Weekly Round-up on Tax and Corporate Laws | 18th to 23rd Aug 2025

This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from Aug 18th to Aug 23rd, 2025, namely:

1. The Promotion and Regulation of Online Gaming Act, 2025: All You Need to Know;
2. CBDT notifies monetary limits for salary under section 17(2)(iii) & tax free medical treatment abroad;
3. No bar under section 6(2)(b) if GST proceedings by two authorities are for distinct infractions even if liability/deficiency similar: SC;
4. Prime Minister underscored the importance of next-generation GST reforms to benefit all sections of society;
5. Demand of GST from landowner citing non-registration of JDA unsustainable if GST on entire property collected from developer: HC; and
6. MCA notifies Ind AS amendments 2025 with key updates on supplier finance, liability classification & Pillar Two taxes

1. The Promotion and Regulation of Online Gaming Act, 2025: All You Need to Know;

India’s online gaming sector has grown rapidly in recent years, driven by low-cost internet, widespread smartphone usage, and increasing digital participation. While e-sports and educational games provide opportunities for innovation, skill development, and employment, the unchecked rise of online money gaming has created serious challenges.

To address this, ‘The Promotion and Regulation of Online Gaming Act, 2025’ (‘Act’) has been enacted to create a structured legal framework for India’s gaming industry. The Bill was introduced and passed in the Lok Sabha on 20-08-2025 and later cleared by the Rajya Sabha on 21-08-2025. the Bill received the assent of the Hon’ble President on 22-08-2025, thereby becoming law. The Act takes a dual approach: on one hand, it promotes and develops legitimate sectors like e-sports and social gaming; on the other, it imposes a complete prohibition on online money games to safeguard citizens.

1.1 Key Provisions of the Act

Some of the key provisions of the Online Gaming Act are as follows-

• Two-Sided Approach: Promote and Prohibit
  The Act is not a blanket ban but a strategic framework for online gaming. It promotes growth in creative and skill-based games, supporting innovation, jobs and the economy. Simultaneously, it strictly prohibits online money games to protect public health and financial security. This dual approach builds a responsible digital environment while supporting economic and technological growth.
• A Law with Nationwide Scope and Global Reach
  The law extends to the whole of India, ensuring a uniform national policy. The regulations also cover online money gaming services accessible to people within India, even if the operator is based overseas. This measure aims to plug loopholes exploited by offshore operators and address enforcement challenges faced by the Indian authorities.
• Categories in the Online Gaming Landscape
  The Act establishes three distinct definitions for online games –
  a) E-Sports: Esports means an online game played as part of multi-sport events through organised competitions between individuals or teams in multiplayer formats with predefined rules.
  (b) Online Social Games: A game played for entertainment or skill development that may require a subscription or one-time fee for access but does not involve staking money with the expectation of monetary gain.
  (c) Online Money Games: This is broadly defined as any online game where a user pays or stakes money with the expectation of winning a monetary return, explicitly including games based on skill, chance, or both.
• Support for Social and Educational Games
  The Act encourages the development and availability of online social games for recreational and educational purposes. The government will create mechanisms for registering these games to ensure they are safe and appropriate for users. The Government will also undertake awareness programs to highlight the positive uses of these games for skill development and digital literacy.
• Complete Ban on Online Money Games
  The Act places a strict and unambiguous ban on online money games. It prohibits any person from offering, aiding, abetting, or engaging in the business of providing online money games or their related services. This measure directly addresses the social, financial, and public health harms linked to these platforms.
• Prohibition on Advertising of Money Gaming
  To curb the influence of money gaming platforms, the Act prohibits advertisements promoting them across all media, including digital and electronic channels. The ban also covers aggressive campaigns that rely on celebrity or influencer endorsements. The goal is to reduce the visibility and appeal of these games, protecting youth and vulnerable groups from being induced to play.
• Cutting off the money flow from banks and FIs to illegal gaming platforms
  A key enforcement strategy in the Act is to disrupt the financial operations of illegal gaming platforms. It prohibits banks, financial institutions, and payment facilitators from processing or authorizing transactions linked to online money games.
• Introducing a New ‘Watchdog’ for Online Gaming
  The Act proposes the establishment of a central “Authority” to oversee and regulate online gaming. This new regulatory body will be empowered to recognize, categorize, and register legitimate online games like e-sports and social games.
• Power to block Websites and Apps
  The Central Government is granted the authority to take down illegal gaming platforms swiftly. In the event of non-compliance with the prohibitions, any information related to an online money gaming service that is generated, transmitted, or hosted on any computer resource is liable to be blocked for public access. This power, aligned with Section 69A of the Information Technology Act, 2000, allows the government to effectively remove offending websites and applications from the internet in India.
• Protecting the Youth and Vulnerable Groups
  At its core, the Act is a measure for public and consumer protection. A primary stated objective is to shield individuals, particularly the youth and other vulnerable groups, from the adverse social, economic, and psychological impacts of online money games. The legislation responds to rising concerns over financial ruin, compulsive behavior, and mental health issues linked to these platforms, with the aim of ensuring a safer and more responsible digital environment for all citizens.

