GSTN Releases Fresh FAQs on GSTR-9/9C for FY 2024-25 – What You Must Know

FAQs on GSTR-9/9C for FY 2024–25

Issued on: 4 December 2025

GSTN has released an additional set of Frequently Asked Questions (FAQs) based on feedback and queries received from various stakeholders. These FAQs (dated 04-12-2025) aim to help taxpayers better understand the reporting requirements for different tables of GSTR-9 and GSTR-9C, especially concerning value disclosures and reconciliations.
Access the complete FAQ document by clicking here.

— Team GSTN

Enroll in Our Practical Course on GSTR-9/9C (FY 2024-25)

Includes:

  • GSTR-9/9C for FY 2024-25 & 2023-24

  • Reconciliation: 2B vs 2A and 2B vs Books

GST FAQs – Summary of Key Queries & GSTN Replies

S. No. Query GSTN Reply
1 I paid RCM GST for FY 2024-25 in the GSTR-3B of FY 2025-26. Should this liability and corresponding ITC be disclosed in GSTR-9 of FY 2024-25 or FY 2025-26? The RCM liability and related ITC must be reported in GSTR-9 of FY 2025-26.

Explanation: As clarified by CBIC in the press release dated 03-07-2019, RCM tax should be reported in the year in which it is actually paid, along with applicable interest. Accordingly, both payment and ITC are to be shown in the Annual Return of the year of payment.
2 Ineligible ITC of FY 2023-24 was availed and reversed in FY 2024-25. Instructions say ITC availed relating to FY 2023-24 should be shown in Table 6A1 of GSTR-9 for FY 2024-25. But where should the reversal be shown? The ITC of FY 2023-24 claimed in FY 2024-25 should indeed be shown in Table 6A1.

However, the reversal of such ITC should NOT be reported in Table 7 of GSTR-9 for FY 2024-25, since Table 7 relates only to current year (2024-25) ITC reversals.
3 Table 12B of GSTR-9C seems irrelevant because Table 7J of GSTR-9 doesn’t consider ITC of FY 2023-24 claimed or reversed in FY 2024-25. Table 12B is meant to capture ITC booked in earlier years but claimed in the current year. Therefore, the figure will not appear in Tables 12A or 12E, which may create mismatches.

If unreconciled differences arise in Table 12F, taxpayers should provide reasons in Table 13 of GSTR-9C.
4 Table 7J of GSTR-9 doesn’t include Table 6A1, causing a mismatch with Table 4C of GSTR-3B for FY 2024-25. Table 4C of GSTR-3B may include ITC relating to FY 2023-24 that was claimed or reversed in FY 2024-25.

However, Table 7J of GSTR-9 includes only net ITC pertaining to FY 2024-25, so differences may occur wherever prior-year ITC adjustments were made in FY 2024-25.
5 How should ITC reversed during FY 2024-25 relating to FY 2023-24 be disclosed in GSTR-9? Should it be reduced from Table 6A1 or shown in Table 7? ITC of FY 2023-24 reversed in FY 2024-25 should not be reported anywhere in GSTR-9 of FY 2024-25. Table 7 contains reversals only for the current year, so this reversal is excluded.
6 ITC reflected in 2B for FY 2023-24 but goods received in April 2024 (FY 2024-25), ITC claimed in FY 2024-25. Should this be reported in Table 6A1 only, and how to manage mismatches in GSTR-9C? ITC pertaining to FY 2023-24 should not form part of FY 2024-25 audited financials. However, reporting depends on the accounting method adopted.

Values in Tables 12A to 12C should align with the taxpayer’s accounting methodology. Any mismatch in Table 12F may be explained in Table 13 of GSTR-9C.
7 Where should non-GST purchases be reported in GSTR-9? Non-GST purchases do not have a designated table in GSTR-9 and therefore do not need to be reported.
8 Is Table 4G1 of GSTR-9 applicable only to e-commerce operators? Yes. Table 4G1 is to be filled only by e-commerce operators liable to pay tax under Section 9(5) of the CGST Act.
GSTR-3B Data Access to Be Blocked from December 2025, Says GSTN

Table 3.2 in GSTR-3B – Reporting Framework and New Restrictions

Table 3.2 of Form GSTR-3B captures details of inter-state outward supplies made to the following categories:

  • Unregistered persons

  • Composition taxpayers

  • UIN holders

The values reported in this table are system-generated based on the aggregate outward supplies declared in Table 3.1 and Table 3.1.1 of GSTR-3B. They are auto-populated using data furnished in GSTR-1, GSTR-1A, and IFF.

