SEBI Updates Regulatory Updates
Faster Rights Issue with a flexibility of allotment to specific investor(s)
SEBI has introduced a new framework for the Rights Issue process through an amendment to the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. As per the new framework, Rights Issues should be completed within 23 working days from the date of the Board’s approval. It has also prescribed the revised timelines for completion of various activities in the Rights Issue process.
If the issuer is making a Rights Issue of convertible debt instruments requiring shareholder approval, the timelines will be adjusted accordingly. The subscription period for Rights Issues shall be a minimum of 7 days and a maximum of 30 days. These new provisions will come into force from April 7, 2025, and will apply to Rights Issues approved by boards after this date.
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Harnessing DigiLocker as a Digital Public Infrastructure for Reducing Unclaimed Assets in the Indian Securities Market
SEBI is planning to use DigiLocker and Knowledge Repository Agencies (KRAs) to manage unclaimed financial assets after an investor’s death. DigiLocker allows users to store documents and offers a nomination facility. The DigiLocker system will update the status of users upon their demise, either through the Registrar General and Census Commissioner’s death register or verified death information from KRAs.
A mechanism has been set up where DigiLocker automatically notifies the nominee via SMS and email upon the user’s death. This will help the nominee access financial information for asset transmission. SEBI directs AMCs, RTAs, and Depositories to register with DigiLocker to allow investors to fetch mutual fund and demat account statements. The circular will be effective from April 1, 2025
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Framework on Social Stock Exchange (“SSE”)
SEBI via Circular dated March 19, 2025 has revised the existing minimum application size for subscribing to Zero Coupon Zero Principal Instruments on the Social Stock Exchange from ₹10,000 to ₹1,000 based on recommendations from the Social Stock Exchange Advisory Committee and public feedback. The change aims to enhance investor participation and accessibility in the social finance ecosystem. The circular comes into effect immediately.
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Industry Standards on “Minimum information to be provided for review of the audit committee and shareholders for approval of a related party transaction
SEBI has extended the applicability of the Industry Standards on “Minimum information to be provided for review of the audit committee and shareholders for approval of a related party transaction” from April 1, 2025 to July 1, 2025, based on stakeholder feedback. The extension is aimed at allowing the Industry Standards Forum (comprising ASSOCHAM, CII, and FICCI) time to consider stakeholder feedback for further simplification and to release an updated version. Stock exchanges have been directed to notify listed entities of this change.
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Disclosure of holding of specified securities in dematerialized form
SEBI via Circular dated November 11, 2024, introduces amendments to improve transparency in the disclosure of shareholding pattern to investors in the securities market. Key changes include requiring disclosure of Non-Disposal Undertaking (NDU) details, encumbrances, and the total number of pledged shares. It also clarifies that ESOPs are part of the underlying outstanding convertible securities, introduces a new column for fully diluted shares, and mandates a footnote in Table II highlighting promoters with “NIL” shareholding. These changes will be applicable from the quarter ending June 30, 2025, and stock exchanges and depositories have been directed to update their systems and notify listed companies accordingly.
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Widening the scope of Unpublished Price Sensitive Information: SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2025
SEBI’s recent amendments to the Prohibition of Insider Trading Regulations, 2015, expand the definition of Unpublished Price Sensitive Information (UPSI) to include events such as fraud or defaults by the company, promoters, directors, KMPs, or subsidiaries, auditor resignations, arrests of key personnel, significant litigation outcomes, changes in credit ratings (excluding ESG), non-routine contract awards or terminations, proposed fundraising, and agreements impacting control. Insolvency-related actions, forensic audits for financial mismanagement, and regulatory or enforcement actions/orders against the company or its officials are also included. Furthermore, the amendments mandate that external UPSI must be recorded in a Structured Digital Database within two calendar days of receipt and the trading window can remain open for such external UPSI.
The amendment shall come into effect from 10 June 2025.
