India–EU Trade Deal Explained Simply: What It Means for India, Businesses, and Consumers
India has recently concluded a landmark trade agreement with the European Union (EU). This India–EU Free Trade Agreement (FTA) is being described as one of the most significant trade deals in India’s history, as it affects exports, imports, industries, employment, investments, and consumer prices.
While the reduction in luxury car prices has grabbed headlines, the scope of this agreement goes far beyond automobiles.
What Is the India–EU Trade Deal?
The India–EU Free Trade Agreement is a pact where:
India will lower import duties on selected European products
The European Union will reduce or eliminate duties on many Indian goods
Both sides will simplify procedures by reducing regulatory and non-tariff barriers
In simple terms, trade between India and Europe becomes cheaper, faster, and easier.
Why Is This Deal Important for India?
The European Union is one of India’s largest trading partners. Earlier:
Indian exports faced high tariffs and strict compliance requirements in Europe
European goods attracted high import duties in India
This agreement aims to:
Boost Indian exports
Lower the cost of imports
Improve investor and business confidence
Strengthen India’s position in global trade
1️⃣ Impact on Luxury Cars and Premium Vehicles
Why Luxury Cars Are Getting Cheaper
Most luxury cars—such as Audi, BMW, Mercedes, and Porsche—are imported from Europe or use European components.
Earlier:
High import duties made these vehicles extremely expensive
After the trade deal:
Import duties on premium vehicles are being reduced
Manufacturers are passing on the benefit to buyers
Real-World Example
Earlier price of a luxury SUV: ₹2.30 crore
New price after duty reduction: ₹1.60 crore
Savings for the buyer: around ₹70 lakh
Who Benefits Most?
Buyers of high-end imported vehicles
The premium and luxury automobile segment
Mass-market vehicles are unlikely to see major price changes.
2️⃣ Impact on Indian Exports
Indian exporters stand to gain significantly from this agreement.
Key Beneficiary Sectors:
Textiles and garments
Leather products and footwear
Engineering goods
Chemicals and pharmaceuticals
Marine products
Gems and jewellery
With reduced European import duties:
Indian products become more price-competitive
Export volumes can rise
Indian manufacturers can expand their global footprint
3️⃣ Impact on Jobs and Manufacturing
As exports grow:
Production levels increase
New manufacturing units are established
Employment opportunities rise
Labour-intensive sectors such as textiles, leather, and jewellery are expected to generate large-scale employment, especially for semi-skilled workers. This also supports the Make in India initiative.
4️⃣ Impact on Services Sector (IT and Professionals)
India’s strength in services is another major advantage under this deal.
Expected benefits include:
Better market access for Indian IT and software firms
More opportunities for consultants, engineers, and professionals
Easier movement for short-term overseas assignments
Growth in services exports
This can significantly boost India’s service-based economy.
5️⃣ Impact on Foreign Investment
The agreement provides a stable and predictable framework for investors.
Likely outcomes:
Increased European investment in India
Establishment of manufacturing facilities
Technology transfer
Joint ventures with Indian companies
India becomes a preferred destination for European firms looking to expand in Asia.
6️⃣ Impact on Indian Consumers (Beyond Cars)
Consumers may benefit through:
Access to better-quality imported products
More competitive pricing in selected categories
Greater choice and variety
However:
Price reductions will happen gradually
Sensitive domestic sectors are protected
The government is ensuring local industries are not harmed abruptly
7️⃣ Strategic and Global Importance
This deal goes beyond trade numbers.
It reflects:
India’s commitment to global trade norms
Reduced reliance on a limited set of trading partners
Stronger economic ties with developed economies
It also enhances India’s image as a reliable and long-term trade partner.
8️⃣ Will the Benefits Be Immediate?
Not all benefits will be seen right away.
Key points to note:
Tariff reductions will be phased over time
Many benefits will unfold over 2–5 years
Certain sectors will open gradually to protect domestic players
Luxury car price reductions are among the first visible outcomes, but they are only the beginning.
Simple Conclusion
The India–EU trade deal is a win-win agreement.
Exporters gain better market access
Manufacturers get growth opportunities
Consumers enjoy better choices and pricing
Luxury car buyers see immediate savings
The economy benefits in the long term
Cheaper luxury cars may be the most noticeable change today, but the real impact of this trade deal will be felt across industries, employment, and economic growth in the years ahead.