Key Update – Effective for the November 2025 Tax Period

1. Table 3.2 Will Become Non-Editable

Starting from the November 2025 return period, taxpayers will no longer be able to manually modify the numbers appearing in Table 3.2.

The system-generated figures must be used as-is while filing GSTR-3B.

This measure aims to strengthen consistency between the outward supply returns (GSTR-1 / IFF) and the tax liability reported in GSTR-3B.

Making Corrections to Auto-Populated Table 3.2 Values

In case the values shown in Table 3.2 are incorrect due to mistakes made in GSTR-1 or IFF:

2. Revisions Can Be Made Only Through GSTR-1A

Taxpayers may:

  • Rectify or amend the relevant entries in GSTR-1A for the same tax period.

  • Once GSTR-1A is submitted, Table 3.2 is updated instantly, allowing filing of GSTR-3B with the corrected figures.

Further amendments, if required, may still be made in the GSTR-1/IFF of subsequent tax periods in accordance with standard amendment provisions.

Recommended Compliance Practices

3. Ensure Accurate Reporting in GSTR-1 / GSTR-1A / IFF

To avoid mismatches and repeated amendments, taxpayers should:

  • Carefully verify the draft GSTR-1 or GSTR-1A before submission.

  • Ensure correct classification of inter-state supplies.

  • Review B2C inter-state reporting thoroughly.

  • File GSTR-1/GSTR-1A only after confirming accuracy, since GSTR-3B will rely entirely on system-populated values.

Proper reporting ensures seamless auto-population of Table 3.2 without discrepancies.

Frequently Asked Questions (FAQs)

Q1. What is the new rule regarding Table 3.2?

From the November 2025 tax period onward, Table 3.2 of GSTR-3B will be non-editable. Taxpayers must file GSTR-3B using the auto-populated values sourced from GSTR-1/GSTR-1A/IFF.

Q2. How can incorrect values be corrected?

If errors arise due to incorrect GSTR-1 reporting:

  • Make necessary amendments in GSTR-1A for that specific tax period.

  • GSTR-1A instantly updates Table 3.2.

  • File GSTR-3B thereafter with the corrected figures.

Additional corrections may later be made in GSTR-1/IFF of following periods.

Q3. How can taxpayers ensure accuracy in Table 3.2?

  • Cross-verify all outward supply details before filing GSTR-1/GSTR-1A/IFF.

  • Immediately correct mistakes using GSTR-1A.

  • Accurately report inter-state B2C supplies.

  • Maintain consistency between outward supply returns and tax payment returns to avoid issues.

Q4. What is the deadline for filing GSTR-1A for Table 3.2 corrections?

GSTR-1A can be filed anytime after GSTR-1 is filed and up to the moment GSTR-3B is filed for the same tax period.

Therefore, corrections to Table 3.2 can be made using GSTR-1A right until GSTR-3B filing.

Income Tax Refunds: 31st December 2025 Is the Cut-off Date

Every year, many taxpayers either miss or postpone filing their Income Tax Return (ITR). However, the Income-tax Act allows you to claim a refund only if your ITR is filed within the prescribed time limit.

For Assessment Year (AY) 2025–26, the absolute last date to file a belated or revised ITR and secure any pending refund is:

➡️ 31 December 2025

Missing this deadline means your refund lapses — you permanently lose the right to claim the amount due to you.

📌 Why 31 December 2025 Is the Final Deadline

As per Sections 139(4) and 139(5) of the Income-tax Act:

  • A belated return (late ITR), and

  • A revised return (corrected ITR)

…can be filed only up to 31 December of the relevant assessment year.

