Regulatory Updates_The PULSE_September 2025

MCA Updates

Extension of time for filing e-form DIR-3-KYC and web-form DIR 3-KYC-WEB without fee up to 15.10.2025 -reg.

The Ministry of Corporate Affairs has extended the timeline for filing e-form DIR-3-KYC and web-form DIR-3-KYC-WEB. Accordingly, the forms can now be filed without payment of fees up to 15th October, 2025, instead of the earlier deadline of 30th September, 2025.

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Companies (Compromises, Arrangements and Amalgamations) Amendment Rules, 2025

The Ministry of Corporate Affairs has amended Rule 25 of the CAA Rules, 2016, significantly widening the scope of companies eligible for the fast-track merger/demerger procedure and revising related forms.

It adds additional classes of companies eligible for the Fast-Track Route, which are:

• Two or more unlisted companies (excluding Section 8 companies) meeting prescribed thresholds of borrowings (not exceeding ₹200 crore) and with no repayment default.
• Holding company and its subsidiary, provided the transferor company is not listed.
• Two or more subsidiaries of the same holding company, with the transferor not being a listed company.
• Merger of a foreign holding company (outside India) with its Indian wholly-owned subsidiary

These rules are applicable to Division/transfer of undertakings (demergers) explicitly recognised under Section 232 (1)(b), settling interpretational gaps. The Amendment also revises and introduces several forms to strengthen disclosures and compliance. New Form CAA-10A requires an auditor’s certificate confirming borrowings are within ₹200 crore and that no defaults exist, while existing forms CAA-9, CAA-10, CAA-11, and CAA-12 have been substituted with updated formats covering notice of schemes, declaration of solvency, filing of approved schemes with valuation reports, and government confirmation orders. Further, companies regulated by RBI, SEBI, IRDAI, PFRDA or listed entities must serve scheme notices to the respective regulator or stock exchange and address any objections or suggestions received. The transferee company is also required to file the approved scheme along with shareholder and creditor meeting results, the valuation report, and a statement on the resolution of objections, ensuring greater regulatory oversight and transparency in the fast-track process.

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Clarification on holding a General meeting through Video Conference (VC) or Other Audio Visual Means (OAVM)

The Ministry of Corporate Affairs, vide its circular dated 22.09.2025, has allowed companies to continue conducting Annual General Meetings (AGMs) and Extraordinary General Meetings (EGMs) through Video Conference (VC) or Other Audio Visual Means (OAVM), or to transact items via postal ballot, in accordance with frameworks provided in earlier circulars (General Circulars Nos. 20/2020, 02/2022, 10/2022, 09/2023, 09/2024 for AGMs and 14/2020, 03/2022, 11/2022, 09/2023, 09/2024 for EGMs). It is clarified that this circular does not extend the statutory timelines for holding AGMs, and companies failing to comply with applicable timelines remain liable to legal action under the Companies Act, 2013. All other requirements prescribed in the earlier circulars continue to apply.

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SEBI Updates

Ease of doing investment – Smooth transmission of securities from Nominee to Legal Heir

SEBI has streamlined the process for transmission of securities from nominees to legal heirs to enhance ease of investment. Earlier, nominees faced unnecessary capital gains tax assessments during such transfers, despite clause (iii) of Section 47 of the Income Tax Act, 1961 exempting them from tax. To address this, SEBI, in consultation with the CBDT, has introduced a standard reason code “TLH” (Transmission to Legal Heirs) for reporting such transactions, ensuring correct tax treatment and eliminating refund-related hassles. The existing procedural framework under the SEBI (LODR) Regulations, 2015 and the Master Circular for RTAs dated June 23, 2025, will continue, with implementation effective from January 1, 2026.

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Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2025

SEBI has introduced the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Second Amendment) Regulations, 2025, to bring in greater clarity and uniformity in disclosure and issuance norms. These amendments, with the exception of Regulations II and VI of Sub-regulation 3, will take effect on September 8, 2025. Regulations II and VI of Sub-regulation 3will come into force 30 days after their publication in the Gazette.

Key Amendments:

1. Inclusion of Accredited Investors (Reg. 2):

• • Accredited Investors (as defined under AIF Regulations, 2012) can now invest in Angel Funds under specific conditions.

2. Dematerialization Requirement (Reg. 7 & 230):

• • Specified securities held by promoters, directors, KMPs, QIBs, employees, and other specified shareholders must be in demat form before filing the draft offer document.
  • Applies to both Regulation 7 (initial public offering) and Regulation 230 (further public offering).

3. Changes to Offer-for-Sale Provisions (Reg. 8 & 105):

• • Clarifies that equity shares offered under a court/tribunal-approved scheme (under Companies Act, 2013) must be in lieu of business/invested capital existing for over a year before scheme approval.

4. Expanded Eligible Allottees (Reg. 15 & 237):

• • Allottees in preferential issues may now include:
    • Alternative Investment Funds (AIFs)
    • Foreign Venture Capital Investors
    • Scheduled commercial banks
    • Insurance companies
    • Non-individual public shareholders with ≥5% post-issue capital
    • Entities in promoter group (excluding promoters)

5. Clarifications for NPOs & Social Stock Exchange (Reg. 292A–292F):

• • Trusts and charitable societies can register as Not-for-Profit Organizations (NPOs).
  • Mandatory for NPOs to list at least one project within two years of registration on Social Stock Exchange (SSE).
  • Defines qualifications for Social Impact Assessment Organizations.

