SEBI Updates
Master Circular for Mutual Funds
The SEBI (Mutual Funds) Regulations, 2026 and the updated Master Circular come into force on April 1, 2026. The Master Circular consolidates all applicable circulars and guidelines issued up to March 20, 2026, replacing the June 27, 2024 version.
Earlier circulars specified in the appendices stand rescinded, though prior actions, rights, liabilities, and ongoing proceedings remain unaffected. Existing SEBI directions applicable to mutual funds continue alongside this Circular and other laws. Regulated entities must comply with the updated provisions and submit prescribed reports periodically.
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Introduction of Voluntary Lock-in/Debit Freeze Facility to Mutual Fund folios
SEBI has introduced a voluntary debit freeze facility for mutual fund investors to enhance digital security. Effective April 30, 2026, this facility will allow investors to lock their demat and non-demat folios, preventing any units from being debited until unlocked. The feature will initially be available through the Mutual Fund Central platform for KYC-compliant investors with valid email IDs and mobile numbers. Association for Mutual Funds in India will provide detailed guidelines for locking/unlocking folios and specify permissible transactions during the lock-in period. Asset Management Companies and Registrar and Transfer Agents must disclose the process and its impact on their websites and in the Statement of Additional Information (SAI).
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Review of Coverage of Settlement Guarantee Fund for Commodity Derivatives Segment
SEBI has issued a circular revising the coverage norms for the Core Settlement Guarantee Fund (SGF) in the commodity derivatives segment. The updated provisions require clearing corporations to calculate credit exposure due to the simultaneous default of at least three clearing members (and their associates) causing the highest credit exposure, replacing the earlier requirement of two members. Additionally, SEBI may grant exemptions or relaxations from SGF provisions on a case-by-case basis, considering market conditions and risk management adequacy. The circular, effective immediately, aims to enhance investor protection and facilitate ease of doing business.
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RBI Updates
Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2026- Currency Declaration Format
The Reserve Bank of India (RBI) has introduced the Foreign Exchange Management (Export and Import of Currency) (Amendment) Regulations, 2026, updating the framework under FEMA, 1999. A standardized Currency Declaration Form (CDF) has been introduced (Annex to Regulation 6), along with clear guidance for passengers bringing foreign exchange into India.
- No declaration required if foreign exchange ≤ USD 10,000 (overall) and/or currency notes ≤ USD 5,000
- CDF required for conversion/reconversion of foreign exchange through authorized dealers
- Visitors must retain CDF if carrying unutilized foreign exchange at departure
- Simplified compliance – no need to disclose detailed currency/travellers’ cheque breakdown or tourist address
This amendment simplifies passenger compliance, reduces documentation, and enhances clarity while maintaining regulatory oversight. The amendment shall be effective from the date of publication in the Official Gazette
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NOP-INR position of Authorized Dealers
The Reserve Bank of India (RBI), with reference to the Master Direction – Risk Management and Inter-Bank Dealings (July 5, 2016), has exercised its powers to regulate Net Open Positions in INR (NOP-INR) based on market conditions. Authorized Dealers are now required to maintain their NOP-INR positions in the onshore deliverable market within USD 100 million at the end of each business day. Compliance must be ensured at the earliest, and no later than April 10, 2026.
The directions are issued under Sections 10(4), 11(1), and 11(2) of the FEMA, 1999, and are without prejudice to other applicable legal requirements.
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Reporting under the Foreign Exchange Management Act, 1999 – Returns pertaining to External Commercial Borrowing (ECB)
- Form ECB and Revised Form ECB will be treated as returns which do not capture flows, and Late Submission Fees (LSF) will be calculated accordingly.
- LSF applicability: Each delayed submission of Form ECB 2 under a Loan Registration Number (LRN) will be treated as a separate instance for LSF computation.
- Submission timeline: The designated AD Category I bank shall submit the return (complete in all aspects) received from the eligible borrower, along with due certification, to the Reserve Bank within seven calendar days from the date of its receipt.
- LSF payment: To be made via NEFT/RTGS after RBI acknowledgment, as per instructions provided.
- Monitoring responsibility: AD banks must ensure that customers pay the applicable LSF for delayed submissions.
- Effective date: April 1, 2026.
- Issued under FEMA, 1999, without prejudice to other applicable laws.
