GSTJuly 2026
Zero-Rated vs Exempt Supplies Under GST: Why the Difference Matters for Input Tax Credit
Both zero-rated and exempt supplies can result in no GST being charged on the outward supply, yet they are treated very differently under GST law and the distinction directly affects Input Tax Credit. Under Section 16 of the IGST Act, exports and supplies to an SEZ developer or unit for authorised operations are zero-rated: they remain taxable supplies, so businesses can claim ITC on inputs, input services and capital goods, and, subject to conditions, a refund of accumulated ITC. Exempt supplies are different. Under Section 17(2) of the CGST Act, ITC is not available on inputs used exclusively for exempt supplies, and where a business makes both taxable and exempt supplies the credit must be apportioned under Rules 42 and 43 with the ineligible portion reversed. An exporter of software services can recover ITC on its procurements, while a hospital providing exempt healthcare services absorbs that GST as cost. Misclassifying a supply can lead to excess refund claims, wrong ITC availment, interest and penalties, so businesses with a mix of taxable and exempt supplies should periodically review their ITC apportionment.
TaxationJuly 2026
TDS on Rent: Same Transaction, Different Rules
TDS on rent is not a single provision. Under the Income-tax Act, 2025, all non-salary deductions are consolidated into Section 393, but rent continues to carry two distinct regimes depending on who is paying. A specified person, broadly a company, firm, LLP, or an individual or HUF crossing the turnover thresholds, deducts monthly at 10% on land, building, furniture and fittings and 2% on plant, machinery and equipment, deposits by the 7th of the following month, and requires a TAN. Any other individual or HUF deducts 2% flat, once in the last month of the tax year or tenancy, and reports through Form 141 without a TAN. The threshold is Rs 50,000 for a month or part of a month, not annual rent. Common errors include applying 10% to equipment hire, deducting on the GST-inclusive amount, and treating refundable deposits as rent, each of which carries interest and a 30% disallowance of the rent expense.
Corporate LawJuly 2026
Related Party Transactions Under Section 188: Getting the Approval Sequence Right
Related Party Transactions are not prohibited under the Companies Act, 2013; they are regulated to ensure transparency, prevent conflicts of interest, and protect minority shareholders. Most compliance failures arise not because an RPT was entered into, but because the approval sequence was incorrect. Every transaction under Section 188(1) requires a Board resolution, with interested directors disclosing their interest in Form MBP-1 and abstaining from the vote; an ordinary resolution is additionally needed where the transaction exceeds the thresholds under Rule 15, and listed companies must obtain prior Audit Committee approval under Regulation 23 of the SEBI (LODR) Regulations. Transactions in the ordinary course of business and on an arm's length basis are exempt from shareholder approval. Section 188(3) allows ratification within three months only to correct inadvertent omissions, not as a substitute for prior approval, and failure to ratify may render the transaction voidable at the option of the Board.
TaxationJuly 2026
Set-Off and Carry Forward of Losses: What Taxpayers Filing FY 2025-26 Should Know
A tax loss can reduce future tax, but only if the rules are followed. Losses are first adjusted within the same head, then across heads subject to restrictions, and only the balance is carried forward, for periods ranging from four to eight years depending on the type of loss. Except for house property loss, this benefit is available only where the ITR is filed on or before the due date, 31 July 2026 for most non-audit taxpayers, and a belated return forfeits it. Under the Income-tax Act, 2025, brought-forward losses remain protected under Section 536(2), though the original carry-forward period continues to run from the year the loss was first incurred.
GST UpdatesJuly 2026
Update: GSTAT Appeal Filing Deadline Extended to 31 July 2026
The Ministry of Finance, through a notification dated 30 June 2026, has extended the last date for filing appeals and applications before the Goods and Services Tax Appellate Tribunal (GSTAT) in specified cases. For orders communicated before 1 May 2026, the deadline to file an appeal has moved from 30 June 2026 to 31 July 2026, and applications relating to orders passed before 1 February 2026 have been extended to the same date. For orders communicated on or after 1 May 2026, the existing statutory timeline of three months from communication continues to apply. The extension gives taxpayers an additional month to file pending appeals in eligible cases.