6. Enhanced Disclosure Norms in Schedule VII:

• • Streamlined and restructured disclosure sections in offer documents, including:
    • Risk factors with past instances and mitigation strategies.
    • Capitalization statements (before/after issue).
    • Detailed financials and key ratios.
    • Board and senior management details.
    • Litigation disclosures with defined materiality thresholds.

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Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2025

SEBI has notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2025, effective from the date of publication in the Official Gazette (8th September 2025). The amendments bring significant changes to the issuance of securities, disclosure timelines for Social Enterprises, and the impact assessment framework under the Social Stock Exchange (SSE) framework.

The key highlights are as follows:

• Insertion of Regulation 39(2A): Listed entities are now required to issue securities pursuant to any scheme of arrangement, sub-division, split, or consolidation only in dematerialised form. For investors without demat accounts, companies must open a separate demat account to hold such securities.
• Substitution of Regulation 91(C)(1): Social Enterprises and Not-for-Profit Organizations (NPOs) listed on SSEs must now make separate disclosures for financial and non-financial aspects. Financial disclosures are due by October 31st or the income tax return filing due date, whichever is later, while non-financial disclosures must be made within 60 days from the financial year-end.
• Amendment to Regulation 91(E): The term “Social Impact Assessment Firm” has been broadened to “Social Impact Assessment Organization.” Listed projects must undergo third-party assessment, while non-listed projects may be self-certified. The annual impact report must now cover at least 67% of the previous year’s program expenditure. A new sub-regulation (2A) mandates that Social Enterprises registered on SSEs but not raising funds must submit a self-certified annual impact report. NPOs may remain registered on an SSE without raising funds for a maximum of two years, after which at least one project must be listed to maintain registration.
• Amendment to Schedule VII: The provisos to clause B, sub-clause (1) and (2) have been omitted, simplifying related procedural requirements.

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Income Tax Updates

CBDT Extends Due Date for Filing Audit Report to 31st October 2025

The Central Board of Direct Taxes (CBDT) has extended the due date for filing of the audit report from 30th September, 2025 to 31st October, 2025 for assessees referred under clause (a) of Explanation 2 to sub-section (1) of section 139 of the Income-tax Act, 1961.

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GST Updates

GST 2.0

India has introduced GST 2.0 with simplified slabs – 0%, 5%, 18% and 40% bringing big changes for essentials, consumer goods, durables and luxury items.

The Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 9/2025-Central Tax (Rate), dated September 17, 2025, on the recommendations of the 56th GST Council meeting chaired by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman on 3rd September 2025 in New Delhi.

Key GST Rate Notifications:

• 2.5% GST on essential goods under Schedule I, including milk products, honey, cereals, pulses, jaggery, edible oils, dried fruits, affordable footwear and apparel, medicines, diagnostic kits, fertilizers, agarbatti, soaps, utensils, and agricultural machinery.
• 9% GST on goods notified under Schedule II, covering processed foods, household products, and industrial inputs.
• 20% GST on luxury and sin goods listed in Schedule III.
• 1.5% GST under Schedule IV, providing relief on selected essentials.
• 0.125% GST under Schedule V for specified precious goods.
• 0.75% GST under Schedule VI for special category goods.
• 14% GST on items under Schedule VII, including certain higher-taxed categories.

This marks a new phase of GST simplification with only three main slabs, sectoral exemptions, and clearer HSN/SAC mapping.

Advisory: New Changes in Invoice Management System (IMS)

Several important updates have been introduced in the Invoice Management System (IMS) to ease taxation compliance for taxpayers. Key changes include the option to keep specified records pending for a limited time, new provisions for declaring and reversing Input Tax Credit (ITC) amounts, and the upcoming ability to save remarks when taking actions on records. These updates will be effective from the October tax period, and taxpayers are encouraged to review them carefully before filing returns.

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Advisory to file pending returns before the expiry of three years

Taxpayers are advised to file all pending GST returns promptly, as new rules implemented from October 2025 will prohibit return filing after three years from their due date. Starting November 1, 2025, GST forms such as GSTR-1, GSTR-3B, GSTR-4, and others relating to tax periods up to September 2022 and earlier will be barred from submission on the GST portal. To avoid compliance issues, taxpayers should reconcile and file any outstanding returns at the earliest.

For ease of reference and better clarity, the latest GST returns that will be barred from filing w.e.f 1st November 2025 are detailed in the table below:

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Invoice-wise Reporting Functionality in Form GSTR-7 on portal-reg

The GSTN portal has enabled invoice-wise reporting functionality in Form GSTR-7, following the recent amendment under Notification No. 09/2025 – Central Tax. From the September 2025 tax period onward, all TDS deductors must provide invoice-level details when filing GSTR-7, with the due date for the September return set for October 10, 2025. Any issues faced during filing should be reported using the Self-Service Portal on the GST portal for swift resolution.

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