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MCA Updates
The Companies (Accounting Standards) Amendment Rules, 2026
In exercise of the powers conferred under Section 133 read with Section 469 of the Companies Act, 2013, and in consultation with the National Financial Reporting Authority (NFRA) constituted under Section 132 of the Act, the Central Government hereby notifies the following amendments to the Companies (Accounting Standards) Rules, 2021:
- Short Title and Commencement
These rules shall be called the Companies (Accounting Standards) Amendment Rules, 2026. They shall come into force on the date of publication in the Official Gazette.
- Amendments to Accounting Standard (AS) 22
In the Annexure to the Rules, under Accounting Standard (AS) 22 – Accounting for Taxes on Income, the following changes are introduced:
(a) Insertion of Paragraph 2A: This Standard applies to taxes arising from OECD Pillar Two model rules, including qualified domestic minimum top-up taxes (“Pillar Two income taxes”). Enterprises are not required to recognize or disclose deferred tax assets or liabilities related to these taxes.
(b) Insertion of Paragraphs 32A–32D (Disclosures):
- Disclose application of the exception for recognizing and disclosing deferred tax assets and liabilities related to Pillar Two income taxes.
- Separately disclose current tax expense (income) related to Pillar Two income taxes.
- When Pillar Two legislation is enacted or substantively enacted but not yet effective, disclose known or reasonably estimable information about the enterprise’s exposure.
- Provide qualitative and quantitative details of such exposure at the reporting date (indicative ranges permitted). If information is not available or estimable, disclose that fact and the status of the assessment.
- Small and Medium-sized Companies are exempt from disclosure requirements under paragraphs 32C and 32D.
(c) Insertion of Paragraph 35 (Effective Date):
Paragraphs 2A and 32A apply immediately upon issuance and retrospectively.
Paragraphs 32B–32D apply for annual reporting periods beginning on or after April 1, 2025.
Disclosure requirements under these paragraphs are not mandatory for interim periods ending on or before March 31, 2026.
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GST Updates
Advisory on the Payment of pre-deposit while filing an appeal before the First Appellate Authority
Any payment made through Form GST DRC-03 is not automatically recognized by the GST system against any specific Demand ID. Therefore, such payments are not considered by the system while calculating the pre-deposit amount required for filing an appeal. To ensure that the payment made through Form GST DRC-03 is counted against a particular demand order, the payment must be linked with the respective Demand ID by filing Form GST DRC-03A on the GST portal. Filing Form GST DRC-03A.
Please click on the link below to view the Advisory on the Payment of pre-deposit while filing an appeal before the First Appellate Authority.
Advisory regarding confirmation of “Tax Liability Breakup, As Applicable” in GSTR-3B-reg
Effective from the February 2026 tax period, taxpayers must confirm the “Tax Liability Breakup, As Applicable” tab on the GSTR-3B payment page before filing. This mandatory step, triggered after offsetting liability, ensures proper tracking of previous period liabilities under Section 50 of the CGST Act. Taxpayers must verify auto-populated data, edit if needed, and click “SAVE.”
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Income Tax Updates
CBDT notifies Income Tax Returns (ITR) Forms for AY 2026-27
CBDT notifies ITR forms 1-7 and ITR U for AY 2026-27.
Finance Bill 2026 received the Presidential assent
The Finance Bill 2026 received the President’s assent on 30 March 2026 and is now effective.
CBDT amends Rule 114F, 114G & 114H of the Income-tax Rules, 1962
The CBDT vide notification No. 19/2026 dated March 5, 2026, has introduced amendments to Rule 114F, 114G & 114H of the Income-tax Rules, 1962 to enable effective implementation of the Foreign Account Tax Compliance Act and Common Reporting Standard in India and mandating financial institutions to identify “reportable accounts” of foreign residents, maintain records, and report this information to tax authorities. The amendments are effective from January 1, 2026.
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CBDT issues FAQ’s on interplay and transition to the New Income-tax Act, 2025
Income-tax Act, 2025, which replaces the erstwhile Income-tax Act, 1961, is effective from April 1, 2026. In this regard, the CBDT had issued FAQs on interplay and transition to the New Income-tax Act, 2025, that would facilitate the migration to the new Act.
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CBDT issues Form wise FAQ’s and guidance notes in respect of Income-tax Rules 2026.
The CBDT, exercising powers under Section 533 of the Income-tax Act, 2025, notified the Income-tax Rules, 2026, which come into force on 1st April 2026. Further, the CBDT has also issued detailed Form wise FAQ’s and guidance notes in respect of the new rules.