For AY 2025–26:

  • The assessment year begins on 1 April 2025, and

  • The last permissible date to file a belated or revised ITR is 31 December 2025.

After this date, the income tax portal will not accept your return unless:

  • The government announces an extension (which is uncommon), or

  • You apply for Condonation of Delay under Section 119(2)(b) — a time-consuming process with no assurance of approval.

    What happens if you miss the 31 December 2025 ITR deadline?

    1️⃣ You forfeit any income-tax refund
    All types of refundable tax will become unclaimable if you don’t file on time: TDS on salary, TDS on fixed-deposit interest, TDS on professional fees, or any excess tax paid as advance/self-assessment tax.

    2️⃣ No chance to correct past mistakes
    You can only submit a revised return up to 31 Dec 2025. After that the law won’t let you fix errors in earlier returns.

    3️⃣ You lose the ability to carry forward losses
    Certain losses are allowed to be carried forward only if the ITR is filed within the due period. These include: business losses, speculative losses, capital-gains losses, and losses from racehorse ownership. Miss the deadline → you forfeit carry-forward claims.

    4️⃣ Penalties, interest and compliance notices
    Failing to file may invite:

    • Late-filing fee under Section 234F,

    • Interest under Sections 234A/234B/234C,

    • Automated compliance flags for AIS/TIS mismatches, and

    • System-generated notices where TDS doesn’t match the ITR.

    Who should definitely file by 31 Dec 2025?

    • ✅ Anyone expecting a refund (TDS deducted)

    • ✅ Individuals with taxable income after deductions

    • ✅ Salaried employees where employer TDS appears excessive

    • ✅ Freelancers, professionals and business owners (or anyone with books of account)

    • ✅ Senior citizens with TDS on bank FD interest

    • ✅ Students/interns/part-timers who had TDS deducted

    • ✅ Anyone who must revise a previously filed incorrect ITR

    Even if your taxable income is below the threshold, file if TDS was deducted or you maintain books — it preserves refund rights and documentation.

    Missed the deadline — any rescue options?

    Only limited, uncertain remedies:

    • Condonation of Delay (Section 119(2)(b)) — you can apply, but the CBDT may take 6–12 months to decide and may refuse the request. It’s not a reliable plan.

    • Updated ITR (ITR-U) can be filed later for corrections, but it does not allow claiming refunds.

    Don’t rely on these — they’re slow and uncertain.

    Practical tax-expert advice (short and actionable)

    • File your ITR before 31 Dec 2025 if a refund is due — even when income is below taxable limit.

    • Reconcile AIS, TIS, Form 26AS and bank interest entries before you file.

    • If you filed incorrectly earlier, revise the return before the 31 Dec deadline.

    • Remind family members (especially salaried employees and senior citizens) — many refund losses happen because people simply don’t know the deadline.

GST officers reprimanded by Allahabad HC for scrapping registrations without explaining the basis

Allahabad High Court Criticises GST Officials for Cancelling Registrations Without Citing Reasons

The Allahabad High Court has strongly criticised the GST department for routinely cancelling traders’ GST registrations without offering any justification. The court observed that such arbitrary action amounts to declaring the “economic death” of a business, as these casually issued cancellation orders impose severe and disproportionate hardship on taxpayers and disturb genuine commercial operations.

The bench emphasised that denying a dealer their statutory right to operate under GST without proper reasoning or a real chance to correct alleged mistakes runs contrary to the very principles on which the GST law is based.

Hearing a petition filed by Anil Art and Craft, the division bench of Justices Saumitra Dayal Singh and Indrajeet Shukla annulled an October 15 order of the Assistant Commissioner (State Tax), Bhadohi, which had cancelled the petitioner’s GST registration retrospectively from October 8.

The court directed that its judgment and a copy of the writ petition be forwarded to the commercial tax commissioner. Within 15 days, the commissioner has been asked to issue clear administrative instructions to all GST officers handling registration cancellations. These instructions must prescribe penalties for officers issuing non-speaking orders or denying reasonable opportunity to taxpayers, ensuring such lapses do not recur.

The petitioner had earlier received a show-cause notice alleging wrongful availment and transfer of fake input tax credit in violation of Section 16 of the GST Act. However, the court took serious note of how the officer handled the matter under the GST framework.

