Recent legal and regulatory updates from August 18-24, 2025, include changes across multiple sectors in India. In income tax, new rules 3C and 3D have been introduced, setting income thresholds of Rs. 4 lakh and Rs. 8 lakh respectively, which will make certain perquisites taxable for high-income employees. The Income Tax Act 2025 was also notified to replace the 1961 Act from April 1, 2026, aiming for a simpler, digital tax regime. The CBDT also increased the exemption limit for prosecuting undisclosed foreign assets to Rs.20 lakh. Key court rulings include the Supreme Court mandating that the time taken for Section 144C proceedings must fall within the Section 153(3) limitation period and upholding mandatory pre-deposits for appeals in GST and Central Excise cases. In GST, the GSTR-3B due date was extended for several districts in Maharashtra, while in customs, anti-dumping duties on various goods and customs duty on cotton imports were either extended or exempted. Other notable updates include a revised Minimum Export Price for honey, new SEBI consultation papers on block deals, and a new framework for a closing auction session.
Notifications & Circulars issued during week (18th– 24th Aug 2025)
(Income Tax, GST, Central Excise, Custom Duty, DGFT, SEBI, MCA, IBBI, RBI)
A. Income Tax
Amendment in Income Tax Rules for income limit for exemption of perquisites: Rules 3C and 3D has been inserted, which prescribe new income thresholds for claiming exemptions on perquisites. Rule 3C sets the salary income threshold at Rs. 4,00,000 for section 17(2)(iii)(c). Thus, employees with salary income exceeding Rs. 4 lakh in a financial year will not be able to claim exemption on specified perquisites such as meal coupons, rent-free accommodation, or medical reimbursements, which will become fully taxable. Rule 3D sets the gross total income threshold at Rs. 8,00,000 for section 17(2)(vi). Thus, if an employee gross total income exceeds Rs 8 lakh, the tax benefit of concessional loan facilities will not be available, and the perquisite value will be taxed. These amendments are intended to target exemptions at middle-income salaried employees while limiting tax-free perquisite benefits for higher-income groups.
(Link: Income Tax Notification 133/2025 Dated 18/08/2025)
Exemptions to Tamil Nadu Electricity Regulatory Commission: Tamil Nadu Electricity Regulatory Commission, a body constituted by the Government of Tamil Nadu, has been notified under section 10(46) for exemption on its income arising from Government grants, Fees, Penalties and interest on bank deposits.
(Link: Income Tax Notification 134/2025 Dated 19/08/2025)
Amendment in Income Tax Rules for IFSC Insurance: The notification makes specific changes to Form 10CCF within Appendix II, relating to IFSC Insurance Offices reporting their income for claiming deductions under Section 80LA. It clarifies that, the “gross income” should be calculated as per the provisions of Section 44 and the First Schedule of the Income-tax Act. It also specifies that the “gross eligible income” field in the form can be submitted as ‘Nil’ in cases where the profits and gains are calculated using these specific provisions.
(Link: Income Tax Notification 135/2025 Dated 20/08/2025)
Amendment in Income Tax Rules: CBDT has amended Rule 21AIA to align definition of ‘Specified Fund’ with Section 10(4D). The term “specified fund,” will now carry the same meaning as given in the Explanation to section 10(4D) of the Income Tax Act.
(Link: Income Tax Notification 136/2025 Dated 21/08/2025)
Exemptions to Kanpur Development Authority: Kanpur Development Authority, an authority constituted under the Uttar Pradesh Urban Planning and Development Act, 1973, has been notified under section 10(46A) for exemption on its income, provided the authority continues to operate for the specified purposes under Section 10(46A) (a) of the Act.
(Link:Income Tax Notification 137/2025 Dated 21/08/2025)
Income Tax Act 2025 notified, to apply from 1st April 2026: It will replace the over six-decade-old Income Tax Act 1961, aims to usher in a simpler, more transparent, and compliance friendly direct tax regime. The key changes include, Simplification of legislation, Introduction of Tax Year, Focus on Digital and Faceless administration, No change in tax rates, New tax regime for NPOs.
