Weekly Round-up on Tax and Corporate Laws | 8th to 13th September 2025

This weekly newsletter analytically summarises the key stories reported at taxmann.com during the previous week from 8th to 13th September, 2025.

1. CBDT cautions taxpayers on reduced time limit for filing TDS/TCS corrections from 01-04-2026 under Income Tax Act 2025;
2. Key Highlights of the SEBI’s 211th Board Meeting: What Investors, Companies, and Intermediaries Should Know;
3. SLP dismissed against HC ruling that services to foreign universities for student referrals qualified as export, GST refund allowed;
4. GSTN issues advisory on filing pending GST returns before expiry of three-years; and
5. Revenue recognition for construction contracts involving variable consideration under the Ind AS framework. 

1. CBDT cautions taxpayers on reduced time limit for filing TDS/TCS corrections from 01-04-2026 under Income Tax Act 2025

Section 200 of the Income Tax Act, 1961, prescribes the duties of a person responsible for deducting tax under Chapter XVII-B. Sub-section (3) mandates that, after depositing the tax deducted to the credit of the Central Government, the deductor must prepare a statement of the TDS deducted and furnish it to the prescribed authority within the prescribed time.

The proviso to Section 200 allows the deductor to file a correction statement with the prescribed authority for rectifying errors or for adding, deleting, or updating information in the original statement. A corresponding framework exists under Section 206C for tax collection at source (TCS).

Earlier, while there was a prescribed time limit for furnishing TDS/TCS statements, no such limit existed for furnishing correction statements. This led to the possibility of indefinite revisions, creating scope for misuse and practical hardship for deductees/collectees.

To address this, the Finance (No. 2) Act, 2024, effective from 01-04-2025, amended Sections 200 and 206C to provide that no correction statement may be filed after 6 years from the end of the financial year in which the original TDS/TCS statement was to be furnished.

The Income Tax Act 2025 has curtailed the time limit for filing TDS/TCS correction statements from 6 years to 2 years. Section 397(3)(f) of the Income Tax Act 2025 provides that the deductee or collectee may file a correction statement within 2 years from the end of the tax year in which the original statement was due.

To alert taxpayers about the reduced time limit, the Central Board of Direct Taxes has issued a statement that the correction statements for FY 2018-19 (Qtr. 4), FY 2019-20 to FY 2022-23 (Qtr. 1 to Qtr. 4), and FY 2023-24 (Qtr. 1 to Qtr. 3) will be accepted only up to 31st March 2026. After 31.03.2026, such statements shall be time-barred and will not be entertained from 01.04.2026 onwards.

Read the News

2. Key Highlights of the SEBI’s 211th Board Meeting: What Investors, Companies, and Intermediaries Should Know

The SEBI Board held its 211th meeting in Mumbai and approved several important measures with a strong focus on ease of doing business, inclusivity in capital markets, and investor protection. The key proposals cut across IPO norms, related party transactions, alternative investment funds, investor access, and mutual fund reforms.  

The key highlights of the meeting are: 

(a) Anchor Investor Norms Widened to Attract Stronger Institutional Participation 

Currently, anchor investor allocation is restricted mainly to domestic mutual funds. The Board has approved widening of this framework: 

• • Category I and II anchor allotments have been merged into a single category for allocations up to Rs. 250 crore, with 5–15 investors and a minimum Rs. 5 crore per allottee. 
  • For allocations up to Rs. 250 crore, 5–15 anchor investors will be allowed with a minimum Rs. 5 crore each. Beyond Rs. 250 crore, an additional 15 investors may be permitted for every Rs. 250 crore or part thereof.
  • Life Insurance Companies and Pension Funds will now be included in the reserved anchor portion along with mutual funds.
  • Overall anchor reservation has been increased from one-third to 40%. 

This is expected to strengthen participation of long-term institutions, diversify anchor books and align with global best practice. 

(b) RPTs Framework Streamlined with Scale-Based Thresholds and Clearer Provisions 

Amendments to the LODR Regulations and related circulars have been approved to ease compliance on Related Party Transactions (RPTs) while maintaining investor protection. Scale-based thresholds, linked to consolidated turnover, will now determine material RPTs requiring shareholder approval. Thresholds for Audit Committee approval of RPTs by subsidiaries have also been revised, with separate provisions where audited financials are not available. 

Disclosure norms have been simplified for smaller RPTs (not exceeding 1% of turnover or Rs. 10 crore). Provisions on omnibus approvals by shareholders have been aligned with those for the Audit Committee and incorporated directly into LODR. Further, exemptions for retail purchases by directors, KMPs and their relatives have been clarified, and the term “holding company” is now expressly defined to mean ‘listed holding company’. 

(c) Accredited Investor Framework Expanded with Flexibilities for AIFs and LVFs 

A separate category of Accredited Investor–only AIF schemes has been introduced, limited exclusively to accredited investors and given regulatory flexibilities with lighter compliance. Existing eligible AIF schemes may also opt into Accredited Investor–only or Large Value Fund (LVF) classification. 

Accreditation is recognised as a more reliable measure of investor sophistication than minimum commitment thresholds. To enable smooth transition, existing norms will continue alongside the new Accredited Investor–only schemes, which will enjoy relaxations such as exemption from pari-passu treatment, longer tenure up to 5 years, and no cap on accredited investors. 

For Large Value Funds, further relaxations have been approved, including exemption from PPM template and audits, along with a reduction in the minimum investment threshold from Rs. 70 crore to Rs. 25 crore. 

(d) Mutual Fund Framework Revamped to Boost Investor Protection and Inclusion 

To strengthen investor protection and promote financial inclusion, the Board has approved changes in the Mutual Fund framework. The maximum exit load has been reduced from 5% to 3%, aligning with prevailing industry practice while retaining flexibility for schemes with less liquid securities. 