The judges pointed out that merely stating a reply is “not satisfactory” reflects only the final conclusion and not the reasoning behind it, falling short of the basic requirement of a reasoned administrative order. They added that the officer acted “carelessly” and in complete disregard of essential procedural safeguards.

Highlighting the gravity of cancelling a trader’s GST registration, the bench said that such an action effectively cripples the business — preventing it from issuing invoices and availing or passing on input tax credit. While the registration stands cancelled, all past tax liabilities and compliance obligations continue, making the impact even more severe.

The judgment dated November 20 noted that these casually passed cancellation orders impose undue hardship on traders and severely hamper legitimate business activity.

ITR Refund Delays: CBDT Chairman Explains the Reasons Behind the Hold-Up

The chairman of the Central Board of Direct Taxes (CBDT) on Monday issued a key update on the ongoing delays in processing income tax refunds for FY 2024–25. He noted that the department is currently reviewing cases where incorrect or questionable deductions may have been claimed.

According to the CBDT chief, several refund requests have been categorized as “high-value” or have been “red-flagged” by the system because of certain deduction-related claims.

Although the ITR filing deadline for this year was September 16, many taxpayers across the country are still awaiting their refunds.

The Chairman of the Central Board of Direct Taxes (CBDT) on Monday issued a key update on the ongoing delays in issuing income tax refunds for the financial year 2024–25. He noted that the department is currently reviewing instances where taxpayers may have incorrectly claimed certain deductions.

According to the chairman, several refund requests have been flagged by the system as either “high-value” or “suspicious” due to questionable deduction claims. Although the deadline for filing ITRs this year was September 16, many taxpayers across the country are still awaiting their refunds.

When can taxpayers expect their ITR refund?

CBDT Chairman Ravi Agrawal clarified that smaller-value refunds are already being processed, as reported by PTI. He added that all remaining refunds are expected to be issued either within this month or by December.

Agrawal explained that the department has detected several cases involving incorrect refund or deduction claims. These are currently under verification, he said, after inaugurating a taxpayer lounge at the ongoing India International Trade Fair (IITF).

Why are refunds getting delayed?

Agrawal said the delay is primarily due to a detailed review of wrongful or inaccurate deduction claims submitted by some taxpayers. Several refund requests have been categorised as “high-value” or have been red-flagged by the system because of discrepancies in the deductions claimed.

“We have also written to some taxpayers advising them to file a revised return if they have missed declaring any information,” he noted.

The chairman added that there is currently negative growth in refund volumes, which may be linked to a fall in refund claims even though TDS rates were rationalised.

According to PTI, refund issuances have dropped by around 18%, standing at over ₹2.42 lakh crore between April 1 and November 10.

Other Updates

Agrawal also mentioned that the department is working to reduce litigation in direct tax matters. Appellate authorities are making significant progress, with over 40% more appeals disposed of this year compared to last year. He expects the total number of resolved cases to be substantially higher by the end of the year.

Additionally, the Income Tax Department will soon release the new ITR forms and rules under the simplified Income Tax Act, 2025, which will take effect from the next financial year.

Income Tax Department flags cases of foreign assets not reported in ITR; SMS and email alerts to be issued soon.

The Income Tax Department announced on Thursday that it has flagged several “high-risk” cases where taxpayers failed to disclose their foreign assets while filing Income Tax Returns (ITRs) for Assessment Year (AY) 2025-26.

Starting November 28, the department will begin issuing SMS and email alerts to such taxpayers, advising them to file a revised ITR by December 31, 2025 to avoid penalties.

A similar exercise was carried out last year, when targeted messages were sent to taxpayers identified through data received from foreign jurisdictions under the Automatic Exchange of Information (AEOI) framework. These individuals were found to be holding foreign assets that were not reported in their ITRs for AY 2024-25.

This compliance-nudge initiative saw a strong response — 24,678 taxpayers (including many who did not receive alerts) revisited their filings and disclosed foreign assets worth ₹29,208 crore, along with foreign-source income of ₹1,089.88 crore during AY 2024-25.