(Link: Income Tax Act 2025 Notification Dated 21/08/2025)
CBDT amends Black Money Act, provide Rs. 20 Lakh asset exemption: The amended instructions relates to prosecution provisions under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The extant instructions provide that prosecution would not be initiated for foreign bank accounts with an aggregate balance of up to ₹5 lakh. The new instructions now provide that prosecution proceedings under Sections 49 and 50 of the BMA, 2015, will no longer be initiated for assets (excluding immovable property) where the total value does not exceed ₹20 lakh at any point during the relevant previous year.
(Link: CBDT Instructions Dated 18/08/2025)
SC, Proceedings under section 144C has to be concluded within limitation prescribed under section 153(3): Case of ACIT vs Shelf Drilling Ron Tappmeyer Ltd, SC Judgement Dated 8th August 2025. The apex court held that time consumed for concluding the proceeding under section 144C (Reference to dispute resolution panel) has to be subsumed within the limitation prescribed under section 153(3) (Time limit for completion of assessment, reassessment and re-computation) of the Income Tax Act. If orders are not made within time stipulated under section 153(3), then there would be no final assessment order and return as filed by the assessee would have to be accepted.
HC, Consideration for use of computer software through EULAs/ distribution agreement is not royalty: Case of CIT International Taxation vs Xiacom (NZ) Ltd, HC Delhi Judgement Dated 12th August 2025. HC held that consideration for the resale/use of computer software through EULAs (End User Licence Agreement) /distribution agreement is not Royalty for the use of copyright of the computer software and hence doesn’t give rise to any taxable income in India. Hence, TDS under section 195 not deductible.
B. GST
Extension of GSTR-3B due date in few districts of Maharashtra: In view of the natural calamity caused by heavy rains, the due date of GSTR-3B for the July-2025 tax period has been extended from 20th August, 2025 to 27th August, 2025 for Mumbai (City), Mumbai (sub-urban), Thane, Raigad and Palghar districts of Maharashtra.
(Link: CGST Notification 12/2025 Dated 20/08/2025, GSTN Advisory Dated 21/08/2025)
GST Council 56th Meeting scheduled for Sept 2025: The GST Council has announced its 56th meeting, scheduled to take place on 3rd and 4th September 2025, in New Delhi. The Officers Meeting will precede the main event on 2nd September 2025. All three meetings are scheduled to begin at 11 AM.
(Link: GST Council OM Dated 22/08/2025)
SC upholds mandatory pre-deposit for appeals: Case of Triveni Engineers vs Assessing Authority CT and GST, SC Judgement Dated 4th August 2025. The apex court upheld the dismissal of appeal due to the appellant failure to comply with the mandatory pre-deposit requirement. The Petitioner had filed an appeal against an assessment order but had failed to deposit the mandated 20% of the disputed tax as required under GST Act.
C. Central Excise
SC, Pre-Deposit mandatory for Excise appeal, Financial hardship no excuse: Case of Altafhusen Mayuddin Khatri vs Union of India, SC Judgement Dated 8th August 2025. The apex court held that Pre-Deposit is must to file appeal and financial hardship cannot be a valid reason to waive or reduce mandatory pre-deposit required for filing an appeal.
D. Custom Duty
Exemption to Cotton Imports from Customs Duty: The notification provides exemption on the import of cotton until 30th September 2025. It exempts all forms of cotton falling under heading 5201 of the First Schedule to the Customs Tariff Act, from the full customs duty and the Agriculture Infrastructure and Development Cess (AIDC).
(Link: Customs Notification 35/2025 (T) Dated 18/08/2025)
Extension of Anti-Dumping Duty on Fluoroelastomers (FKM) Imports: The notification extends the anti-dumping duty on imports of Fluoroelastomers (FKM) from China until 26th February 2026. The review process is underway.
(Link: Customs Notification 29/2025 (T) Dated 19/08/2025)
Extension of Anti-Dumping Duty on Toluene Di-isocyanate (TDI) Imports: The notification extends the anti- dumping duty on Toluene Di-isocyanate (TDI) imports from the European Union and Saudi Arabia until 1st March 2026. The review process is underway.
