MCA Updates
The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2025
The Central Government has issued the Companies (Meetings of Board and its Powers) Amendment Rules, 2025, effective upon publication in the Official Gazette. The amendment substitutes sub-rule (2) of rule 11 of the 2014 Rules to clarify the scope of “business of financing industrial enterprises” as specified under section 186(11)(a) of the Companies Act, 2013. The term now includes:
- With regard to a Non-Banking Financial Company registered with the Reserve Bank of India, “business of giving of any loan to a person or providing any guaranty or security for due repayment of any loan availed by any person in the ordinary course of its business”; and
- With regard to a Finance Company registered with the International Financial Services Centres Authority, “activities as provided in sub-clause (a), or sub-clause (e) of clause (ii) of sub-regulation (1) of regulation 5 of the International Financial Services Centres Authority (Finance Company)Regulations, 2021 in the ordinary course of its business”.’
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SEBI Updates
Timeline for submission of information by the Issuer to the Debenture Trustee(s)
Debenture Trustees are obligated to undertake periodic due diligence pursuant to Regulations 15(1)(s) and 15(1)(t) of the SEBI (Debenture Trustees) Regulations, 1993 (“DT Regulations”), read with the master circular dated August 13, 2025, which prescribes the due-diligence framework and the requisite terms and conditions to be incorporated in the Debenture Trust Deed to ensure continuous monitoring. SEBI has, at present, specified the reports and certificates—outlined in the table below—that issuers are required to submit to the Debenture Trustees to enable them to discharge their responsibilities in an efficient and timely manner:
|
Reports/ Certificate |
Periodicity |
| Security cover Certificate (in the format as specified in Annexe-VA to DT Master Circular) | Quarterly basis within 60 days from the end of each quarter, except last quarter when submission is to be made within 75 days. |
| A statement of the value of pledged securities | |
| A statement of value for the Debt Service Reserve Account or any other form of security offered | |
| Net worth certificate of guarantor in case debt securities are secured by way of personal guarantee) | Half yearly basis within 60 days from the end of each half-year. |
| Financials/value of guarantor prepared on the basis of audited financial statement, etc. of the guarantor (secured by way of corporate guarantee) | Annual basis, within 60 days from the end of each financial year. |
| Valuation report and title search report for the immovable/ movable assets, as applicable. | Once in three years, within 60 days from the end of the financial year. |
These provisions shall come into effect from the quarter ended December 31, 2025.
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Modifications to Chapter IV of the Master Circular for Debenture Trustees dated August 13, 2025
Chapter IV of the Master Circular for Debenture Trustees dated August 13, 20251 (‘DT Master Circular’), inter alia, specifies provisions in respect of the Recovery Expense Fund (REF). While the DT Master Circular specifies the broad purpose of REF, it does not explicitly specify the list of purposes for which REF can be utilized, and hence, the DTs face certain difficulties in obtaining consent as well as reimbursement from REF. Accordingly, SEBI has modified the introductory paragraph and paragraph 2 – Manner of utilization of Recovery Expense Fund of Chapter IV of the DT Master Circular. The highlights are provided below:
- The Debenture Trustee (DT) or Lead Debenture Trustee (LDT) may use the Recovery Expense Fund (REF) to cover enforcement and legal expenses in the event of default.
- No prior debenture-holder approval is required when funds are used for activities explicitly listed (e.g., consents, meetings, legal fees). The DT must simply notify holders and update its website.
- For any other type of expense, prior consent from debenture holders is required, and the Designated Stock Exchange must be informed.
- The DT must request fund release from the Stock Exchange and submit an auditor’s certificate; the exchange must release funds within five working days.
- The LDT is the DT chosen by other trustees or the one representing holders of more than 50% of outstanding debt value.
- The DT must maintain proper accounts of REF expenses and provide an annual update to debenture holders on fund utilization.
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Specification of the terms and conditions for Debenture Trustees for carrying out activities outside the purview of SEBI
SEBI amended the DT Regulations on October 27, 2025, introducing Regulation 9C to clarify the additional activities Debenture Trustees (DTs) may undertake.
DTs may engage in:
- Activities regulated by other financial sector regulators (FSRs), as permitted by their respective regulations; and
- Fee-based, non-fund-based financial services activities not regulated by SEBI or any other FSR.
Such activities must be conducted on an arm’s – length basis through Separate Business Units (SBUs), segregated by a Chinese Wall and ring-fenced from the SEBI-regulated activities.
DTs must maintain separate grievance-redressal mechanisms, records, staff (with limited exceptions), and ensure proper segregation of IT and other resources (with board-approved procedures).
DTs must disclose on their websites the list of non-SEBI-regulated activities and clearly state that SEBI investor protection mechanisms do not apply.
When undertaking activities regulated by other FSRs, the relevant regulator must be disclosed, and the DT must comply with that regulator’s framework.