1.2 Conclusion

The key highlights of the Act signify not only a ban on money gaming but also a balanced push to promote e-sports and social games, making a future-focused approach to the gaming industry. What stands out is the attempt to separate harmful practices from innovative opportunities. The real challenge will be in ensuring strong enforcement against offshore operators and rapidly evolving platforms.

Download The Promotion and Regulation of Online Gaming Act, 2025

2. CBDT notifies monetary limits for salary under section 17(2)(iii) & tax free medical treatment abroad

When an employer provides certain benefits or amenities to its employees, the value of such benefits or amenities is taxable as a perquisite only in the hands of specified employees as per Section 17(2)(iii) of the Income-tax Act. For the purpose of this provision, the following employees are treated as specified employees:

• An employee who is also a director of the company.
• An employee who has a substantial interest in the company; and
• An employee whose monetary income under the head ‘salaries’ exceeds Rs. 50,000.

Further, as per clause (vi) of the first proviso to Section 17(2), expenses incurred by an employer on the medical treatment of an employee or any of his family members outside India are taxable as a perquisite, subject to certain conditions. The cost of travel for the employee, his family member, or an attendant accompanying the patient for treatment outside India is taxable as a perquisite if the employee’s gross total income (excluding the travel expenditure) exceeded Rs. 2,00,000.

The Finance Act, 2025, has removed the above fixed threshold limits of Rs. 50,000 and Rs. 2,00,000 and empowered the CBDT to prescribe the threshold limit taking into account changes in the standard of living and economic conditions
The Central Board of Direct Taxes (CBDT) has amended the Income Tax Rules, 1962, to notify the threshold limits. The Board has inserted two new Rules, 3C and 3D, into the Rules.

Rule 3C provides that for the purposes of item (c) of section 17(2)(iii), the prescribed income under the head “Salaries” shall be Rs. 4,00,000. Thus, an employee whose monetary income under the head ‘salaries’ exceeds Rs. 4,00,000 shall be treated as ‘specified employee’ for the purpose of Section 17(2)(iii).

Further, Rule 3D provides that for the purposes of Proviso to section 17(2)(vi), the prescribed gross total income shall be Rs. 8,00,000.

Read the Notification

3. No bar u/s 6(2)(b) if GST proceedings by two authorities are for distinct infractions even if liability/deficiency similar: SC

The Hon’ble Supreme Court held that the bar under Section 6(2)(b) operates only where two proceedings relate to the same subject matter, meaning identical liability, deficiency or obligation arising from the same contravention. It held that proceedings for distinct infractions are permissible even if the resulting liability or deficiency appears similar.

3.1 Facts

The Petitioner, being the assessee, challenged the applicability of Section 6(2)(b) of the CGST Act and equivalent State GST provisions, which bar the ‘initiation of any proceedings’ on the ‘same subject matter’ where proceedings by one authority are already underway. The facts reveal that two departmental proceedings were initiated against the assessee, potentially overlapping in assessing or recovering similar tax liability, deficiency, or obligation. The assessee contended that the bar under Section 6(2)(b) should prevent the second authority from proceeding, asserting that the tax or liability was effectively the same. The Department clarified that the proceedings concerned distinct contraventions, and that actions such as issuance of summons, searches, or seizures do not amount to ‘initiation of proceedings’ under the statute. The matter was accordingly placed before the Supreme Court.

3.2 Held

The Hon’ble Supreme Court held that the bar under Section 6(2)(b) is triggered only when two proceedings pertain to the same subject matter, meaning identical liability, deficiency, or obligation arising from the same contravention. The Court emphasised that formal adjudicatory proceedings commence solely upon issuance of a show cause notice, while intelligence-based enforcement actions, summons, search, or seizure do not constitute initiation of proceedings. Consequently, where two proceedings relate to distinct infractions, the bar does not apply, even if the tax liability or deficiency is similar. The Court also articulated a clear two-fold test for determining ‘same subject matter’ whether an authority has already proceeded on an identical liability or offence based on the same facts, and whether the demand or relief sought is identical. Accordingly, the Supreme Court held that parallel proceedings for distinct contraventions are permissible, and the bar under Section 6(2)(b) does not preclude such action even if the resulting liability is the same.

Read the Ruling

4. Prime Minister underscored the importance of next-generation GST reforms to benefit all sections of society

Marking the 79th Independence Day, the Prime Minister outlined the next phase of GST reforms aimed at structural corrections, rate rationalisation, and ease of living. The agenda emphasises fixing inverted duty structures, shifting towards dual slabs, reducing tax on essentials, and advancing digital measures such as pre-filled returns and automated refunds. This was stated in Press Release Dated 15-08-2025.