🇮🇳 Introduction – Why Banking Transactions Deserve More Attention Today
In a rapidly digitising India, almost every financial move—personal or professional—passes through the banking system. Whether it’s UPI collections, cash deposits, fixed deposits, or GST-related receipts, banks today function not just as facilitators but also as statutory reporting entities.
A common misconception among taxpayers is that only very large or suspicious transactions attract scrutiny from the Income Tax Department. However, this assumption is incorrect.
Even regular, everyday transactions—if misunderstood, misclassified, or improperly reported—can:
Get reported under Specified Financial Transactions (SFT)
Reflect in AIS / Form 26AS
Trigger income-tax notices
Result in bank account restrictions
Create GST registration or compliance complications
The purpose of this article/video is not to alarm, but to educate and empower.
In this guide, we clearly explain:
Banking transaction limits applicable for 2026
Transactions that are most likely to attract scrutiny
Rules related to cash, UPI, fixed deposits, and withdrawals
How bank activity links with Income Tax and GST
Practical steps to remain compliant and notice-free
If you carefully apply the compliance tips shared towards the end, you can manage your finances legally, confidently, and without unnecessary tax anxiety.
1️⃣ Banking Transaction Modes & Applicable Limits
🟦 UPI (Unified Payments Interface)
UPI remains India’s most popular digital payment method.
Standard daily limit: ₹1,00,000 per user
Per-transaction limit: Generally ₹1 lakh (varies by bank)
Higher limits: Up to ₹5 lakh per day for specific categories such as education, healthcare, government payments, and capital market transactions (effective 15 September 2025)
💡 Banks may impose lower internal limits—always verify with your bank.
🟦 IMPS (Immediate Payment Service)
Usually capped at ₹5 lakh per day per account
Available 24×7, making it suitable for urgent, higher-value transfers (subject to bank limits)
🟦 NEFT (National Electronic Funds Transfer)
Minimum: ₹1
No statutory maximum limit
Banks may set daily caps
Suitable for large-value transfers without UPI/IMPS restrictions
🟦 RTGS (Real-Time Gross Settlement)
Minimum transaction value: ₹2 lakh
No upper limit prescribed
Best for very high-value, time-sensitive transfers
2️⃣ Cash Transactions & Deposit Rules
🔸 Cash Deposit Reporting (SFT)
Banks and financial institutions are required to report:
₹10 lakh or more cash deposits in a savings account in a financial year
₹50 lakh or more cash deposits in a current account
₹10 lakh or more in fixed deposits during a financial year
👉 This does not mean tax is levied automatically, but the transaction is reported and may be examined.
🔸 Cash Receipt Restrictions – Section 269ST
Receiving ₹2 lakh or more in cash from a single person:
In one day, or
In a single transaction, or
For one occasion/event is prohibited.
💡 Penalty can be equal to the cash amount received.
🔸 Cash Loans & Repayments – Sections 269SS & 269T
Acceptance or repayment of loans/deposits in cash above ₹20,000 is not allowed.
Penalty equals the amount involved.
3️⃣ TDS on Cash Withdrawals – Section 194N
This provision discourages excessive cash usage and promotes transparency.
🧾 TDS Applicability on Cash Withdrawals
ITR Filing Status
Withdrawal Limit
TDS Rate
ITR filed for last 3 AYs
Above ₹1 crore
2%
ITR not filed for last 3 AYs
Above ₹20 lakh
2% up to ₹1 crore, 5% thereafter
📌 Limits apply per bank, calculated cumulatively for the financial year.
4️⃣ Specified Financial Transactions (SFT)
Banks report high-value transactions such as:
Cash deposits crossing prescribed limits
Large or unusual digital inflows/outflows
These details appear in AIS and Form 26AS and must align with your ITR disclosures.
5️⃣ GST Linkage With Bank Accounts
🟡 GST Registration Threshold
Goods: ₹40 lakh
Services: ₹20 lakh
If bank receipts exceed these limits, GST registration becomes mandatory.
⚠️ Non-linking of bank account on GST portal within 30 days may lead to GST suspension.