(Link: Customs Notification 28/2025 (ADD) Dated 19/08/2025)
SC sets aside redemption fine for No breach of Bonded Warehouse Licence conditions: Case of Commissioner of Customs vs Ganesh Benzoplast Limited, SC Judgement Dated 14th August 2025. The Revenue had alleged violations, including the storage of non-bonded goods, non-reporting of expired bonds, and a lack of proper audit trails. However, the CESTAT had previously set aside these penalties, noting that all of the company’s actions were conducted with explicit permissions from customs authorities and under their supervision. The Bombay High Court affirmed the same, stating that no substantial question of law existed to challenge the CESTAT’s factual findings. SC affirmed the judgments, reinforcing that penalties and fines cannot be imposed when a company operates in accordance with permissions granted by the very authority.
E. Directorate General of Foreign Trade (DGFT)
Amendment in Diamond Import Authorization policy: Directorate General of Foreign Trade (DGFT) has issued a notification amending the Foreign Trade Policy (FTP) to modify regulations for the Diamond Imprest Authorization. The amended rules provide that, exporters applying for the authorization can now submit a Chartered Accountant’s certificate if their latest Income Tax Return (ITR) is not yet finalized, provided they submit proof of the ITR by 31st December of the application year. It also removes the exemption from Integrated Tax and Compensation Cess for imports under this authorization. Imports will continue to be exempt from various other duties, including Basic Customs Duty and Anti-dumping Duty.
(Link: DGFT Notification 25/2025 Dated 19/08/2025)
Amendment in Import Policy condition, imposes minimum price on paper board imports: The notification imposes a Minimum Import Price (MIP) of INR 67,220 per metric ton on the Cost, Insurance, and Freight (CIF) value for the import of Virgin Multi-layer Paper Board (VPB). It applies to specific HS codes within Chapter 48, including 48059100, 48059200, 48059300, 48109200, and 48109900. This import condition will remain in effect until 31st March 2026.
(Link: DGFT Notification 26/2025 Dated 22/08/2025)
Amendment of Minimum Export Price (MEP) on export of Honey: The Minimum Export Price (MEP) on export of Natural Honey is revised from USD 2000 Per Metric Tonne to USD 1400 Per Metric Tonne till 31st December 2025.
(Link: DGFT Notification 27/2025 Dated 22/08/2025)
F. Securities and Exchange Board of India (SEBI)
Extension of timeline for Margin Pledge System implementation: The circular regarding ‘Margin obligations to be given by way of pledge/Re- pledge in the Depository System’, has a new implementation date of 10th October 2025. The depositories i.e. CDSL and NSDL, have requested for the extension of timeline to complete system developments, conduct thorough end- to-end testing, and ensure a seamless transition for all market participants and investors.
(Link: SEBI Circular Dated 18/08/2025)
Consultation Paper on implementation of eligibility criteria for derivatives on Non-Benchmark Indices: In a new consultation paper, SEBI and stock exchanges are seeking public feedback on how to implement new eligibility criteria for derivatives on non- benchmark indices. The existing criteria, require a minimum of 14 constituents, with the top constituent’s weight at 20% or less and the top three combined at 45% or less. This paper evaluates two primary approaches: creating new indices that meet the criteria (Alternative A) or adjusting the constituent structure and weights of existing indices (Alternative B). While some passive funds track existing indices like the Nifty Bank and Nifty Financial Services, market participants, including NSE, favour Alternative B to preserve liquidity and avoid investor confusion. It proposes a phased “glide path” for implementation, especially for indices with significant assets under management (AUM) like the Nifty Bank, to ensure an orderly transition and minimize market disruption. The comments/ feedback from stakeholders are invited.