According to the department, fresh analysis of AEOI data for FY 2024-25 (CY 2024) has again revealed cases where unreported foreign assets appear to exist, despite ITRs already filed for AY 2025-26.

The Central Board of Direct Taxes (CBDT) receives information on foreign financial assets of Indian residents under the Common Reporting Standard (CRS) and from the U.S. under the Foreign Account Tax Compliance Act (FATCA). This data helps the department identify inconsistencies and guide taxpayers toward accurate and timely compliance.

The ongoing campaign is intended to ensure correct reporting in Schedule Foreign Assets (FA) and Foreign Source Income (FSI) in ITRs. Accurate disclosure of foreign holdings and foreign-source income is a legal obligation under both the Income-tax Act, 1961, and the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

Essential Tax & Corporate Filing Due Dates for December 2025 – GST, IT, ITR & MCA

December is a crucial month for compliance, as it covers the 3rd instalment of Advance Tax, regular monthly GST filings, and key year-end submissions such as GSTR-9 and GSTR-9C. Below is a concise and practitioner-oriented calendar

Compliance Dates for December 2025

7 December 2025

TDS/TCS Payment for November 2025

All deductors must deposit the TDS/TCS collected in November by 7th December.
Delayed payment will attract interest and late-fee consequences.

10 December 2025

ITR Filing Deadline – Audit Cases (Extended)

The extended due date for filing Income Tax Returns for taxpayers requiring audit, as per the earlier CBDT notification.

11 December 2025

GSTR-1 for November 2025 (Monthly Filers)

Monthly GST filers must report and upload outward supply details for November by 11th December.

13 December 2025

GST Returns for Special Categories

Due dates for:

  • GSTR-5 – Non-resident taxable persons

  • GSTR-6 – Input Service Distributors (ISD)

  • IFF Upload – For QRMP taxpayers opting for Invoice Furnishing Facility

15 December 2025

1. Advance Tax – 3rd Instalment (75%)

Taxpayers with annual tax liability above ₹10,000 must pay 75% of their total advance tax by this date.

2. PF & ESI Contributions for November 2025

Employers must remit:

  • EPF contribution for November

  • ESI contribution for November

Both payments are due by the 15th of the following month.

3. Form 24G – Government Deductors

Government offices depositing TDS/TCS without a challan must submit Form 24G for November.

20 December 2025

GSTR-3B for November 2025 (Monthly Filers)

Monthly GST filers must submit GSTR-3B and pay any GST dues.
This includes:

  • Tax payment

  • ITC reconciliation

  • Matching outward supplies with GSTR-1

Also due:
GSTR-5A – For OIDAR (online information & database access) service providers.

25 December 2025

PMT-06 Payment for QRMP (Monthly Tax Payment) – November 2025

QRMP taxpayers opting for the monthly payment method must deposit tax for November via PMT-06 by 25th December.

30 December 2025

Challan-cum-Statement for Select TDS Sections

Due date for TDS statements relating to transactions of November under:

  • Section 194-IA

  • Section 194-IB

  • Section 194-M

  • Section 194-N (where applicable)

31 December 2025

1. GSTR-9 (Annual Return) – FY 2024-25

Mandatory for taxpayers whose turnover exceeds the prescribed threshold.

2. GSTR-9C (Audit Reconciliation Statement) – FY 2024-25

Applicable to taxpayers crossing the GST audit limit.
Certification by a Chartered Accountant is required.

3. Belated & Revised ITR for AY 2025-26

Last date for filing:

  • Belated returns

  • Revised returns

Only if assessment is not yet completed.

📌 ROC / MCA Compliance (Extended to 31 December 2025)

Since ROC due dates depend on each company’s AGM date, timelines vary. Generally:

  • AOC-4 → Due within 30 days of AGM

  • MGT-7 / MGT-7A → Due within 60 days of AGM

Companies must follow their individual AGM-based deadlines for December.