Corporate LawJuly 2026
Update: MCA Extends Form DPT-3 Filing Deadline to 31 July 2026
The Ministry of Corporate Affairs has extended the due date for filing Form DPT-3 (Return of Deposits) for FY 2025-26 from 30 June 2026 to 31 July 2026, through General Circular No. 02/2026 dated 19 June 2026. Companies can now file up to 31 July 2026 without payment of additional fees. The extension relaxes the timeline, not the obligation: companies required to file Form DPT-3 for FY 2025-26 should use the additional time to complete the filing on or before 31 July 2026 to avoid additional fees and remain compliant.
Labour LawJuly 2026
Statutory Bonus Under the Payment of Bonus Act, 1965: The Two Ceilings Employers Often Confuse
Every establishment covered by the Payment of Bonus Act, 1965 must pay a minimum bonus of 8.33 percent, and up to 20 percent depending on the allocable surplus, with FY 2025-26 bonus due by 30 November 2026. Employers routinely confuse the two ceilings the Act applies: the eligibility ceiling of Rs 21,000 per month in Basic Pay plus Dearness Allowance, which decides who is covered, and the calculation ceiling of Rs 7,000 or the applicable state minimum wage, whichever is higher, on which the bonus is actually computed. In Delhi, Maharashtra, and Karnataka, minimum wages already exceed Rs 7,000, making the effective base higher than most employers assume.
Corporate LawJune 2026
Section 185: Why Promoters Cannot Freely Lend Company Funds to Themselves
Many promoter-led companies treat intra-group fund transfers as routine, yet Section 185 of the Companies Act, 2013 prohibits a company from directly or indirectly advancing a loan, or providing a guarantee or security, to its directors, their relatives, firms in which a director or relative is a partner, and certain connected entities. These transactions cannot simply be approved through a Board resolution and regularised later. A limited carve-out allows a holding company to lend to, or guarantee borrowings of, its wholly owned subsidiary, provided the funds are used for the subsidiary's principal business activities and the prescribed conditions are met. Non-compliance can attract a penalty of Rs 5 lakh to Rs 25 lakh on the company, and up to Rs 25 lakh, imprisonment up to six months, or both, for officers in default, with similar consequences for the recipient.
GST UpdatesJune 2026
GST on Intermediary Services: A Long-Running Dispute Finally Resolved
For years, intermediary services provided to overseas clients could be taxed in India even where the recipient was abroad and payment was received in foreign exchange, because Section 13(8)(b) of the IGST Act fixed the place of supply at the supplier's location. The Finance Act, 2026 has omitted Section 13(8)(b) with effect from 30 March 2026, so these services now fall under the general rule in Section 13(2) and may qualify as an export of services where the recipient is outside India. The change brings long-awaited certainty for IT and ITES firms, Global Capability Centres, and other cross-border service providers, but it operates prospectively and does not resolve pending disputes or refund claims relating to earlier periods.
Audit & AssuranceJune 2026
Ind AS 116: Why Higher EBITDA Does Not Always Mean Better Performance
Under Ind AS 116, most leases now sit on the balance sheet as a Right-of-Use asset and a lease liability, and operating lease rental expense is replaced by depreciation and interest. Because neither falls above the EBITDA line, reported EBITDA rises mechanically without any improvement in underlying performance. For companies finalising FY 2025-26 accounts, this also carries debt-covenant risk where ratios are tied to lease liabilities now recognised as debt.
TaxationJune 2026
Advance Tax: What Happens If the 15 June Instalment Is Missed
15 June 2026 was the due date for the first advance tax instalment for Tax Year 2026-27, a minimum of 15 percent of estimated tax liability. Missing it does not create a separate penalty or cause the instalment to disappear; it starts an interest clock under Section 425 of the Income-tax Act, 2025, the successor to Section 234C, at 1 percent per month on the shortfall. On a shortfall of Rs 50,000, waiting until September costs roughly Rs 1,500. Paying immediately, even a few days late, can save a full month's interest.