(SEBI Consultation Paper Dated 18/08/2025)
Consultation Paper, Review of requirement of Minimum Public Offer and timelines to comply with Minimum Public Shareholding: The proposal, aims to make it easier for large companies, particularly those with a post-issue market capitalization exceeding Rs 50,000 crore to list in India. The current regulations, which require substantial equity dilution, can be a deterrent for large issuers as the market may find it challenging to absorb such large public issues. It proposes to introduce new MPO thresholds and extend the timeline for achieving MPS compliance. For issuers with a market cap between Rs 50,000 crore and Rs 1 lakh crore, the MPO would be ₹1,000 crore and at least 8% of the post-issue share capital, with the MPS timeline extended to 5 years. For companies with a market cap above ₹1 lakh crore, the MPO and MPS timelines would be further relaxed. The consultation paper also proposes to retain the 35% retail quota in IPO allocations. The comments/ feedback from stakeholders are invited.
(SEBI Consultation Paper Dated 18/08/2025)
Consultation Paper on review of block deal framework: A block deal is used to execute large trades through a single transaction without putting either the buyer or seller in a disadvantageous position. For such trades, stock exchanges are permitted to provide a separate trading window. It is proposed to increase the minimum block deal size to 25 crore rupees from the current 10 crore rupees. It also proposes changes to the price band of block trades for non-derivatives stocks, widening it to 3% on either side of the stock’s reference price from the current 1%. It proposed to retain the 1% price band for futures and options stocks. The regulator proposed to keep two windows for such deals – the morning session 8:45 a.m. IST to 9:00 a.m. IST, and the afternoon session 2:05 p.m. IST to to 2:20 p.m. IST. The comments/ feedback from stakeholders are invited.
(SEBI Consultation Paper Dated 22/08/2025)
Consultation Paper on Introduction of Closing Auction Session in the Equity Cash Segment: SEBI has proposed a new framework for the Closing Auction Session (CAS) in the equity cash market, starting with highly liquid derivative stocks to determine the closing prices of shares. The CAS would be applied in a phased manner, beginning with stocks available in the derivatives segment, those with sufficient liquidity, and later extended to all stocks based on experience gained. The session will be held separately for 20 minutes, from 3:15 pm to 3:35 pm. To maintain orderly trading, CAS will operate within a 3% up or down band of the reference price, determined using VWAP of trades between 3 pm and 3:15 pm. The comments/ feedback from stakeholders are invited.
(SEBI Consultation Paper Dated 22/08/2025)
G. Ministry of Corporate Affairs (MCA)
Amendment to Companies Indian Accounting Standards Rules: The changes include revised application of Ind AS 101 for first-time adopters regarding lease classification. Ind AS 107 and Ind AS 7 include new disclosure requirements for supplier finance arrangements, allowing user to assess their impact on liabilities and cash flows. Ind AS 1 now contains refined criteria for classifying liabilities as current or non-current, specifically addressing the effect of covenants and the right to defer settlement. The amendments to Ind AS 12 introduce an exception for deferred tax related to Pillar Two income taxes from global tax reform and mandate new disclosures about a company’s exposure to this tax.
(Link: MCA Notification Dated 13/08/2025)
H. Insolvency and Bankruptcy Board of India (IBBI)
NCLAT, Order set aside as reasonable and sufficient opportunity as required under NCLT Rules not granted: Case of Calcutta Cricket & Football Club vs Karan Sigh Grewal, NCLAT Delhi Judgement Dated 8th August 2025. The appellate tribunal held that NCLT order deserved to be set aside since it is unreasoned order, and further the reasonable and sufficient opportunity has not been granted as envisaged in Rule 37 of NCLT Rules (Deals with notice to opposite party), and hence the same is in violation of principles of natural justice.
NCLAT, Application by financial creditor under IBC maintainable for any default subsequent to section 10A period: Case of Mani Gupta vs HDFC Bank Ltd, NCLAT Delhi Judgement Dated 4th August 2025. The appellate tribunal held that application under section 7 (Initiation of corporate insolvency resolution process by financial creditor) of the Insolvency and Bankruptcy Code is duly admissible since default occurred subsequent to section 10A (Suspension of initiation of corporate insolvency resolution process) period. Accordingly, order upheld and appeal dismissed.