The distributor incentive structure for B-30 cities has been revised to cover only new individual investors (new PAN), capped at 1% of investment in the first year, subject to a maximum of Rs. 2,000. In addition, a new incentive has been introduced for onboarding women investors, on similar lines as the B-30 incentive. 

(e) New Digital Gateway Introduced to Ease FPI Entry into Indian Markets 

A new website, ‘India Market Access’ (www.indiamarketaccess.in), has been launched as a dedicated digital platform for existing and prospective Foreign Portfolio Investors (FPIs). The portal addresses long-standing challenges faced by FPIs in navigating India’s regulatory landscape, where information was earlier scattered across multiple regulations and institutions.  

Developed jointly by India’s Market Infrastructure Institutions (NSE, BSE, ICCL, NSE Clearing, CDSL and NSDL) under SEBI’s guidance, the website acts as a single-window gateway providing step-by-step guidance on FPI registration, documentation requirements, applicable SEBI and RBI regulations, taxation and repatriation procedures, and details on the roles of key market participants.  

Read the Press Release

3. SLP dismissed against HC ruling that services to foreign universities for student referrals qualified as export, GST refund allowed

The Hon’ble Supreme Court held that services rendered by the assessee to foreign universities for student referrals constituted export of services and refund of GST was admissible. It held that the foreign university was the recipient, not the students. This was held in Union of India v. KC Overseas Education (P.) Ltd. [2025]. 

Facts of the case

The petitioner, under agreements with foreign universities, was engaged in recommending students for enrollment, for which consideration was received directly from those universities in foreign currency. The petitioner submitted that these activities constituted export of services within the meaning of Section 2(6) of the IGST Act, since the services were provided to recipients located outside India, the consideration was received in convertible foreign exchange, and the place of supply was outside India. It was contended that in terms of Section 2(93) of the CGST Act read with Section 13(2) of the IGST Act, the recipient of service was the foreign university, which was liable to pay consideration, and the petitioner was not an intermediary within the meaning of Section 2(13) of the IGST Act. The petitioner, therefore, claimed entitlement to a refund of GST paid on the consideration received from such universities, and the matter was carried before the High Court. 

High Court Held

The High Court held that Section 2(6) of the IGST Act, defining ‘export of services’ must be read as an integrated whole, and that the decisive factors were that the place of supply was outside India and the recipient was the foreign university liable to pay consideration under Section 2(93) of the CGST Act. It was observed that the petitioner was not rendering services to students in India and did not fall within the definition of ‘intermediary’ under Section 2(13) of the IGST Act. Consequently, it was held that the services constituted export of services and the petitioner was eligible for a refund of GST under Section 54 of the CGST Act and the Maharashtra GST Act. The Supreme Court, relying on its earlier pronouncements in Commissioner of Service Tax III, Mumbai v. Vodafone India Ltd. and Commissioner, Central Excise, CGST-Delhi South Commissionerate v. Blackberry India Pvt. Ltd., dismissed the special leave petition against the High Court’s ruling. 

Read the Ruling

4. GSTN issues advisory on filing pending GST returns before expiry of three-years

The GSTN has issued an advisory directing taxpayers to file all pending GST returns within three years from their respective due dates. It stated that from 01-10-2025, the portal will permanently block filing of returns older than three years under Sections 37, 39, 44 and 52. This was stated in GSTN Advisory, Dated 09-09-2025. 

About the Update 

The GSTN has issued an advisory stating that, in accordance with the Finance Act, 2023 and Notification No. 28/2023 – Central Tax, dated 31-07-2023, GST returns cannot be filed once a period of three years has elapsed from their respective due dates under Sections 37, 39, 44 and 52. This restriction covers GSTR-1, GSTR-1A, GSTR-3B, GSTR-4, GSTR-5, GSTR-5A, GSTR-6, GSTR-7, GSTR-8 and GSTR-9/9C, and will be implemented on the GST portal beginning with the September 2025 tax period. 

With effect from 01-10-2025, filing of any return where the due date is older than three years will be permanently barred.

Read the advisory

5. Revenue recognition for construction contracts involving variable consideration under the Ind AS framework

Construction contracts frequently include both fixed payments and variable elements, such as performance incentives linked to milestones. While these arrangements allow contractors to benefit from early completion or superior performance, they also introduce uncertainty in determining when revenue should be recognised. Ind AS 115, Revenue from Contracts with Customers, lays down specific principles to ensure recognition reflects both progress on the contract and the likelihood of realising contingent consideration. 

Ind AS 115 requires that when a performance obligation is satisfied over time, revenue should be recognised based on progress towards completion. The transaction price may include fixed and variable consideration. Variable consideration, such as performance bonuses, must be estimated using the expected value or most likely amount. However, such amounts are included only when it is highly probable that no significant reversal of revenue will occur. At each reporting date, estimates are updated to reflect current circumstances. 

For example, a company entered into a four-year contract to construct a bridge for Rs. 100 crore, with a Rs. 20 crore performance bonus if 90% completion is achieved by the end of year three. In the first year, only 20% progress was achieved, and the milestone was uncertain, so only Rs. 20 crore was recognised. By year two, with 60% progress and the milestone considered probable, the transaction price was revised to Rs. 120 crore, and cumulative revenue of Rs. 72 crore was recognised. In year three, the 90% milestone was met, confirming entitlement to the bonus, resulting in cumulative revenue of Rs. 108 crore. In the final year, the remaining Rs. 12 crore was recognised, bringing total revenue to Rs. 120 crore. 

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