Corporate LawJune 2026
Form MSME-1: The Half-Yearly Return Many Companies Overlook
Every company with payments to a Micro or Small Enterprise supplier outstanding beyond 45 days must file Form MSME-1 with the MCA, a half-yearly return under Section 405 of the Companies Act, 2013. The next deadline is 31 October 2026 for the April to September 2026 period. It runs on its own fixed calendar, independent of the AGM or statutory audit, and the same 45-day clock connects directly to Section 43B(h) disallowance under the Income-tax Act.
GST UpdatesJune 2026
Reverse Charge Mechanism Under GST: Where Businesses Still Make Errors
Under GST, the supplier ordinarily collects and deposits the tax. The Reverse Charge Mechanism, governed by Sections 9(3) and 9(4) of the CGST Act, reverses that principle and makes the recipient liable. The errors are usually procedural: paying RCM through Input Tax Credit rather than the electronic cash ledger, overlooking legal, director, and imported digital services, or treating purchases from unregistered suppliers as automatically covered under Section 9(4). Missed RCM liability rarely surfaces once; it compounds through unpaid tax and interest under Section 50, usually at audit.
TaxationMay 2026
Annual Information Statement: Check This Before Filing Your ITR for FY 2025-26
ITR filing for FY 2025-26 is now open, but the Annual Information Statement on the Income Tax portal is only complete once reporting entities file their Statement of Financial Transactions by 31 May 2026. The department already holds transaction data from banks, employers, brokers, and registrars, and any ITR that does not match it is flagged automatically under Section 143(1). Allow two to three weeks to review and reconcile the AIS before submitting.
TaxationMay 2026
Advance Tax 2026-27: First Instalment Due 15 June 2026
Advance tax is a statutory obligation under the Income-tax Act, 2025. Under Section 404, any taxpayer whose estimated liability for Tax Year 2026-27 exceeds Rs 10,000 after TDS must pay in instalments, the first falling on 15 June 2026. Interest under Sections 424 and 425, the successors to Sections 234B and 234C, runs at 1 percent per month and cannot be waived by the assessing officer.
GST UpdatesMay 2026
GSTR-1 and GSTR-3B: Why Mismatch Between These Returns Triggers GST Scrutiny
GSTR-1 reports outward supplies. GSTR-3B declares tax liability and payment. The two are not independent returns. The GST Network runs automated matching algorithms that cross-verify both returns every filing period, and where material differences arise, scrutiny follows under Section 61, with consequences cascading into Section 73, Section 74, and Rule 88C restrictions on subsequent GSTR-1 filing.
GST UpdatesMay 2026
Input Tax Credit Under GST: What Section 17(5) Blocks
GST promised seamless credit flow. Section 17(5) of the CGST Act is the statutory exception, a negative list of expenses on which ITC is permanently denied regardless of business use or a valid tax invoice. Wrongly availed and utilised ITC may attract interest at 24 percent per annum under Section 50(3), in addition to full reversal. This is not merely a filing issue; it is a direct cash exposure.
Labour LawMay 2026
Gratuity Under the Payment of Gratuity Act, 1972: What Employers Often Misunderstand
The Payment of Gratuity Act applies once an establishment employs ten or more persons, and coverage generally continues even if strength later falls below ten. The five-year service threshold, the Section 4(6) forfeiture conditions, the Rs 20 lakh ceiling, and the Section 10(10) tax treatment are routinely misapplied. Liability accrues from the first year of service, so unreviewed provisioning translates directly into understated payroll and reporting exposure.
Corporate LawMay 2026
Form DPT-3: The 30 June 2026 Deadline is Six Weeks Away
Every company registered in India, other than a government company, must file Form DPT-3 with the MCA by 30 June 2026. Director loans, shareholder loans, and customer advances outstanding beyond 365 days all trigger the filing. Provisional auditor-certified figures are permissible. The deadline does not wait for the statutory audit to close.
