RBI Updates
Opening of SNRR Account by Person Resident Outside India Regulatory Updates
A person resident outside India having a business interest in India may open and maintain a Special Non-Resident Rupee Account (SNRR account) with an authorized dealer in India or have a branch outside India for the purpose of putting through permissible current and capital account transactions. A unit in an International Financial Services Centre (IFSC) may open an SNRR account with an authorized dealer in India (outside IFSC) for its business-related transactions outside IFSC. The tenure of the SNRR account shall be concurrent to the tenure of the contract/period of operation / the business of the account holder.
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Opening of Foreign Currency Account by a Resident exporter
A person resident in India, being an exporter, may open and maintain a Foreign Currency Account with a bank outside India, to receive full export payments and advance remittances for the export. These funds may be utilized by the exporter for paying for its imports into India or repatriated into India by the end of the next month from the date of receipt of the funds after adjusting for forward commitments, provided that the realization and repatriation requirements specified by the RBI are also met. Regulatory Updates
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Streamlining the modes of payment and remittance of sale proceeds Regulatory Updates
RBI has notified a series of amendments to Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations to streamline the methods of payment and remittance of sale proceeds. Further, a start-up company issuing convertible notes to non-residents shall receive the consideration by inward remittance through banking channels or by debit to any repatriable foreign currency or Rupee account of the person concerned, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016. Repayment or sale proceeds may be remitted outside India or credited to any repatriable foreign currency or Rupee account of the person concerned, maintained in accordance with the Foreign Exchange Management (Deposit) Regulations, 2016.
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SEBI Updates
Settlement of Account of Clients who have not traded in the last 30 days
The account of clients who have not done any transaction in the last 30 days are required to be settled by the Trading Member (TM) within the next three working days. It has been decided that the funds of such clients who have not traded in the last 30 calendar days shall be settled on the upcoming settlement dates of the monthly running account settlement cycle as notified by Exchanges in the annual calendar issued by them from time to time. Regulatory Updates
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Revision in Timelines for Credit Rating Agencies (CRAs) – Measures for Ease of Doing Business for Credit Rating Agencies (CRAs)
To promote Ease of Doing Business and bring uniformity in dealing with rating reviews and publication of Press Release by Credit Rating Agencies, SEBI has decided to modify certain timelines from “days” to “working days”. A list of the revised timelines has been provided in the circular. Regulatory Updates
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Procedure for seeking waiver or reduction of interest in respect of recovery proceedings initiated for failure to pay penalty
SEBI has delegated the power to waive or reduce the interest levied in respect of recovery proceedings initiated for failure to pay penalty, to the Competent Authority identified in the circular. However, this waiver or reduction will not apply in certain cases. Additionally, the circular also lays down the procedure for applying for a waiver or reduction of interest.
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Revision and Revamping of Nomination Facilities in the Indian Securities Market
To revise and revamp the norms for nominations in demat accounts and mutual fund (MF) folios and to prevent the generation of unclaimed assets in the Indian securities market, SEBI has issued a circular addressing various aspects of nomination, grouped under two sections – Section A and B. Section A reiterates the existing norms to ensure a uniform approach across Indian Securities Market, while Section B outlines the revamped norms.
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Disclosure of Risk adjusted Return – Information Ratio (IR) for Mutual Fund (MF) Schemes
Given the importance of performance volatility in determining the suitability of MF schemes, Information Ratio (IR) is an established financial ratio to measure the Risk Adjusted Return (RAR) of any scheme portfolio. To enhance transparency in disclosures made by Asset Management Companies and aid better decision making by investors, IR as a financial metric to measure the RAR of a scheme portfolio shall be disclosed. The circular provides the methodology for calculating IR for each category of mutual fund scheme, along with the required format for its disclosure. The provisions of this circular will come into effect three months from the date of its issuance i.e., January 17, 2025.
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Timeline for Review of ESG Rating pursuant to the occurrence of ‘Material Events’
Considering the operational challenges in reviewing ESG ratings for a large pool of listed companies, SEBI has decided to provide relaxation in the timeline for the review of ESG ratings pursuant to the publication of Business Responsibility and Sustainability Reporting. Therefore, a review of the ESG rating pursuant to publication of the BRSR by the rated entity shall be carried out within 45 days of the publication of the BRSR. Regulatory Updates
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Development of Web-based portal: iSPOT (Integrated SEBI Portal for Technical glitches) for reporting of technical glitches
To streamline the reporting process of technical glitches across Market Infrastructure Institutions (MIIs) and create a centralized repository of such glitches, SEBI has developed a web-based portal called the Integrated SEBI Portal for Technical Glitches (iSPOT), for submission of preliminary and final Root Cause Analysis (RCA) reports of technical glitches by the MIIs. The provisions of this Circular shall come into force from February 03, 2025.
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Format of Due Diligence Certificate to be given by the Debenture Trustees
SEBI specifies the formats for the due diligence certificate that an Issuer must obtain from the Debenture Trustee when filing the draft offer document and when submitting the listing application to the Stock Exchange. Regulatory Updates
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Clarifications on provisions related to association of persons regulated by the Board, Market Infrastructure Institutions, and their agents with persons engaged in prohibited activities
Persons regulated by SEBI, Market Infrastructure Institutions and their agents shall not have any direct or indirect association with another person involved in specified prohibited activities. However, “another person” shall not include a person who is engaged solely in investor education, provided that such a person does not, directly or indirectly, indulge in any of the prohibited activities. Clarifications on these provisions are provided in the form of frequently asked questions in this Circular.