NCLAT allows CIRP withdrawal amidst revival efforts: Case of Udit Harish Seth vs Bank of Baroda, NCLAT Delhi Judgement Dated 11th July 2025. The appellant tribunal has permitted the withdrawal of Corporate Insolvency Resolution Process (CIRP) proceedings against M/s SE Transstadia Pvt. Ltd., acknowledging a government backed revival plan and the consensus among financial creditors. Thus, it halts the insolvency process initiated by the Bank of Baroda.
NCLAT dismisses appeal against CIRP admission, allows settlement via Section 12A: Case of Lal Chand Morani vs Satyendra Prasad Khamia, NCLAT Delhi Judgement Dated 2nd July 2025. The appellant tribunal has dismissed an appeal filed by petitioner against an order that initiated the Corporate Insolvency Resolution Process (CIRP) against him. The tribunal, however, advised the appellant to seek a withdrawal of the insolvency proceedings by filing an application under Section 12A (Withdrawal of application admitted under section 7, 9 0r 10) of the Insolvency and Bankruptcy Code.
NCLAT vacates status quo, upholds corporate debtor’s right to replace voluntary liquidator: Case of Vinod Singh vs Chandra Prakash Jain, NCLAT Delhi Judgement Dated 30th May 2025. The appellate tribunal decisively settled the scope of judicial intervention under Section 59 (Voluntary liquidation of corporate persons) of the Insolvency and Bankruptcy Code. It held that once a corporate debtor has lawfully replaced a voluntary liquidator through a board resolution and shareholder approval, the Adjudicating Authority (NCLT) cannot impose a status quo order to retain the ousted liquidator. It held that the NCLT intervention was without jurisdiction and violative of the regulatory framework which confers full control of liquidator appointments and removals upon the corporate debtor itself.
IBBI suspended RP Chandra Prakash Jain for filing liquidation without compliance of CIRP Regulations: The DC noted that, RP failed to place statutory requirements before the CoC despite the CoC’s decision to liquidate the Corporate Debtor. It ordered suspension of authorisation for assignments for six months.
(Link: IBBI DC Order Dated 20/08/2025)
I. Reserve Bank of India (RBI)
Draft circular on Counterparty Credit Risk- Add-on factors for computation of Potential Future Exposure: Extant instructions on capital adequacy for banks prescribe the Current Exposure Method (CEM) for computation of Counterparty Credit Risk (CCR). The instructions have been reviewed to (i) clarify that banks acting as clearing members of SEBI recognised stock exchanges in the equity derivatives and commodity derivatives segments are required to maintain capital charge for CCR, and (ii) largely align the add-on factors for calculation of Potential Future Exposure (PFE) in the CEM for ‘Interest Rate Contracts’ and ‘Exchange Rate Contracts and Gold’ with the Basel Committee on Banking Supervision (BCBS) guidelines.
(Link: RBI Press Release Dated 20/08/2025)
J. Miscellaneous
EPFO hikes death relief fund ex-Gratia to Rs 15 lakh: The Employees’ Provident Fund Organisation (EPFO) has raised the ex-gratia amount under the Death Relief Fund for Central Board employees from Rs 8.8 lakh to Rs 15 lakh, effective from April 1, 2025. This amount will be provided to the nominee or legal heirs of employees who die while in service and will be disbursed from the Staff Welfare Fund. Further, this ex-gratia amount shall be increased by 5% every year starting from 1st April 2026.
(Link: EPFO Circular Dated 19/08/2025)
SC, MSME must notify lending bank about eligibility to get benefit of framework: Case of Shri Swami Samarth Construction & Finance Solutions vs Board of Directors of NKGSB Coop Bank Ltd, , SC Judgement Dated 28th July 2025. The apex court held that Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises does require MSME to notify the lending bank by producing authenticated and verifiable documents/material to show its eligibility to get the benefit of the said Framework.
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Compiled by:- CMA Yash Paul Bhola, MBA, FCMA. Former Director (Finance), National Fertilizers Limited.
Disclaimer: The contents of this article are for informational purposes only. The user may refer to the relevant notification/ circular/ decisions issued by the respective authorities for specific interpretation and compliances related to a particular subject matter)
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