TaxationMay 2026
TDS Under the Income-tax Act, 2025: What Every Deductor Must Update
From 1 April 2026, all TDS deductions, returns, and certificates are governed by the Income-tax Act, 2025. The rates are unchanged, but the 194-series, return forms, certificates, and the 15G/15H declaration framework have all been replaced. Finance teams and payroll systems that have not been remapped are already filing incorrectly.
TaxationMay 2026
Presumptive Taxation Has Moved to Section 58 Under the Income-tax Act, 2025
From Tax Year 2026-27, Sections 44AD, 44ADA, and 44AE have been consolidated into a single provision: Section 58. The five-year lock-in, the treatment of non-account payee instruments as cash, and deemed depreciation each carry practical implications worth modelling before opting in.
Audit & AssuranceMay 2026
The 60 Tax Audit Cap: A Per-Partner Ceiling, Not a Per-Firm One
From 1st April 2026, no chartered accountant in practice can sign more than 60 tax audits in a financial year. The limit applies to the individual signatory, not the firm, and is now enforced through UDIN-level field validation.
TaxationMay 2026
Finance Act 2026: What Actually Changed for Corporates
The Finance Act, 2026 received Presidential assent on 30 March 2026. Five provisions, including buyback taxation, the startup turnover threshold, reassessment timelines, recovery powers, and retrospective approval validity, evolved between Bill and Act and warrant a fresh corporate review.
International TaxMay 2026
India-France DTAA Amending Protocol: What Cross-Border Groups Should Reassess
The Amending Protocol signed on 23 February 2026 removes the contested Most-Favoured-Nation clause, restructures dividend rates into a 5/15 percent tier, shifts capital gains taxation fully to the source country, narrows the FTS definition, and introduces a Service PE clause.
International TaxApril 2026
Transfer Pricing Under the Income-tax Rules 2026: What Multinational Groups Should Reassess
The new safe harbour regime raises the IT services threshold from Rs 300 crore to Rs 2,000 crore and applies a uniform 15.5 percent margin. A three-year block under Section 92CA and hard timelines for unilateral APAs reshape the assessment cycle. The mechanisms are opt-in.
TaxationApril 2026
Section 43B(h): Why Large Enterprises Can No Longer Delay MSME Payments
Payments to registered Micro and Small Enterprises must now be settled within 45 days (with a written agreement) or 15 days (without one). Delayed payments face automatic disallowance as business expenditure, plus compound interest at three times the RBI bank rate.
Corporate LawApril 2026
Companies Compliance Facilitation Scheme 2026: A Three-Month Window to Clean Up
The MCA offers a rare amnesty from 15 April to 15 July 2026. File delayed annual returns and financial statements at just 10% of additional fees, with immunity from prosecution for covered delays. A strategic reset before enforcement tightens further.
Corporate LawApril 2026
Corporate Laws (Amendment) Bill 2026: 107 Amendments Your Board Should Track
The Bill proposes sweeping decriminalisation across the Companies Act and LLP Act, replacing criminal penalties with monetary fines. Other changes include a raised CSR threshold (Rs 10 crore), formal recognition of RSUs and SARs, and new auditor restrictions.
Tax ReformApril 2026
The Income Tax Act 2025: What Enterprise Leaders Must Know
The most significant structural overhaul of the Indian direct tax regime in over sixty years. Key changes include a unified tax year, abolition of the equalisation levy, and updated return deadlines extended to 48 months.
GST UpdatesMarch 2026
GST Changes You Must Act On Before the Financial Year Closes
GSTR-3B auto-population of liability breakups, the March 31 deadline for Composition Scheme and LUT filings, portal consolidation, and new GSTAT guidelines on appeals and provisional refunds.
Labour LawMarch 2026
New Labour Codes: How Indian Payroll and CTC Structures Must Change
The four new Labour Codes bring a 50% basic pay rule, faster gratuity for fixed-term workers, flexible 4-day work weeks, gig worker social security coverage, and tax relief on delayed PF and ESI deposits.