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SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2025
SEBI via SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2025, effective from March 25, 2025, have raised the compliance threshold for Regulations 16-27 to entities with listed non-convertible debt securities from ₹500 crore to ₹1000 crore. Once triggered, compliance must be ensured within six months, with disclosures made starting from the third quarter after the trigger. Additionally, entities listed on SME Exchanges with paid-up equity share capital exceeding Rs 10 crore or net worth over Rs 25 crore will need to comply with related party transaction provisions from April 1, 2025. The amendment also revises the directorship limit to include those from high-value debt listed entities, and sets transactions over ₹50 crore or 10% of turnover as material for SME-listed entities. A new corporate governance chapter for High Value Debt Listed Entities (HVDLEs) mandates board composition, directorship limits, committees, independent director roles, related party rules, secretarial audit, periodic governance filings, and BRSR ESG disclosures.
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Measures to facilitate ease of doing business with respect to the framework for assurance or assessment, ESG disclosures for the value chain, and the introduction of voluntary disclosure on green credits
SEBI, through its circular dated March 28, 2025, has introduced measures to ease ESG compliance for listed entities. Key changes include deferring mandatory ESG disclosures for value chain partners to FY 2025–26 and the requirement for assessment or assurance to FY 2026–27. The scope of reporting is now limited to top upstream and downstream partners individually accounting for 2% or more of purchases or sales, with overall disclosures capped at 75% of total transactions. Reporting prior-year data is optional for the first year. Additionally, a new leadership indicator under BRSR Principle 6 mandates disclosure of green credits generated or procured by the company and its top 10 value chain partners. The term “assurance” has been replaced with “assessment or assurance,” allowing flexibility in third-party evaluations. These changes aim to enhance the ease of doing business while promoting environmental responsibility.
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SEBI (Issue of Capital and Disclosure Requirements) (Amendment) Regulations, 2025
SEBI’s 2025 amendments to the Issue of Capital and Disclosure Requirements (ICDR) Regulations introduce several key changes. A new provision allows issuers to allot unsubscribed portions of rights issues to “specific investors” disclosed in the offer document. Promoters or controlling shareholders must now provide an exit offer to dissenting shareholders if there’s a change in the objects or terms of the contract specified in the offer document. Issuers are required to report pre-issue placements disclosed in the draft offer document to stock exchanges within 24 hours of such transactions. The definition of “associate” has been aligned with the Companies Act, 2013, and “financial year” is now defined as per the same Act. Additionally, the requirement to deposit 1% of the issue size with the stock exchange has been removed. These amendments aim to enhance transparency and flexibility in capital raising processes.
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Income Tax Updates
CBDT issued notification No 232025 dated March 28, 2025 introducing a new clause to Form 3CD on reporting share-buy back receipts and MSME payments
New clause requires the auditor to report on the amount received, if any, by the assessee from share buy-backs and the cost of acquisition thereto. Also, detailed changes in relation to MSME reporting i.e, amounts not paid in time to MSMEs under the MSMED Act are required to be reported.
CBDT issues clarification on Principal Purpose Test (PPT)
CBDT vide circular dated 15 March 2025 clarifies that earlier guidance issued on the applicability of PPT does not introduce any new legal interpretation and shall only apply to those DTAAs that have a PPT provision. Also clarifies that the said guidance is not intended to ‘interfere’ or ‘interact’ with domestic anti-abuse rules such as GAAR/SAAR/JAAR
CBDT notifies the last date for filing the declaration under DTVSV 2024
CBDT notifies April 30, 2025 as the last date on or before which a declaration in respect of tax arrears shall be filed by the declarant under the Direct Tax Vivad se Vishwas Scheme, 2024 to the designated authority.
Income Tax Changes effective from April 1st 2025:
The 2025 Budget introduced significant revisions to the Income Tax Act of 1961, aimed at simplifying India’s tax structure. These changes will take effect on April 1, 2025, and will apply starting from FY 2025-26.
Revised Income Tax Slab Rates
The 2025 Budget introduced new tax slab rates under Section 115BAC, also known as the New Tax Regime or Default Tax Regime. This change aims to help individuals save more and boost their spending capacity. The updated tax slab rates will apply to income earned from FY 2025-26 onwards.
| S. No | Total Income (in lacs) | Rate of tax u/s 115BAC(1A) |
| 1 | Upto 4,00,000 | Nil |
| 2 | 4,00,001 to 8,00,000 | 5% |
| 3 | 8,00,001 to 12,00,000 | 10% |
| 4 | 12,00,001 to 16,00,000 | 15% |
| 5 | 16,00,001 to 20,00,000 | 20% |
| 6 | 20,00,001 to 24,00,000 | 25% |
| 7 | Above 24,00,000 | 30% |
The rebate under Section 87A has been raised to ₹60,000, up from the previous ₹25,000. Additionally, the income threshold for eligibility has been increased from ₹7,00,000 to ₹12,00,000.