4.1 About the Update

On the occasion of the 79th Independence Day, the Prime Minister reaffirmed the pivotal role of GST as a landmark reform and outlined the roadmap for its next phase of evolution. The Government’s reform agenda is anchored on three core areas: structural reforms, rate rationalisation, and ease of living. Structural reforms will focus on correcting inverted duty structures to minimise input tax credit accumulation, addressing classification disputes to ensure consistency and reduce litigation, and providing long-term stability in tax rates to enhance business certainty and planning.

The rate rationalisation proposals envisage reducing tax incidence on essential and aspirational goods to boost affordability and consumption, moving towards a simplified dual slab system, and making efficient use of fiscal space following the conclusion of the compensation cess. Under the ease of living agenda, measures will target seamless digital registration processes, introduction of pre-filled returns to reduce errors, and accelerated automated refunds to support exporters and businesses affected by inverted duty structures. These proposals have been referred to the Group of Ministers for detailed examination and will be taken up by the GST Council, with the Centre committed to working with States in the spirit of cooperative federalism to ensure timely adoption and implementation within the current fiscal year.

Read the News

5. Demand of GST from landowner citing non-registration of JDA unsustainable if GST on entire property collected from developer: HC

The High Court held that demand of GST from a landowner is unsustainable where the developer has already discharged tax on the entire property under a joint development agreement. It held that a further levy would amount to double taxation, and the authority was estopped after accepting tax from the developer.

5.1 Facts

The petitioner, a landowner, had entered into a joint development agreement with a developer for construction of residential high-rise apartments. Construction services provided by the developer were subjected to GST, and pursuant to adjudication, the developer discharged the entire liability in respect of the entire property, which included the petitioner’s share under the agreement. Subsequently, the jurisdictional authority demanded GST from the petitioner, contending that since the joint development agreement was an unregistered document, it could not be made the basis to exempt the petitioner from liability and that the petitioner was independently liable to discharge GST on his share. The petitioner submitted that the entire tax had already been collected from the developer, including in respect of his share, and therefore a further demand against him would amount to double taxation. The matter was accordingly placed before the High Court of Karnataka.

5.2 Held

The High Court held that the demand of GST from the petitioner was unsustainable, as it would result in double taxation when the developer had already discharged the entire tax liability on the whole property, including the petitioner’s share. It observed that the Deputy Commissioner (Audit) had earlier recognized and acted upon the joint development agreement for the purpose of concluding that the developer was liable, and had accepted tax payment from the developer. In such circumstances, the jurisdictional authority was estopped from taking a contrary view that the unregistered nature of the agreement disentitled the petitioner from exemption. The Court quashed the impugned order, holding that once tax is collected from the developer on the entire property, a further demand from the landowner cannot be sustained.

Read the ruling

6. MCA notifies Ind AS amendments 2025 with key updates on supplier finance, liability classification & Pillar Two taxes

On 13 August 2025, the Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2025, introducing important changes to several Indian Accounting Standards (Ind AS). These amendments aim to improve transparency, promote alignment with global financial reporting practices, and enhance the quality of disclosures in financial statements. Most of the changes will be effective from 1 April 2025, with a few applicable from 1 April 2026.

One of the key amendments is to Ind AS 1, Presentation of Financial Statements which provides greater clarity on the classification of liabilities as current or non-current, especially in situations where the right to defer settlement depends on compliance with loan covenants. The treatment of breaches and grace periods has also been clarified. These amendments take effect from 1 April 2025, while the additional disclosure requirements relating to covenants will apply from 1 April 2026.

Changes to Ind AS 7, Statement of Cash Flows and Ind AS 107, Financial Instruments: Disclosures introduce new disclosure requirements for supplier finance arrangements, such as supply chain financing, payables financing or reverse factoring. These are intended to improve the visibility of how such arrangements affect an entity’s liabilities, cash flows, and liquidity risk. These disclosures are applicable prospectively from 1 April 2025.

A significant update to Ind AS 12, Income Taxes incorporates guidance on the OECD’s (Organisation for Economic Cooperation and Development) Pillar Two global minimum tax rules. Entities are now required to apply a mandatory exception for recognizing deferred tax assets and liabilities arising from such rules. This amendment, aimed at enhancing transparency in global tax reporting, is applicable retrospectively from 1 April 2025.

Further, Ind AS 101, First-time Adoption of India Accounting Standards has been amended to provide transition relief for first-time adopters of Ind AS in relation to lease accounting under Ind AS 116. This is also effective retrospectively from 1 April 2025, offering practical ease during the initial adoption phase.

Lastly, technical and editorial revisions have been made to Ind AS 108, 109, 115, 116, 28, and 32 to align them more closely with the corresponding IFRS standards. These changes are intended to support comparability and consistency in reporting and are effective from 1 April 2025.

Overall, these amendments represent a move toward strengthening India’s financial reporting framework by aligning it with evolving international practices and improving the clarity and usefulness of financial disclosures.

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