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Income Tax Updates
Income-Tax (First Amendment) Rules, 2025 – Insertion of New Rule 6GB: Special provisions for computing profits and gains of business of operation of cruise ships in case of non-residents
The Central Board of Direct Taxes (CBDT) has introduced Rule 6GB, outlining conditions for non-resident entities operating cruise ships in India. To qualify for the presumptive taxation regime under Section 44BBC, such entities must operate passenger ships with a capacity exceeding 200 passengers or a length of at least 75 meters, equipped with appropriate dining and cabin facilities. These ships should conduct scheduled voyages touching at least two Indian seaports or the same port twice, primarily for passenger leisure and recreation, not cargo transport. Operations must adhere to guidelines issued by the Ministry of Tourism or the Ministry of Shipping. Regulatory Updates
Income-Tax (Second Amendment) Rules, 2025 – Amendment in Rule 21AIA – Insertion of Rules 2DAA and 21ACA
The CBDT has amended the Income-tax Rules to include Rule 2DAA, specifying conditions for Venture Capital Funds (VCFs), and Rule 21ACA, detailing permissible activities for Finance Companies located in International Financial Services Centres (IFSCs) under Section 94B. These finance companies are now authorized to engage in activities such as lending, securitization, financial leasing, and global treasury functions, including hedging and intra-group financing. Interest payments made by these companies, when borrowing from non-resident entities, must be in foreign currency. Regulatory Updates
Guidance for Application of the Principal Purpose Test under India’s Double Taxation Avoidance Agreement
The CBDT has issued Circular No. 1/2025, providing guidance on applying the Principal Purpose Test (PPT) to prevent treaty abuse under India’s tax treaties. The circular clarifies that the PPT applies prospectively from the date of enforcement of the relevant treaty or amendment. It emphasizes a fact-specific examination to determine if one of the principal purposes of a transaction is to obtain tax benefits, referencing the BEPS Action Plan 6 Final Report and the UN Model Tax Convention for guidance. Notably, the PPT cannot be used to deny grandfathering benefits for shares acquired before April 1, 2017, under treaties with Cyprus, Mauritius, and Singapore.
CBDT notifies Amendments in Income- Tax Rules, 1962 to prescribe conditions for applicability of Presumptive Taxation regime for Non-Resident Cruise Ship Operators
The CBDT has amended the Income-tax Rules, 1962, prescribing conditions for non-resident cruise ship operators to avail the presumptive taxation regime introduced in the Finance (No. 2) Act, 2024. To qualify, operators must run passenger ships with a capacity of more than 200 passengers or a length of at least 75 meters, equipped with appropriate dining and cabin facilities. These ships should operate scheduled voyages touching at least two Indian seaports or the same port twice, primarily for passenger leisure and recreation, not cargo transport. Operations must comply with guidelines from the Ministry of Tourism or the Ministry of Shipping.
Section 197A, read with Section 194A of the Income-Tax Act,1961- No Deduction in certain cases
Section 197A allows certain individuals to receive specific incomes without tax deduction at source (TDS) by submitting a declaration in Form 15G or 15H, affirming that their total income is below the taxable limit. Section 194A mandates TDS on interest payments other than interest on securities. However, if an individual furnishes the required declaration under Section 197A, no TDS is deducted on such interest payments. This provision aims to prevent undue hardship to individuals, especially senior citizens, whose total income is below the taxable threshold. Regulatory Updates
CBDT clarifies on applicability of E-appeal schemes,2023 to orders under section 201 of the Act
CBDT, vide Office Order June 16, 2023 notified E-appeals scheme, 2023. The scheme excludes appeals arising from: (i) assessment or penalty orders with over Rs.10 Lakh of the disputed demand, (ii) faceless assessments or faceless penalty, (iii) post-search assessments, (iv) international tax cases, etc.; Apart from the exclusions, the Scheme covers all the appeals covered under Section 246 and/ or clauses (a), (b), (c), (ha), (hb) or (q) of Section 246A(1) Regulatory Updates
Now, vide order (F.No 225/17/2025-ITA-II) dated Jan 28, 2025, CBDT clarifies the orders under Section 201 made in pursuance of any action under Section 133A shall not be considered as assessment orders covered under the exceptions provided in the June 16, 2023 scheme. Accordingly, all appeals against such orders shall be decided by the Joint Commissioner (Appeals) under the E-Appeals Scheme, 2023
Income Tax Updates
Clarification on Input Tax Credit (ITC) for E-Commerce Operators
Circular No. 240/34/2024-GST, dated December 31, 2024 Regulatory Updates
Clarifies that e-commerce operators can avail ITC for services where tax liability is discharged under Section 9(5) of the CGST Act, 2017.
Clarification on ITC for Ex-Works Contracts
Circular No. 241/35/2024-GST, dated December 31, 2024 Regulatory Updates
Explains ITC eligibility for goods delivered at the supplier’s premises under ex-works contracts, addressing compliance under Section 16(2)(b) of the CGST Act, 2017.
Clarification on Place of Supply for Online Services to Unregistered Recipients
Circular No. 242/36/2024-GST, dated December 31, 2024 Regulatory Updates
Provides guidance on determining the place of supply for online services rendered to unregistered recipients under GST, ensuring correct tax treatment.
Clarification on GST Treatment of Vouchers
Circular No. 243/37/2024-GST, dated December 31, 2024
Defines GST implications for vouchers, distinguishing between single-purpose and multi-purpose vouchers, and specifying their taxability.
Amendment in CGST Rate Schedule for Services
Notification No. 5/2025-Central Tax, dated January 16, 2025 Regulatory Updates
Modifies GST rates for specific services under Sections 9, 11, 15, and 16 of the CGST Act, revising tax applicability on key service categories.
Appointment of Officers for Excise and Service Tax Appeals
Notification No. 1/2025-Central Excise (N.T.), dated January 10, 2025 Regulatory Updates
Designates officers in specified jurisdictions to adjudicate excise and service tax appeals under Section 174 of the CGST Act, 2017.
