance.
- Only negative balances will auto-populate in Form RFD-01 (no refunds allowed for positive amounts).
- The system will suggest the most recent demand order (OIO, rectification, appeal order, etc.).
- Tooltips added for clarity while entering Order No. and Demand ID.
Advisory on extension of GSTR-3B due date in a few districts of Maharashtra State
Due to heavy rains and resultant natural calamity, the due date for filing GSTR-3B for July 2025 has been extended from 20th August 2025 to 27th August 2025 for taxpayers in the districts of Mumbai (City), Mumbai (Suburban), Thane, Raigad, and Palghar in Maharashtra.
Click here for the notification
56th GST Council Meeting
The GST Council has scheduled its 56th meeting for 3rd and 4th September 2025 in New Delhi, as announced on 23rd August 2025. This session is expected to focus significantly on GST rate rationalization measures.
Next-Gen GST Reforms: Simpler Taxes, Easier Compliance
Prime Minister Narendra Modi announced next-generation GST reforms introducing a simplified two-slab system of 5% and 18%, removing the 12% and 28% slabs, and adding a 40% tax slab for sin and luxury goods. These reforms fix inverted duty structures and classification issues while making essentials, medicines, and insurance cheaper. The changes also include pre-filled returns and faster automated refunds to ease compliance, benefiting consumers, MSMEs and boosting economic growth from September 22, 2025.