Changes in TDS Thresholds
Important changes to the Tax Deducted at Source (TDS) provisions will be implemented starting April 2025. A key proposal includes raising the threshold limits for several TDS sections, which will benefit both individuals and businesses. The updated TDS thresholds for different sections are as follows:
| Section | Description | Previous Thresholds (in INR) | Revised Thresholds (in INR) |
| 193 | Interest on Securities | Nil | 10,000 |
| 194A | Interest
– Senior Citizens – When the payer is a bank, a Cooperative society & post office – Others |
50,000 40,000
5,000 |
100,000 50,000
|
| 194 | Dividend | 50,000 | 10,000 |
| 194K | Income in respect of units of a Mutual Fund | 5,000 | 10,000 |
| 194B | Winnings from the Lottery | 10,000 yearly (Aggregate | 10,000 in respect of the single transaction |
| 194BB | Winnings from a Horse race | 10,000 yearly (Aggregate | 10,000 in respect of the single transaction |
| 194D | Insurance Commission | 15,000 | 20,000 |
| 194G | Income by way of commission, prize, etc. on lottery tickets | 15,000 | 20,000 |
| 194H | Commission or brokerage | 15,000 | 20,000 |
| 194-I | Rent | 240,000 yearly | 50,000 per month |
| 194J | Professional fees or Technical Services | 30,000 | 50,000 |
| 194LA | Income by way of Enhanced Compensation | 250,000 | 500,000 |
| 194T | Remuneration, Interest, and Commission Paid to Partners | Nil | 20,000 |
Omission of Sections 206AB & 206CCA – Removal of Higher TDS Provisions:
Sections 206AB and 206CCA, which required higher TDS/TCS rates for individuals and businesses that did not file income tax returns, have been eliminated. Previously, taxpayers who failed to file their returns for the past two years faced higher deduction rates. With the removal of these sections, businesses and individuals will no longer be subject to increased TDS/TCS rates due to non-compliance.
TCS Amendments
Key changes in Tax Collected at Source (TCS) provisions effective from April 1st 2025, are as below:
| Section | Description | Previous Thresholds (in INR) | Revised Thresholds (in INR) |
| 206C(1G) | LRS/Overseas Tour | 700,000 | 1,000,000 |
| 206C(1G) | Education Loan (LRS) | 700,000 | Nil (NO TCS) |
| 206C(1H) | Purchase of Goods | 5,000,000 | Nil (NO TCS) |
New Limits for Partner Remuneration:
Revised remuneration limits for partners in firms:
| Book Profit (in INR) | Remuneration |
| Old Limits | |
| Up to 300,000 | Higher of 150,000 or 90% of Book Profit |
| Above 300,000 | 60% of Book Profit |
| New Limits | |
| Up to 300,000 | Higher of 300,000 or 90% of Book Profit |
| Above 300,000 | 60% of Book Profit |
Other Changes:
- Startup Tax Holiday Extension (Section 80-IAC)
The government has extended the tax holiday for qualifying startups under Section 80-IAC until March 31, 2030. Eligible startups will continue to receive a 100% profit deduction for three consecutive assessment years within their first ten years of incorporation, as long as they meet the specified conditions.
- IFSC Benefits – Extended Tax Incentives:
To encourage financial activities in the International Financial Services Centre (IFSC), the government has extended tax incentives until March 31, 2030. These include exemptions and tax benefits for units operating within the IFSC, enhancing its appeal as a hub for global financial businesses.
- Unit Linked Insurance Plans (ULIPs) – Taxation on Proceeds:
Proceeds from Unit Linked Insurance Plans (ULIPs) will now be subject to capital gains tax if:
-
- The annual premium paid exceeds 10% of the sum assured, or
- The total premium across policies exceeds ₹2.5 lakh per year.
This change is intended to prevent the misuse of high-premium ULIPs as a tax-free investment option, while preserving their primary function as an insurance product.