All advertising, marketing material, and webpages for non-SEBI-regulated activities must be distinct from SEBI-regulated DT activities.
Prior written disclosures must be made to all stakeholders (clients, beneficiaries, counterparties), and their acknowledgement obtained, confirming understanding of risks and the absence of SEBI protections.
Existing arrangements for non-SEBI-regulated activities must be regularized within six months, with stakeholder confirmations and a compliance report submitted to SEBI.
DTs must include an undertaking in their half-yearly compliance report confirming adherence to Regulation 9C and related circular provisions.
DTs also regulated by the Reserve Bank of India must carry out DT activities only through SBUs, which must fully comply with all segregation and disclosure requirements.
The circular shall come into force with immediate effect.
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RBI Updates
Amendments to Directions – Compounding of Contraventions under FEMA, 1999
To streamline the receipt of compounding application fees and the “sum for which a contravention is compounded” (“compounding amount”), the account details designated for receiving such payments via National Electronic Fund Transfer (NEFT) and Real Time Gross Settlement (RTGS) have been revised. Consequently, Annexure I of the aforementioned Master Directions has been amended to reflect the updated account information.
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Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025
Pursuant to the powers vested in it under Sections 7, 8, and 47(2) of the Foreign Exchange Management Act, 1999, the Reserve Bank of India has issued the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations, 2025. These regulations shall come into effect on the date of their publication in the Official Gazette. The amendments to the Foreign Exchange Management (Export of Goods and Services) Regulations, 2015 (“Principal Regulations”) are outlined below:
Amendment to Regulation 9:- In the principal regulations, in regulation 9 –
- In sub-regulation (1) for the words ‘nine months’, the words ‘fifteen months’ shall be substituted.
- In sub-regulation (2), in clause (a), for the words ‘nine months’, the words ‘fifteen months’ shall be substituted.
Amendment to Regulation 15:- In the principal regulations, in regulation 15 –
- In sub-regulation (1), in clause (i), for the words ‘one year’, the words ‘three years’ shall be substituted.
- In proviso to sub-regulation (1), for the words ‘one year’, the words ‘three years’ shall be substituted.
- In sub-regulation (2), for the words ‘one year’, the words ‘three years’ shall be substituted
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Income Tax Updates
CBDT launches 2nd NUDGE initiative to strengthen voluntary compliance in respect of Foreign Assets
The Central Board of Direct Taxes (CBDT) continues to strengthen its data-driven, nonintrusive and taxpayer-centric measures aimed at improving voluntary compliance. The “Non-intrusive Usage of Data to Guide and Enable (NUDGE)” initiative reflects CBDT’s commitment to a forward looking technology-enabled, and trust-based tax administration focused on promoting accurate reporting and enhancing revenue mobilization.
The CBDT is launching the second NUDGE campaign, under which SMSs and emails will be issued from 28th November 2025 to taxpayers who have been identified as high-risk cases where foreign assets appear to exist but have not been reported in the ITRs filed for AY 2025-26, advising them to review and revise their returns on or before 31st December 2025 to avoid penal consequences.
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CBDT issues an office Memorandum for giving effect to the outcome reached under the Mutual Agreement Procedure (MAP) in cases where an appeal is pending in the office of the Commissioner of Income Tax (Appeals) (CIT-A)
It has been observed that in various cases where a MAP application has been filed by the taxpayer in India under Rule 44G of the Income Tax Rules, 1962, the appeal is pending in the office of CIT (A). As per the procedure laid down in sub-rule (8) of Rule 44G, after successful resolution of MAP by the Competent Authority (CA) in India and receipt of the mutual agreement, the taxpayer is required to convey its acceptance or rejection of the resolution in writing to the CA along with proof of withdrawal of appeal. It is observed that for cases where the appeal is pending at the level of CIT (A) and a request for proof of withdrawal of appeal is made by the taxpayer, no procedure is explicitly laid down for the CIT (A) for this purpose.
It is hereby provided that in cases where the appeal is pending at the level of CIT (A) and a request for withdrawal of appeal for grounds covered by the resolution under MAP is filed by the taxpayer, the office of CIT (A) may send an intimation of acceptance of withdrawal of such appeal or such grounds of appeal to the taxpayer in all such cases. The intimation issued by the CIT (A) shall be treated as proof of withdrawal of appeal for the purpose of giving effect to the resolution reached under MAP as required under sub-rule (8) of Rule 44G of the Income Tax Rules, 1962.
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CBDT has released the Time Series Data for FYs 2000-01 to 2024-25
The data reveals the following:
- Direct tax collection for FY 2000-01 stood at Rs. 68,305 Cr and increased to Rs. 22,26,375 Cr in the FY 2024-25;
- Direct-Tax GDP Ratio for FY 2000-01 stood at 3.25% and increased to 6.73% in FY 2024-25;
- The cost of collection was at 1.36% in FY 2000-01, which is reduced to 0.41% in FY 2024-25.