6️⃣ Mandatory Disclosures in ITR & GST
📌 Income Tax Return
All bank accounts must be disclosed
Unexplained SFT entries can trigger notices
📌 GST Portal
Primary bank account linking is compulsory
Non-compliance can result in registration suspension
7️⃣ Business Cash Payment Restriction – Section 40A(3)
Cash expenses exceeding ₹10,000 per person per day are not deductible
Encourages digital payments and proper documentation
8️⃣ Practical Tips to Stay Notice-Free
✅ Maintain separate accounts for business and personal use ✅ Reconcile UPI inflows with business records ✅ Avoid unnecessary cash transactions ✅ File ITR regularly to benefit from higher withdrawal thresholds ✅ Maintain documentation for all large-value transactions
🧠 Key Takeaways
Know your banking limits and comply with them
Large cash dealings attract reporting and penalties
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.
November 2025 brings a packed compliance schedule for businesses and professionals alike. This month combines several overlapping deadlines — from GST returns and Income Tax audits to annual filings under the MCA. To ease the pressure on taxpayers and corporates, authorities have granted notable extensions and relaxations, particularly concerning audit-related filings and MCA compliances.
🔹 1. MCA / ROC Compliances (As per Latest Relaxation)
✅ Revised Filing Deadlines The Ministry of Corporate Affairs (MCA) has granted an extension for submitting AOC-4, AOC-4 XBRL, AOC-4 CFS, AOC-4 NBFC (Ind AS), and MGT-7 / MGT-7A forms for FY 2024–25. Companies can now file these forms till 31 December 2025 without incurring any additional filing fees. This move is intended to facilitate a smoother transition to the new MCA V3 e-form system and reduce last-minute filing congestion on the portal.
⚠️ Note: This relaxation applies only to filing fees and does not extend the AGM due date. All companies must have conducted their AGM within the prescribed period (typically by 30 September 2025). The waiver covers late fees only, not the delay in AGM itself.
📋 Professional To-Do List
Submit all AOC and MGT forms by 31 December 2025 to utilize the relaxation.
Make sure AGM minutes, board resolutions, and financial statements are properly finalized and signed before uploading.
If the AGM was not held on time, guide your client to apply for condonation or file compounding as per law.
🔹2. Income Tax Due Date Extension — CBDT Circular No. 15/2025
The Central Board of Direct Taxes (CBDT) has provided much-needed relief to taxpayers by extending key Income Tax compliance deadlines for the Assessment Year 2025–26. This move comes after several professional associations and High Court interventions highlighted difficulties caused by portal issues and increased audit-reporting requirements.
✅ Revised Deadlines
Filing / Report
Earlier Due Date
Extended Due Date
Tax Audit Report (Form 3CA/3CB–3CD)
31 October 2025
10 November 2025
Income Tax Return (Audit Cases)
30 November 2025
10 December 2025
The CBDT has clarified that these extensions are intended to ease compliance pressure on businesses and professionals during the busy audit season.
⚙️ Key Action Points for Practitioners
Complete and upload Tax Audit Reports by 10 November 2025.
File Income Tax Returns for audit cases by 10 December 2025.
For Transfer Pricing cases, align Form 3CEB filing with the extended ITR deadline (expected 10 December 2025).
Reconcile all figures in AIS / TIS / Form 26AS before submission to avoid mismatch or notice generation.
These extensions give professionals some breathing room — but it’s crucial to plan filings early to avoid last-minute portal congestion.
🔹3.GST Compliance Deadlines for November 2025 (Covering October Transactions)
Th.e GST compliance calendar for November 2025 follows the regular filing cycle, covering returns related to October 2025. Businesses must ensure timely submission to avoid late fees and interest.
Form
Purpose
Due Date
GSTR-7
TDS under GST
10 November 2025
GSTR-8
TCS by E-commerce Operators
10 November 2025
GSTR-1
Details of Outward Supplies (Monthly Filers)
11 November 2025
GSTR-5 / GSTR-6
NRTP / ISD Returns
13 November 2025
GSTR-3B
Monthly Summary Return & Tax Payment
20 November 2025
PMT-06
Monthly Payment for QRMP Taxpayers
25 November 2025
📋 Action Points for Professionals
Review and reconcile October invoices before filing GSTR-1.
Match Input Tax Credit (ITC) from GSTR-2B prior to submitting GSTR-3B.
Ensure QRMP taxpayers complete their PMT-06 payments by 25 November 2025.
Begin early reconciliation for FY 2024–25 annual filings — GSTR-9 and GSTR-9C are due by 31 December 2025.
Getting your business registered under GST is one of the first steps toward becoming a compliant and recognized enterprise in India. Whether you’re starting a new venture, expanding operations across states, or selling through e-commerce platforms, GST registration provides you with a unique identification number (GSTIN) to legally collect and remit taxes.