GST Updates
Notification No. 16/2024-Central Tax, Dated August 6, 2024: Mandatory ISD Provisions Effective from April 1, 2025
Effective April 1, 2025, businesses receiving input service invoices for multiple branches must register as an Input Service Distributor (ISD) and allocate Input Tax Credit (ITC) accordingly. This includes shared services such as audit fees, legal consultations, and software subscriptions.
What was once optional, ISD registration is now compulsory under Notification No. 16/2024-Central Tax, dated August 6, 2024. Failure to comply may result in the disallowance of ITC or the imposition of penalties.
Input Service Distributor (ISD)
- Purpose: Allocates ITC on input services (excluding goods and capital goods) to branches under the same PAN but with different GSTINs.
- Distribution Method: ITC is distributed based on the proportion of turnover of each branch.
- Tax Categories: ITC is allocated as CGST, SGST, or IGST depending on the location of the receiving branch.
Compliance Requirements:
- A separate GST registration is mandatory for ISDs.
- GSTR-6 must be filed by the 13th of the following month; recipients can view ITC in GSTR-6A and claim it in GSTR-3B.
- ISDs are not required to file the GSTR-9 annual return.
- RCM invoices should be directed to the regular registration, not the ISD registration.
- The time limit for availing ITC is determined by the date of the original invoice. For example, ITC for FY 2024-25 must be claimed by November 2025.
- Businesses should update SOPs, automate ITC tracking, and train staff to ensure smooth compliance.
Documents required: Certificate of Incorporation, PAN of the applicant, identity and address proof of Directors, business address proof, bank details, and information about all GST registrations.
Other Notable GST Amendments for 2025:
Mandatory Multi-Factor Authentication (MFA) for All Taxpayers
From April 1, 2025, all GST taxpayers will be required to use Multi-Factor Authentication (MFA) to access GST portals. This initiative is designed to enhance the security of sensitive financial data and prevent unauthorized access. Businesses must ensure their authorized personnel have the proper tools and understanding to meet this requirement.
E-Way Bill Limitations
As of January 1, 2025, the generation of E-Way Bills will be limited to invoices issued within the last 180 days, with extensions allowed up to a maximum of 360 days. Furthermore, the National Informatics Centre (NIC) will introduce updated versions of the E-Way Bill and E-Invoice systems to enhance security and compliance. Companies will need to adjust their logistics and invoicing procedures to align with these new timelines and system updates.
Mandatory Sequential Filing of GSTR-7
Taxpayers submitting GSTR-7 (Tax Deducted at Source under GST) will now be required to file in a sequential order, without skipping any numbers. This change is designed to streamline TDS collection, improve Input Tax Credit (ITC) reconciliation, and boost the efficiency of the TDS system. Businesses must update their filing procedures to comply with this new requirement.
GST Rate Changes for Hotels and Used Cars
- Hotels: The “Declared Tariff” concept will be removed, and GST will be levied based on the actual amount charged to customers. Hotels charging more than ₹7,500 per unit per day for accommodation will face an 18% GST rate on restaurant services, with the added benefit of ITC.
- Used Cars: The GST rate on the sale of used cars will increase from 12% to 18%. This change is expected to affect the pre-owned car market and may result in higher tax liabilities for businesses involved in the sale of used vehicles.
New Invoice Series and Turnover Calculation
Starting April 1, 2025, businesses will be required to adopt a new invoice series to ensure accurate record-keeping and a seamless transition into the new financial year. Additionally, businesses must recalculate their total turnover to assess their GST registration eligibility and determine whether they are required to issue e-invoices.
GST Waiver Scheme 2025
Businesses that have settled all tax dues by March 31, 2025, may qualify for a GST waiver under the SPL01 or SPL02 schemes, provided they submit their application within three months of the start of the new fiscal year. This initiative aims to provide relief to compliant taxpayers and incentivize businesses to clear their dues on time.
Changes in GST Registration Process
Rule 8 of the CGST Rules, 2017 has been revised. Applicants choosing Aadhaar authentication will now be required to undergo biometric verification and photo capture at a GST Suvidha Kendra (GSK), followed by document verification for the Primary Authorized Signatory. Non-Aadhaar applicants must also visit a GSK for verification. Failure to complete these processes on time will prevent the generation of the Application Reference Number (ARN), leading to registration delays.
