SEBI Updates
SEBI updated the Master Circulars for LODR and ICDR Regulations
SEBI has been issuing circulars pertaining to the compliance requirements specified in the Listing Obligations and Disclosure Requirements (LODR) Regulations, 2015. To facilitate the users to have access to the provisions of the circulars in one place, SEBI had issued a Master Circular dated 11 July 2023. This circular has been superseded by the updated Master Circular dated 11 November 2024, which consolidates all relevant circulars issued on or before 30 September 2024.
Click here to access the Master Circular
Similarly, SEBI has notified Master Circular for Issue of Capital and Disclosure Requirements (ICDR) on
11 November 2024, superseding the previous Master circular dated 21 June 2023. The updated master circular consolidates all relevant circulars that were issued on/before 30 September 2024.
Click here to access the Master Circular
Withdrawal of Master Circular on issuance of No Objection Certificate (NOC) for release of 1% of Issue Amount
SEBI has dispensed the requirement to deposit 1% of the issue size available for subscription to the public with the designated stock exchange by the Issuer company in order to facilitate ease of doing business to the Issuer company. Further, it has also withdrawn the Master circular on the Issuance of a No Objection Certificate for the release of 1% of the Issue Amount.
Click here to access the circular
Investments in Overseas Mutual Funds/ Unit Trusts by Indian Mutual Funds
The latest Master Circular for Mutual Funds dated 27 June 2024 enabled the Indian Mutual Funds to invest in overseas Mutual Funds/Unit Trusts (MF/UTs). Followed by this, the circular dated
04 November 2024 has outlined certain decisions taken by SEBI based on the feedback received from the industry, public and consultation with Mutual Fund Advisory Committee. Some of the important decisions are listed below:
- Indian Mutual Fund schemes may invest in overseas MF/UTs that have exposure to Indian securities, provided that the total exposure to Indian securities by these overseas MF/UTs should not be more than 25% of their assets.
- Such overseas MF/UTs disclose their portfolios at least on a quarterly interval to the public to maintain transparency
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Trading supported by Blocked Amount in the Secondary Market
Master Circular on Stock Exchanges and Clearing Corporations dated 16 October 2023, introduced a supplementary process for trading in the secondary market based on blocked funds in investors bank accounts, instead of transferring them upfront to the Trading Members. The facility of trading using the UPI block mechanism was introduced as a non-mandatory facility to be provided by the stock brokers.
Subsequently, SEBI vide its circular dated 11 November 2024 mandated that the Qualified Stock Brokers (QSBs) provide for the facility of trading supported by blocked amounts in the secondary market (cash segment) using the UPI block mechanism. This facility, thus provides enhanced protection to the cash collateral of the investors.
The provisions of this circular will come into effect from February 01, 2025
Click here to access the circular
Disclosure of expenses, half-yearly returns, yield and risk-o-meter of schemes of Mutual Funds
Based on the recommendation of the Mutual Fund Advisory Committee and in order to facilitate enhanced transparency, and a standardized approach towards disclosures by the Mutual Fund industry, SEBI vide its circular dated 05 November 2024 has mandated Mutual Funds (MFs) to disclose expenses, returns during the half year and yield for direct and regular plans separately.
Further, in order to facilitate ease of comprehension by investors, SEBI has introduced a color-coded system for the existing risk-o-meter. The risk-o-meter illustrates the different risk levels of the schemes. For instance, Irish green represents low risk, while red indicates very high risk.
Click here to access the circular
RBI Updates
Operational framework for reclassification of Foreign Portfolio Investment (FPI) to Foreign Direct Investment (FDI)
The Reserve Bank of India (RBI) has mandated that investment made by FPI along with its investor group should be less than 10 percent of the total paid-up equity capital on a fully diluted basis. Further, FPI investing in breach of the prescribed limit will have the option of divesting their holdings or reclassifying such holdings as FDI. Furthermore, RBI has provided an operational framework for such reclassification of foreign portfolio investment by FPI to FDI in the notification dated 11 November 2024.
Click here to access the notification
Income Tax Updates
CBDT notifies on e-filing of Form 42,43 & 44 under rule 131 of the Income Tax Rules, 1962
The CBDT has notified amendments in the Income-tax Rules, 1962, mandating electronic filing and verification for Forms 42, 43, and 44 These forms address appeals related to the recognition or approval of provident, superannuation, and gratuity funds. Effective 22.11.2024.
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DIT(systems) notifies electronic filing of Form 3CEDA and 3C-O
The Director General of Income Tax (Systems), vide Notification No. 5/2024 dated Oct 30, 2024 has notified electronic filing and verification of Form 3CEDA (Application for rollback of an Advance Pricing Agreement) and 3C-O (Application form for approval under subsection (1) of section 35CCC of the Act) effective from 31st October 2024.
CBDT notifies ‘SKAN Research Trust, Bengaluru’ for the purpose of relief u/s 35
The Central Board of Direct Taxes notifies the approval of ‘SKAN Research Trust, Bengaluru’ under the category ‘Research Association’ for scientific research under sec 35 of the Income Tax Act, where any sum paid to such Institute for carrying out scientific research be eligible to claim a deduction of the amount equivalent to the amount contributed/paid.