To make the process hassle-free, it’s important to know exactly which documents are required before you apply. Below is a complete list of documents you’ll need for GST registration based on your business type.
🔹 1. Basic Documents Required for All Applicants
Regardless of the business type, the following documents are mandatory for GST registration:
Document Type
Purpose / Description
PAN Card
Permanent Account Number of the applicant — individual, company, or firm.
Aadhaar Card
Mandatory for Aadhaar authentication of the proprietor, partners, directors, or authorized signatory.
Photograph
Passport-size photo of the proprietor, partner, director, or trustee.
Proof of Business Address
Based on ownership type — ownership, rent, lease, or shared premises. Examples: Rent Agreement with NOC from owner, Electricity Bill, or Property Tax Receipt.
Digital Signature (DSC)
Compulsory for Companies and LLPs for verification. Other entities may use EVC (OTP) for authentication.
🔹 2. Proof of Business Place
The document required for business address proof depends on the nature of property ownership:
Ownership Type
Documents Required
🏠 Owned Property
• Latest Property Tax Receipt, or
• Electricity Bill, or
• Municipal Khata Copy
🏢 Rented / Leased Property
• Rent Agreement or Lease Deed (in business or applicant’s name), and
• Electricity Bill or Property Tax Receipt of the owner
🤝 Shared Premises
• Consent Letter or No Objection Certificate (NOC) from the owner, and
• Supporting ownership proof (e.g., Electricity Bill or Property Tax Receipt)
🔹 3. Business Type-Wise Documents
Business Type
Documents Required
🧑💼 (A) Proprietorship Firm
• PAN and Aadhaar of proprietor
• Photograph of proprietor
• Proof of business address
👥 (B) Partnership Firm / LLP
• Partnership Deed or LLP Agreement
• PAN of firm / LLP
• PAN & Aadhaar of all partners/designated partners
• Photographs of all partners
• Proof of business premises
• Authorisation Letter / Board Resolution appointing authorised signatory
🏢 (C) Private Limited / Public Limited Company
• Certificate of Incorporation (CIN) issued by MCA
• Memorandum (MOA) & Articles of Association (AOA)
• PAN of company
• PAN & Aadhaar of all directors
• Board Resolution authorising a director as authorised signatory
• Digital Signature Certificate (DSC) of authorised signatory
• Proof of principal place of business
🙏 (D) Trust / Society / NGO
• Registration certificate of trust/society
• PAN of entity
• PAN & Aadhaar of trustees/office bearers
• Proof of business address
• Authorisation letter for authorised signatory
🔹 4. Additional Documents (If Applicable)
Situation
Additional Documents Required
🏭 SEZ Unit / Developer
SEZ Letter of Approval issued by Government of India
🧾 Casual Taxable Person
Valid ID proof, details of business, and estimated turnover
🌍 Non-resident Taxable Person
Passport and proof of business in India
🛒 E-commerce Seller
Agreement with e-commerce operator (if applicable)
🔹 5. Aadhaar Authentication (Mandatory Since 2020)
Aadhaar authentication is mandatory for all individuals such as proprietors, partners, or directors.
It enables fast-track approval within 3 working days under the simplified registration process (Rule 8 & 9).
Failure to authenticate Aadhaar may lead to physical verification of business premises by the department.
🔹 6. Document Upload Guidelines
📂 Accepted Formats: Upload files only in PDF or JPEG format. Each file should not exceed 1 MB. 🧾 Clarity Matters: Make sure all scanned copies are readable and details are visible without blur or shadow. 🪪 Name Consistency: The name on your uploaded documents must match exactly with the name on your PAN and Aadhaar records. 💡 Utility Proof Validity: Upload a recent utility bill (issued within the last 2 months) for address verification. 🏷️ Business Name Accuracy: Ensure your trade name or business name matches your PAN registration. If different, specify clearly in the application. 🔐 Digital Verification: Use the Digital Signature Certificate (DSC) or EVC OTP carefully during submission to avoid rejection.