🔎 Practical CA Checklist – December 2025

Before 7 December

  • Deposit TDS/TCS for November

  • Reconcile 26AS/TIS for advance tax planning

By 11–13 December

  • File GSTR-1 for November

  • File GSTR-5, GSTR-6, and IFF (as applicable)

By 15 December

  • Pay 3rd instalment of advance tax

  • Deposit PF & ESI for November

  • Submit Form 24G (if applicable)

By 20 December

  • File GSTR-3B

  • Complete ITC matching and validation

By 25 December

  • QRMP taxpayers to deposit PMT-06 for November

By 30 December

  • File monthly TDS challan-cum-statements

By 31 December

  • File GSTR-9 and GSTR-9C for FY 2024-25

  • File belated or revised ITR for AY 2025-26

.

“Major GST and Income Tax Amendments Applicable From 1 December 2025”

Option 1 (Professional & Clear)

As we approach the beginning of 2026 and enter the final month of 2025, several new compliances under GST and Income Tax have been introduced for professionals to take note of.

Option 2 (Simple & Direct)

With 2026 around the corner and 2025 nearing its end, professionals must be aware of the new GST and Income Tax compliances now added to their checklist.

Option 3 (Formal & Detailed)

As the year 2025 draws to a close and the new year 2026 approaches, professionals should stay updated with the latest GST and Income Tax compliances that have recently come into effect.

Option 4 (Concise & Blog-friendly)

With 2025 ending and 2026 about to begin, new GST and Income Tax compliances have been rolled out for professionals to follow.

Option 5 (Engaging Tone)

The year 2026 is almost here, and as we wrap up 2025, experts and professionals must gear up for the new GST and Income Tax compliance requirements now in force.

GST & Income Tax Updates Effective 1 December 2025 — Key Changes You Must Know

1. GST — Time-barred Returns (Applicable from 1-Dec-2025)

What’s changing:
The GST portal will begin blocking older tax periods from filing. From 1 December 2025, the following returns will become time-barred and can no longer be filed online:

  • GSTR-1 / IFF: Up to Oct 2022

  • GSTR-1Q: Jul–Sep 2022

  • GSTR-3B / 3BM: Up to Oct 2022

  • GSTR-3BQ: Jul–Sep 2022

  • GSTR-4: FY 2021–22

  • GSTR-5: Oct 2022

  • GSTR-6: Oct 2022

  • GSTR-7: Oct 2022

  • GSTR-8: Oct 2022

  • GSTR-9 / 9C: FY 2020–21

Practical impact:
Any GSTIN with pending returns for these periods will not be able to file them after 1-Dec-2025, which may lead to:

  • Annual return mismatches

  • ITC restrictions

  • Notices from the department

Action steps:

  • Immediately run a pending-return check for all managed GSTINs

  • File any pending returns before 1-Dec-2025

  • For GSTR-9/9C (FY 2020–21), finish reconciliation and approvals now

  • If technical issues block filing, keep a documented remediation trail (emails, screenshots, etc.)

2. Rule 10A — Mandatory Submission of Bank Account Details

What’s changing:
All taxpayers (except TDS/TCS and suo-moto registrations) must provide bank account details within 30 days of registration or before filing GSTR-1/IFF, whichever occurs first. GSTN will start enforcing this shortly, and non-filing may lead to suspension.

Practical impact:
Failure to add a bank account may result in:

  • GSTIN suspension

  • Blocked GSTR-1 filing

  • E-way bill blocking

Action steps:

  • Check if bank account details are updated under Registration → Bank Accounts

  • If missing, file an amendment (Non-Core Fields) with supporting documents

  • Ensure all new registrants upload bank details within 30 days

  • Maintain ARN tracking for all amendments

3. GSTR-9 / 9C — Filing Deadline: 31-Dec-2025

What’s changing:
The filing window for GSTR-9 and 9C is open, and 31 December 2025 is the final due date.

Practical impact:
Entities requiring annual reconciliation and audit must complete records and file before the cutoff.

Action steps:

  • Prioritize clients requiring audit (turnover above threshold)

  • Complete 3-way reconciliation: Books ↔ GSTR-1 ↔ GSTR-3B

  • Prepare and upload GSTR-9C with audit documentation

4. Income Tax — ITR (Audit Cases) Due by 10-Dec-2025

What’s changing:
The due date for filing ITR for audit cases (FY 2024–25) has been extended to 10 December 2025.