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CBDT clarifies that the PCIT/CIT have powers to condone the delay in filing Form 10A under section 12A (1) of the Income-tax Act, 1961
The CBDT vide circular no 1/2026 dated March 23, 2026 has clarified that in order to avoid genuine hardship to the eligible trust or institutions and ensure that they are not denied the benefit of registration solely on account of delay in filing Form No.10A, the jurisdictional Pr.CIT or CIT have the powers to condone delay in filing Form No. 10A under sub-clause (i) of clause (ac) of sub-section (1) of Section 12A; CBDT apprises that the Circular applies to all cases where Form No. 10A has been filed beyond the prescribed time limit and the application for condonation is pending or filed on or after the date of issue of this Circular.
TDS Certificate Issuance Deadline Extended
Due to technical glitches on the e-filing portal, deductor’s faced difficulties in generating and issuing TDS certificates for the quarter ending 31st December 2025 within the prescribed time. The CBDT vide Circular No. 2/2026 dated March 25, 2026 has extended the due date for issuance of TDS certificates under Section 203 (read with Rule 31) to 31st March 2026. Certificates issued within this extended period will be treated as having been issued on time.
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Revised Guidelines for Document Identification Number (DIN) on Tax Communications
In light of the retrospective amendment regarding the issue of DIN being mandatory, the CBDT has withdrawn its earlier circular dated August 14, 2019 on this subject and issued a new circular with respect to ‘Referencing by Document Identification Number’ (DIN). The circular lays down the updated manner in which income-tax authorities must reference a computer-generated Document Identification Number (DIN) on all official communications such as notices, letters, orders, and summons issued to any person. The Circular also specifically provides that in certain situations it may not be possible to reference a communication by DIN, which would be treated as a ‘matter of exception’ and such communications without DIN shall require post-factor approval within a fortnight by the Competent Authority.
Key highlights:
- Mandatory DIN on every page of any communication sent to taxpayers.
- Public communications like FAQs and press releases are exempt.
- Exceptions permitted in cases of technical failures, field visits without system access, PAN migration issues, or unavailability of system functionality – with a clear note stating “issued without DIN.”
- All such communications must receive post-facto approval within 15 days from a competent authority, with reasons recorded in writing.
- Applicable communications must be uploaded on the system with DIN within 15 working days of issuance.
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Unique Identification Number (UIN) for Tax Exemption Declarations — Procedure & Format
Section 393(6) of the Income-tax Act, 2025, provides for no deduction of tax in certain cases wherein a declaration in Part A of Form No. 121 is furnished by the payee to the payer as per Rule 211 of the Income-tax Rules, 2026. The person responsible for paying any income or sum of any nature referred to in section 393(6) of the Act (hereinafter called “payer”) shall enable the payee to furnish the declaration either in paper form or in electronic form after due verification through an electronic process. The declarant shall mandatorily quote its PAN in the declaration in Part A of Form No. 121 in accordance with the provisions of section 397 of the Act
A unique identification number shall be allotted under sub-rule (3) of Rule 211 of the Rules by the payer to each declaration received in paper or in electronic form.
In exercise of the powers conferred under sub-rule (3) of Rule 211 read with sub-rule (2) of Rule 332 of the Income-tax Rules, 2026, the Director General of Income-tax (Systems) hereby specifies the Procedure, formats and standards for generation and allotment of Unique Identification Number (UI N) in respect of Form No. 121 and quarterly furnishing of Part B thereof by the payer.
Key highlights:
- The payer shall allot a 26-character UIN to each declaration, consisting of a) Ten alphanumeric characters beginning with the letter “D” followed by nine digits (for example: 0000000001); b) Six digits representing the tax year for which the declaration is furnished (for example, for Tax Year 2026-27, it shall be 202627); c) n alphanumeric characters (for example, for TAN: MUMN12345A it shall be MUMN12345A)
- Paper declarations must be digitized by the payer and assigned a UIN in continuation of the running sequence number series.
- The running sequence number series referred to above shall be reset to “1” for each TAN of the payer at the beginning of every tax year.
- The payer shall furnish Part B of Form No. 121 containing the details of declarations received in Part A of Form No. 121 (whether digitized or electronic) within the prescribed timelines under the provisions of section 393(7) of the Income-tax Act, 2025 in the prescribed file format on the Income-tax e-filing portal
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Protocol amending the India-Brazil Double Taxation Avoidance Agreement (DTAA) was notified
The Ministry of Finance vide Notification No. 39/2026 dated March 31, 2026 notified the Protocol amending the Convention and the Protocol between the Government of the Republic of India and the Government of the Federative Republic of Brazil for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, as signed at Brasilia on the August 24, 2022.