As we move into October 2025, the compliance season is in full swing — with multiple due dates for MCA filings, GST returns, TDS statements, and Tax Audits, all overlapping with the Diwali festive season. At the same time, several representations and court orders have led to extensions or expected relaxations for various filings. Let’s go through all updates and due dates one by one
MCA — Extension for Annual Filings & DIR-3 KYC
The Ministry of Corporate Affairs (MCA) has extended the due date for filing e-Form DIR-3 KYC and web form DIR-3 KYC-WEB without additional fees up to 31st October 2025
Practical Tip:
File your Director KYC before 31st October to avoid the ₹5,000 late fee. Companies should also begin preparing their Form AOC-4 (Financial Statements) and MGT-7/MGT-7A (Annual Return), as these are due soon after AGM closure (generally within 30 or 60 days of AGM).
Income Tax — Extension Expected for Audit & ITR Filing
Several High Courts have directed the CBDT to extend the due dates for ITR filing for audit cases.
Though official CBDT notification is awaited, these extensions are expected considering the heavy compliance load and technical portal issues.
Practical Tip:
Don’t wait for the official circular — start finalizing audits and ITRs now. If notified, file by the new dates to avoid penalty under Section 271B.
GST — Possible Extension for GSTR-3B (September 2025 Period)
Professional bodies such as BCAS and ICAI have requested an extension of GSTR-3B filing for the September 2025 period, due to Diwali holidays and the rollout of new GST changes (IMS & refund automation).
The government is reportedly considering extending the due date from 20th October 2025 to 25th October 2025.
Though not yet officially notified, such extensions around the festive period are quite possible.
Practical Tip:
File GSTR-1 (Monthly) by 11th October 2025 and Quarterly by 13th October 2025. Plan GSTR-3B filings early to avoid Diwali-week portal rush.
TDS, TCS & Other Key Compliance Due Dates (October 2025)
The Government of India, through the Finance Ministry and the Central Board of Indirect Taxes and Customs (CBIC), has introduced a GST Amnesty Scheme 2025. This scheme provides relief to taxpayers by waiving penalties and interest for certain past GST liabilities. The changes have been incorporated through Section 128A of the CGST Act, 2017, along with Rule 164 of the CGST Rules, 2017. The scheme applies to tax demands for the period from 1st July 2017 to 31st March 2020.
This article provides a detailed breakdown of the scheme, its eligibility criteria, benefits, procedural aspects, and clarifications issued by the CBIC through Circular No. 248/05/2025-GST and Notification No. 11/2025-Central Tax.
Circular No. 248/05/2025-GST
Notification No. 11/2025-Central Tax
Key Highlights of the GST Amnesty Scheme 2025
New Section 128A inserted into the CGST Act, 2017, allowing waiver of interest, penalty, or both for past tax demands.
Rule 164 added to the CGST Rules, 2017, to provide procedural guidance for availing benefits.
Applicable for tax demands raised under Section 73 of the CGST Act for the period 1st July 2017 to 31st March 2020.
Taxpayers need to make payments using FORM GST DRC-03 or other prescribed methods.
The scheme is effective from 1st November 2024.
Eligibility for Amnesty Benefits
As per Circular No. 248/05/2025-GST, the following categories of taxpayers can avail of the GST amnesty scheme:
Taxpayers who have already paid tax through FORM GSTR-3B
If the payment was made before 1st November 2024, it will be considered valid for amnesty.
However, payments made after this date must be through FORM GST DRC-03.
Taxpayers who have pending tax liabilities under Section 73
They must pay their due tax to avail of interest and penalty waiver.
Taxpayers who have filed appeals against consolidated adjudication orders
If an appeal covers periods both inside and outside the amnesty period, the taxpayer can withdraw only the portion related to the amnesty period (FY 2017-18 to 2019-20).
Procedural Requirements
The scheme specifies clear steps for taxpayers to follow in order to claim amnesty benefits:
A. Payment of Tax Liability
If the taxpayer already paid tax before 1st November 2024 via GSTR-3B, it will be considered valid.
If payment is made on or after 1st November 2024, it must be done using FORM GST DRC-03.
B. Withdrawal of Appeals
If a taxpayer has filed an appeal covering multiple financial years, they can partially withdraw the appeal for the period covered under Section 128A (FY 2017-18 to 2019-20).
The appellate authority will continue proceedings for the periods beyond the amnesty coverage.
Key Clarifications from CBIC
The CBIC issued Circular No. 248/05/2025-GST and Notification No. 11/2025-Central Tax to clarify various issues faced by taxpayers:
A. Treatment of Past Payments (FORM GSTR-3B)
Taxpayers who paid tax via FORM GSTR-3B before 1st November 2024 are eligible for amnesty.