Practical impact:
Late filing may lead to penalties, interest, or loss of carry-forward benefits.

Action steps:

  • Finalize Tax Audit Reports (Form 3CB/3CD)

  • Ensure ITR filing is completed by 10-Dec-2025

  • Set internal cut-off timelines for client submission of data

5. Advance Tax — 3rd Instalment Due on 15-Dec-2025

What’s changing:
The third instalment of advance tax is payable by 15 December 2025.

Practical impact:
Delay in payment attracts interest under Sections 234B & 234C.

Action steps:

  • Prepare updated advance tax workings for clients

  • Arrange challans and verify payment credits

  • Reassess surcharge/cess impact where applicable

6. Belated / Revised ITR (FY 2024–25) — Deadline: 31-Dec-2025

What’s changing:
Belated or revised returns for FY 2024–25 can be filed only up to 31 December 2025. After this date, only ITR-U (Updated Return) will be permitted — and ITR-U does not allow refunds.

Practical impact:
Filing after 31-Dec-2025 may result in loss of refunds.

Action steps:

  • Identify clients with potential refunds

  • File belated/revised return before deadline

  • Correct missing TDS/TCS or income mismatches promptly

7. MCA — Compliances Extended to 31-Dec-2025

What’s changing:
MCA has extended deadlines for various statutory filings (annual returns, financial statements, etc.) up to 31 December 2025.

Practical impact:
Companies get additional time, but many filings interact with taxation and banking requirements.

The Supreme Court has fixed the maximum TDS on foreign remittances at 10%, stating that provisions of the Income Tax Act cannot prevail over those in the DTAA.

New Delhi: The Supreme Court on Tuesday ruled that tax deducted at source (TDS) on payments made to non-resident entities cannot exceed the 10% limit prescribed under various Double Tax Avoidance Agreements (DTAAs). Any higher demand raised by the income tax authorities would therefore be contrary to treaty provisions.

The Court dismissed appeals filed by the income tax department, which had sought a 20% TDS rate from IT companies such as Mphasis, Wipro, and Manthan Software Services. The department’s position was that a higher rate should apply when the foreign recipient does not provide a permanent account number (PAN), as required under Section 206AA of the Income Tax Act, 1961.

The Supreme Court held that the TDS provisions under the Income Tax Act must be interpreted in conjunction with the DTAA, and that when a foreign recipient qualifies for treaty benefits, the tax deduction cannot exceed the DTAA’s specified ceiling—often 10%.

Affirming a 2022 judgment of the Karnataka High Court, the bench stated that the DTAA rate takes precedence over Section 206AA. Any interpretation permitting tax authorities to levy more than the treaty rate would be inconsistent with the statutory framework, the Court noted.

This position aligns with the Supreme Court’s 2023 affirmation of a Delhi High Court ruling from July 2022, which also held that Section 206AA cannot override DTAA provisions.

The revenue department had earlier argued that a survey conducted under Section 133A(2A) revealed remittances made to non-residents without appropriate TDS. According to the department, failure to furnish a PAN automatically triggered the 20% TDS rate under Section 206AA(1)(iii).

During the proceedings, the IT companies contended that their payments were for technical services rendered by foreign entities and were subject to the beneficial tax rates outlined under the respective DTAAs.

Exclusive: MCA may remove mandatory audits for companies with turnover up to ₹1 crore.

1. Concise Rewritten Version

The Ministry of Corporate Affairs (MCA) is considering exempting companies with annual turnover up to ₹1 crore from mandatory statutory audits, signalling a major change in compliance norms under the Companies Act, according to people familiar with the discussions.

The proposed exemption, likely to be brought in through an amendment to Section 139 during the upcoming Winter Session of Parliament, would mark the first turnover-based relaxation in India’s statutory audit framework. Currently, every company—regardless of scale—must appoint an auditor and undergo a yearly statutory audit.

A person directly involved in the deliberations noted that audits of very small enterprises “rarely uncover significant issues and offer limited practical benefit,” adding that most micro-company audit reports “tend to be clean and do little to enhance oversight, while adding to compliance expenses.”