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CBDT notifies exemption for Foreign Representations from Section 194N
The Central Government, in consultation with RBI, exempts Foreign Representations approved by the Ministry of External Affairs, including UN agencies, Diplomatic Missions, and Consulates, from Section 194N of the Income-tax Act, 1961. This exemption aligns with the Diplomatic Relations (Vienna Convention) Act, 1972. Effective from December 1, 2024.
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CBDT Introduces Safe Harbour Policy for Rough Diamond Trading
The CBDT has amended the Income Tax Rules, 1962, introducing a Safe Harbour Policy for foreign mining companies trading rough diamonds within Special Notified Zones (SNZs). Effective from 1st April 2024, eligible companies can opt for simplified tax compliance by declaring a minimum 4% profit margin on gross receipts using Form 3CEFC. However, they will face restrictions such as ineligibility for certain tax deductions, loss carryforwards, unabsorbed depreciation, and mutual agreement procedures for income under these rules.
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CBDT Specifies Monetary Limits for Waiver of Interest Under Section 220(2)
The CBDT, under Section 220(2A) of the Income-tax Act, has issued guidelines for waiving interest on delayed tax payments. The monetary limits are Principal CIT/ CIT up to ₹50 lahks, CCIT/DGIT from ₹50 lakhs to ₹1.5 crore, and Principal CCIT above ₹1.5 crore. Waivers are granted if genuine hardship, uncontrollable circumstances, and taxpayer cooperation are proven. Effective immediately.
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CBDT Guidelines on Condonation of Delay for Forms 9A/10/10B/10BB
The CBDT, under Section 119(2)(b) of the Income-tax Act, delegates powers to handle delay condonation for Forms 9A/10/10B/10BB for AY 2018-19 and for subsequent years. Pr. CITs/CITs can address delays up to 365 days, while Pr. CCITs/CCITs/DGsIT handle delays exceeding 365 days. Applications must demonstrate genuine hardship and reasonable cause and cannot exceed three years from the relevant assessment year. Pending applications are also covered.
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CBDT Authorizes Condonation of Delay for Forms 10-IC and 10-ID for AY 2020-21 to AY 2022-23
The CBDT, under Section 119(2)(b) of the Income-tax Act, has authorized Pr. CITs/CITs to handle delay condonation applications for Forms 10-IC and 10-JD for AY 2020-21 to 2022-23, with delays of up to 365 days. Pr. CCITs/CCITs/DGsIT can address delays over 365 days. Applications must meet specific conditions, including filing on time and reasonable cause for delay. No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made.
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CBDT Launches Compliance-Cum-Awareness Campaign for AY 2024-25
The CBDT has initiated a Compliance-Cum-Awareness Campaign for AY 2024-25, focused on assisting taxpayers with accurately completing Schedule Foreign Assets (FA) and reporting foreign income in their ITRs. As required by the Black Money Act, taxpayers are urged to fully disclose foreign assets and income. Informational SMS and email messages will be sent to residents identified through international agreements Taxpayers can access detailed guidance on the official Income Tax website.
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Income Tax Department Launches Taxpayers’ Lounge at IITF 2024
The Income Tax Department set up a Taxpayers’ Lounge at the India International Trade Fair 2024, themed around “My contribution in developed India, my income tax is my responsibility.” The lounge offers services like PAN assistance, e-filing help, and queries on international taxation, along with interactive activities for children and engaging events to raise awareness about taxation and civic duties.
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Approval of PAN 2.0 Project by CCEA
The Cabinet Committee on Economic Affairs (CCEA) approved the Income Tax Department’s PAN 2.0 Project to streamline PAN/TAN services. It consolidates multiple platforms into a single portal, offering quicker, paperless processing and enhanced security. The project aligns with Digital India, providing efficient services, grievance redressal, and data protection.
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CBDT Extends Income Tax Return Filing Deadline for assessee required to furnish report u/s 92E
The CBDT has extended the income tax return filing deadline for AY 2024-25 from November 30, 2024, to December 15, 2024, for assessees covered under clause (aa) of Explanation 2 to Section 139(1) of the Income-tax Act.
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Net direct tax collection up by 15.41% and Refund up by 53.07%
As per the data released by the Income-tax department, the net direct tax collection is up by 15.41% and refunds by 53.07% as of 10 November 2024 compared with the data as of 10 November 2023.
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GST Updates
Powers of Additional/Joint Commissioners for Goods and Services Tax Intelligence Officers
The Central Government has granted powers to Principal Commissioners and Commissioners of Central Tax across India to pass orders or decisions regarding notices issued by the Directorate General of Goods and Services Tax Intelligence under various sections of the Central Goods and Services Tax Act, 2017. This will be effective from 1st December 2024.
Click here to access the notification
Judicial Updates
Supreme Court Judgment on ITC Eligibility for Property Construction
On 3rd October 2024, the Supreme Court ruled on the Safari Retreats case, addressing the interpretation of Section 17(5)(d) of the CGST Act, which limits the Input Tax Credit (ITC) on goods/services used for constructing immovable property. The Court introduced a “functionality test” to determine if a property qualifies as a “plant” for ITC eligibility. Properties used for leasing/renting, essential for business, can now qualify for ITC. The case was remanded to the Orissa High Court to determine if the shopping mall in question met the criteria for being a “plant.” This judgment offers relief to developers leasing commercial properties by allowing ITC on construction-related inputs.