Post 1st November 2024, payments must be made through FORM GST DRC-03.
B. Appeal Withdrawal Process
If an appeal covers both eligible (FY 2017-18 to 2019-20) and non-eligible periods, the taxpayer needs to:
Withdraw the appeal for the eligible period.
Continue the appeal for the non-eligible period.
C. No Refund for Taxes Already Paid
No refund will be granted for taxes, interest, or penalties already paid before the introduction of Rule 164.
If a demand notice covered both amnesty and non-amnesty periods, only the eligible period gets relief.
Changes Introduced in Rule 164 (via Notification No. 11/2025)
Modification in Rule 164(4):
Taxpayers must pay tax only for the period covered under Section 128A.
Partial appeal withdrawal is allowed.
Insertion of Explanation in Rule 164(4):
If a demand covers both eligible and non-eligible periods, the taxpayer will not receive a refund for taxes already paid.
Addition to Rule 164(7):
Instead of withdrawing a full appeal, taxpayers can notify the appellate authority that they wish to withdraw only for the amnesty period.
The Budget 2025 introduced major amendments to the Income Tax Act, 1961, aimed at simplifying India’s tax structure. These changes take effect from 1st April 2025 and will be applicable for FY 2025-26 (AY 2026-27).
1. Income Tax Slabs for FY 2025-26 (AY 2026-27)
The Budget 2025 introduced revised tax slabs under Section 115BAC (New Tax Regime) to enhance savings and boost spending capacity. These new slab rates apply to income earned in FY 2025-26 onwards.
Income Tax Slabs
Income Tax Rates
Up to ₹4 lakh
NIL
₹4 lakh – ₹8 lakh
5%
₹8 lakh – ₹12 lakh
10%
₹12 lakh – ₹16 lakh
15%
₹16 lakh – ₹20 lakh
20%
₹20 lakh – ₹24 lakh
25%
Above ₹24 lakh
30%
Note: Old Tax Regime (Optional) slab rates remain unchanged.
2. Increased Rebate Under Section 87A
The rebate under Section 87A has been increased to ₹60,000 from the previous limit of ₹25,000. This means taxpayers with income up to ₹12 lakh will have zero tax liability under the New Tax Regime.
3. Tax Deduction at Source (TDS) Changes
Effective April 2025, the TDS threshold limits for various sections have been increased as follows:
Section
Before 1st April 2025
From 1st April 2025
193 – Interest on securities
NIL
₹10,000
194A – Interest other than Interest on securities
(i) ₹50,000 for senior citizens (ii) ₹40,000 for others (banks, co-op societies, post offices) (iii) ₹5,000 in other cases
(i) ₹1,00,000 for senior citizens (ii) ₹50,000 for others (banks, co-op societies, post offices) (iii) ₹10,000 in other cases
194 – Dividend for individual shareholder
₹5,000
₹10,000
194K – Income from mutual fund units
₹5,000
₹10,000
194B & 194BB – Winnings from lottery, crossword, horse race
Aggregate exceeding ₹10,000 annually
₹10,000 per transaction
194D – Insurance commission
₹15,000
₹20,000
194G – Commission/prizes on lottery tickets
₹15,000
₹20,000
194H – Commission or brokerage
₹15,000
₹20,000
194I – Rent
₹2,40,000 annually
₹50,000 per month
194J – Professional/technical services fees
₹30,000
₹50,000
194LA – Compensation on land acquisition
₹2,50,000
₹5,00,000
194T – Remuneration/interest/commission to partners
NIL
₹20,000
The following changes in TDS Rates will apply from 1st April 2025:
S. No.
Section of the Act
Existing TDS/TCS Rate
Proposed TDS/TCS Rate
1.
Section 194LBC – Income in respect of investment in securitization trust
25% (if payee is an Individual or HUF) and 20% (otherwise)
10%
Note: Other TDS provisions remain unchanged.
4. Omission of TCS on Sale:
Existing Provision (Section 206C(1H))
TCS at 0.1% is collected on the sale of goods (except exports and certain specified goods). Applicable if the sale value exceeds ₹50 lakh in a financial year.
Issue with Existing Provision
TDS under Section 194Q also applies at 0.1% on the same transaction. Uncertainty for sellers, as they are often unaware if the buyer has deducted TDS, leading to double compliance(both TDS & TCS).
Key Change:
TCS on the sale of goods (Section 206C(1H)) is removed from 01.04.2025. TDS under Section 194Q will continue.