ETCFO’s query to the MCA seeking clarification remained unanswered at the time of publication.

As per existing law, statutory audits underpin the preparation of financial statements, annual general meetings and filings such as AOC-4 with the Registrar of Companies. The requirement applies equally to one-person companies, small companies and closely held private firms.

A former ICAI president cautioned that aligning the ₹1 crore turnover limit with the tax-audit exemption under the Income Tax Act could create a compliance gap. “If companies up to ₹1 crore are exempt from both tax and statutory audits, what mechanism will ensure financial reporting reliability?” he asked.

He further warned that removing the statutory audit for micro-enterprises could reduce transparency in accounting and weaken compliance discipline at the lower end of the corporate ecosystem.

The proposal is still under review, with the draft amendment expected to attract considerable attention once tabled in the Winter Session of Parliament.

2. Neutral News Reporter Style

The Ministry of Corporate Affairs (MCA) is expected to offer statutory audit exemptions to companies with annual turnover up to ₹1 crore, a move that would significantly alter current compliance requirements under the Companies Act, according to sources who spoke to ETCFO on condition of anonymity.

The change is likely to be introduced by amending Section 139 during the Winter Session of Parliament. If approved, it will be the first audit-related relaxation linked to turnover. Presently, all companies, irrespective of size, must appoint an auditor and undergo a statutory audit annually.

A government official involved in the deliberations said that audits of micro-enterprises “seldom bring up material findings and offer limited real value,” pointing out that most such reports “are clean and do not substantially enhance oversight, but do increase compliance costs.”

Emails sent by ETCFO to the MCA seeking responses remained unanswered.

Under existing provisions, statutory audits form the foundation for preparing financial statements, convening AGMs and submitting filings such as AOC-4 to the Registrar of Companies. The requirement applies equally to OPCs, small companies and private entities.

A former ICAI president told ETCFO that extending the ₹1 crore threshold—which already exists under the Income-tax Act for tax-audit exemption—to statutory audits could lead to a regulatory gap. “If both audits are exempted, how will the integrity of financial reporting be ensured?” he asked.

He also cautioned that eliminating statutory audit for micro-level companies may reduce visibility into accounting practices and weaken compliance discipline.

The proposal is still being examined, and the draft amendment is expected to draw significant attention once placed before Parliament during the Winter Session.

3. Detailed Paraphrased Version (Closer to Original but Fully Rewritten)

The Ministry of Corporate Affairs (MCA) is weighing a proposal to exempt companies with annual turnover of up to ₹1 crore from the mandatory statutory audit requirement, representing a major shift in the Companies Act’s compliance architecture, according to people with direct knowledge of the matter who spoke to ETCFO anonymously.

This exemption is likely to be introduced through an amendment to Section 139 during the forthcoming Winter Session of Parliament and would be the first time India considers a turnover-based relaxation in its statutory audit system. Currently, all companies—regardless of their scale or structure—must appoint statutory auditors and undergo yearly audits.

A government official engaged in the consultation process said that audits of micro-level companies “rarely surface any substantial irregularities and offer minimal practical benefit,” adding that most such audit reports “tend to be unqualified and don’t significantly improve oversight, even though they increase compliance expenditure.”

Queries sent by ETCFO to the MCA remained unanswered at the time of going to press.

Under the present legal framework, statutory audits serve as the foundation for preparing financial statements, conducting AGMs and submitting various filings, including AOC-4, to the Registrar of Companies. The audit mandate applies uniformly to OPCs, small companies and private limited firms.

A past president of the Institute of Chartered Accountants of India (ICAI) warned that raising the ₹1 crore threshold—already used for tax-audit exemption under the Income-tax Act—to statutory audits could result in a regulatory gap. “If both tax audit and statutory audit are waived for companies up to ₹1 crore turnover, how will the credibility of financial reporting be safeguarded?” he asked.

He also expressed concern that removing statutory audits for small firms could reduce accountability and weaken compliance behaviour within the lower segment of the corporate sector.

The proposal is still under active discussion, and the draft amendment is expected to attract significant debate once presented in Parliament’s Winter Session.