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Capital Gains Accounts (Second Amendment) Scheme, 2025
Notification No. 161/2025 [F. No. 370142/23/2024-TPL] / SO 5293(E), effective from November 19, 2025, updates the Capital Gains Account Scheme of 1988 to modernise tax compliance for long-term capital gains exemptions under sections like 54, 54F, and 54GA.
Key changes include the addition of State Bank of India subsidiaries, corresponding new banks, and authorized private banks at non-rural branches, as eligible banks for the purpose of the Capital Gains Scheme. Also, the scheme introduces digital payments via UPI, net banking, cards, and more. From April 1, 2027, account closures require electronic filing with digital signatures or EVC, alongside electronic passbooks and statements for streamlined record-keeping. This digitization enhances convenience for taxpayers reinvesting gains in property or SEZs before ITR deadlines.
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Notification on Amending Protocol between India and Belgium for Avoidance of Double Taxation
Notification No. 160/2025 [F. No. 505/2/1989-FTD-I] / SO 5074(E), issued on November 10, 2025, notifies the amendment to the Agreement and Protocol between the Government of India and the Government of Belgium signed in 1993 and amended in 2017.
This notification gives effect to the updated provisions aimed at preventing double taxation and fiscal evasion with respect to income taxes. The amended protocol includes revised definitions, mutual assistance in tax collection, and safeguards for confidential information exchange between the contracting states, thereby enhancing bilateral tax cooperation and compliance frameworks.
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Transfer Pricing Tolerance Limits for AY 2025-26
Notification No. 157/2025 [F. No. 500/1/2014-APA-II] / SO 5053(E), dated November 6, 2025, sets the tolerance range for Arm’s Length Price (ALP) variations in international and specified domestic transactions under Section 92C(2) of the Income-tax Act. It deems the transaction price as ALP if the variation does not exceed 1% for wholesale trading or 3% in all other cases, providing compliance certainty for Assessment Year 2025-26.
Wholesale trading is defined as sales without value addition, where purchased goods are resold as-is or after minor processes, with the notification applying retrospectively without adverse impact on taxpayers. This continuity from prior years supports reduced litigation and aligns with India’s evolving transfer pricing framework.
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GST Updates
Simplified GST Registration Scheme for Small Taxpayers
Starting November 1, 2025, the Simplified GST Registration Scheme under Rule 14A offers an easier registration process for small taxpayers with a monthly output tax liability below Rs. 2.5 lakh. Eligible applicants must complete Aadhaar authentication and can expect registration within three working days. Taxpayers can withdraw from the scheme by meeting specific filing requirements and ensuring no pending amendment or cancellation proceedings. This initiative aims to reduce compliance burdens and streamline GST registration for small businesses.
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Advisory on Furnishing Bank Account Details under Rule 10A
Effective November 20, 2025, taxpayers (excluding those registered under TCS, TDS, or suo-moto) must submit their bank account details within 30 days of registration or before filing outward supply details in GSTR-1 or IFF, whichever is earlier. To prevent suspension of GST registration and business disruption, taxpayers are urged to update these details promptly via the GST portal under Services > Registration > Amendment of Registration Non-Core Fields.
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Major GST Updates Effective from 1st November 2025
- Risk-Based Provisional Refunds for Zero-Rated Supplies
To fast-track refunds and improve exporters’ working capital, the GST Council has introduced system-driven, risk-based provisional refunds for zero-rated supplies (exports and SEZ supplies).
- As per the amended Rule 91(2) of the CGST Rules, 2017, 90% of eligible refund claims will now be sanctioned provisionally based on automated risk evaluation.
- Provisional Refunds for Inverted Duty Structure (IDS)
Manufacturers and traders dealing with input tax accumulation under the Inverted Duty Structure will now also benefit from 90% provisional refunds, ensuring quicker liquidity flow.
- Three-Year Time Limit for Filing GST Returns
In line with the Finance Act, 2023 and Notification No. 28/2023, the GST portal will enforce a strict three-year time limit for filing all GST returns.
- This rule becomes fully effective from 1st November 2025.
- After three years from the original due date, returns cannot be filed.
- “Pending” Option for Credit Notes in IMS
The Invoice Management System (IMS) has been upgraded with a new “Pending” feature for credit notes.
Key highlights:
- Credit notes can be marked as “Pending” for one tax period.
- ITC reversal can be revised once the credit note is accepted.
- This enhancement aims to minimize disputes regarding credit note acceptance and timing.
- GSTR-9 & GSTR-9C Enabled for FY 2024–25
Annual return forms GSTR-9 and GSTR-9C for FY 2024–25 are now live on the GST portal.
- 30th November 2025 is the last date to claim ITC related to FY 2024–25.