4. Benefits to Taxpayers
No double compliance (TCS & TDS confusion removed). Reduced compliance burden for sellers. Avoids unnecessary liquidity blockage.
5. Effective Date
From 01.04.2025, sellers are NOT required to collect TCS on the sale of goods.
5. Tax Collected At Source (TCS) Changes
The following TCS changes will be effective from April 2025:
Section
Before 1st April 2025
From 1st April 2025
206C(1G) – Remittance under LRS & Overseas Tour Packages
₹7 lakh
₹10 lakh
206C(1G) – Remittance for education through loans
₹7 lakh
NIL (No TCS)
Definition of “Forest Produce” Rationalized
Q1. What are the major provisions of Section 206C(1) (TCS on Sale of Specified Goods)? Section 206C(1) mandates TCS collection on the sale of specific goods like alcohol, timber, tendu leaves, and other forest produce.
Q2. What changes were made in Finance Bill 2025?
Three major amendments:
“Forest produce” has been formally defined.
Scope clarification: Now, only “forest produce under a forest lease” is liable for TCS.
TCS Rate Reduction:
TCS on timber and other forest produce (excluding tendu leaves) under a forest lease is reduced from 2.5% to 2%.
Q3. How has “forest produce” been defined? It follows the meaning provided under State Forest Acts or the Indian Forest Act, 1927.
Q4. What are the key changes in TCS applicability on forest produce? Earlier: TCS was applicable to all forest produce sales. Now: Only forest produce obtained under a forest lease is liable for TCS.
Q5. What is the new TCS rate for forest produce (excluding timber and tendu leaves) under a forest lease? The TCS rate is reduced from 2.5% to 2%.
Exemption from Prosecution for Delayed Payment of TCS (Section 276BB)
Q1. What is Section 276BB of the Income-tax Act, 1961? Section 276BB provides for prosecution in case of failure to pay the tax collected at source (TCS) to the credit of the Central Government.
Q2. What amendment has been made in Section 276BB in Finance Bill 2025? The amendment states that prosecution shall not be instituted if the person has paid TCS to the credit of the Central Government on or before the prescribed time for filing the TCS statement under proviso to Section 206C(3).
Q3. What happens if the person does not pay TCS even after the due date? The present provisions of Section 276BB shall continue to apply, meaning prosecution can be initiated.
Q4. How does this amendment benefit taxpayers? Taxpayers who miss the TCS payment deadline but pay before filing the TCS statement will now be exempt from prosecution, reducing litigation risks.
6. Removal of Higher TDS/TCS for Non-Filers of Income Tax Return
Q1. What are Sections 206AB and 206CCA of the Act? Section 206AB mandates higher TDS rates for non-filers of income tax returns. Section 206CCA mandates higher TCS rates for non-filers of income tax returns.
Q2. What changes were made in Finance Bill 2025? Both sections are proposed to be omitted from 01.04.2025 onwards.
Q3. How does this benefit taxpayers? Deductors and collectors no longer need to verify whether the deductee/collectee has filed an income tax return, reducing compliance burdens. However, higher TDS/TCS rates for invalid PAN or no-PAN cases will continue to apply.
Q4. From when will these sections be omitted? From 1st April 2025, these provisions will no longer be applicable.
7. Updated Tax Return (ITR-U) Deadline Extended
The deadline for filing an Updated Tax Return (ITR-U) has been extended from 12 months to 48 months (4 years). Additional tax liability depends on when the ITR-U is filed:
If ITR-U filed within
Additional Tax
12 months from relevant AY
25% of additional tax (tax + interest)
24 months from relevant AY
50% of additional tax (tax + interest)
36 months from relevant AY
60% of additional tax (tax + interest)
48 months from relevant AY
70% of additional tax (tax + interest)
8. Benefits for IFSC Units
Sunset date extended: IFSC units can now commence operations until 31st March 2030 to claim tax benefits.
Life insurance policies issued by IFSC offices to non-residents are fully exempt under Section 10(10D), with no limit on premium amount.
9. Tax Exemptions for Start-ups
Start-ups incorporated before 1st April 2030 can avail 100% tax exemption on profits for three consecutive years out of ten years under Section 80-IAC, subject to conditions.
10. Tax Deduction for NPS Vatsalya
1. What is NPS Vatsalya?
A pension scheme launched on 18.09.2024, allowing parents/guardians to maintain an NPS account for minor children.
2. Existing 80CCD Provisions
Deduction available for contributions to NPS by employees, employers, or any assessee.
Withdrawals are taxable, subject to certain conditions.
3. Key Amendments in Finance Bill 2025
Tax Deduction Extended: Parents/guardians can now claim deduction for contributions to NPS Vatsalya (for up to 2 minor children) under the old tax regime. Allowed under Section 80CCD(1B) with an overall cap of ₹50,000 (including self & children’s contributions). Partial withdrawal (up to 25%) is tax-exempt under Section 10(12BA). Final withdrawal is taxable if a deduction was claimed earlier.
4. Effective Date
Applicable from AY 2026-27 (PY 2025-26).
11. Tax Exemption for Withdrawals from National Savings Scheme (NSS):
1. Previous NSS Provisions
Section 80CCA allowed deduction for deposits in National Savings Scheme (NSS).
Withdrawals (with interest) were taxable if a deduction was claimed earlier.
No deduction was allowed under Section 80CCA since AY 1992-93.
No tax on withdrawals after the depositor’s demise.
2. Key Change in NSS (DEA Notification – 29.08.2024)
No interest will be credited to NSS accounts from 01.10.2024.
3. Benefits under Finance Bill 2025
Tax exemption granted on withdrawals made on or after 29.08.2024. Exemption applies only to deposits for which deduction under Section 80CCA was claimed earlier. Allows depositors to withdraw funds without tax liability.
4. Effective Date
Applicable for withdrawals made on or after 29.08.2024.
12. Deduction on Remuneration Paid to Partners
The maximum deduction available for partners’ remuneration will be:
Book Profit
Deduction Limit
First ₹6,00,000 of book profit or loss
₹3,00,000 or 90% of book profit, whichever is higher
Remaining book profit
60% of book profit
13. Clarity in Taxation of Income on Redemption of Unit Linked Insurance Policy (ULIP)
Q1. What are the provisions relating to amounts received under a life insurance policy?
Ans. Section 10(10D) provides income-tax exemption on the sum received under a life insurance policy, including any bonus, subject to certain conditions.
Q2. What conditions must be fulfilled to claim exemption under Section 10(10D)?
Ans. To claim the exemption, the following conditions must be met:
The annual premium for any year during the policy term should not exceed 10% of the actual sum assured (for policies issued on or after 01.04.2012).
For policies issued after 01.02.2021, the total premium must not exceed ₹2,50,000 (for ULIPs) or ₹5,00,000 (for other life insurance policies) to qualify for exemption.
Q3. What happens if the conditions under Section 10(10D) are not fulfilled?
Ans. If the above conditions are not met, then:
For ULIP policies, the amount received will be taxed as capital gains under Section 45(1B).
For other life insurance policies, the income will be taxed under “Income from Other Sources”.
Q4. What changes have been introduced through the Finance Bill 2025?
Ans.
Previously, even if the ULIP premium exceeded 10% of the sum assured, the redemption amount was not explicitly taxed under “Capital Gains.” This led to ambiguity regarding its tax treatment.
Finance Bill 2025 clarifies that any sum received from a non-exempt ULIP policy will be taxed as capital gains.
This ensures uniform tax treatment for all ULIP policies, eliminating any confusion.
Thus, if the exemption under Section 10(10D) does not apply, the income received will be taxed as:
Capital Gains (for ULIP policies)
Income from Other Sources (for non-ULIP life insurance policies)
14. Changes for Charitable Trusts & Institutions
1. Extended Registration Validity
Trusts with income below ₹5 crores now get 10-year registration validity instead of 5 years.
2. Flexibility for Incomplete Applications
Incomplete registration applications will no longer lead to automatic cancellation. Trusts can now rectify mistakes before rejection.
3. Changes in ‘Specified Persons’ Definition
Higher contribution threshold:
A person is considered a “specified person” if they contribute ₹1 lakh in a financial year (earlier ₹50,000) OR ₹10 lakh in total (earlier no such limit).
‘Relatives’ and ‘concerns’ of specified persons are excluded from the definition.
Founders, trustees, and managers remain fully covered under existing restrictions.
15.Obligation to Furnish Information on Crypto Assets
1. Definition of Crypto Asset
Crypto assets are defined under Section 2(47A) as part of the Virtual Digital Asset (VDA) definition in the Income Tax Act.
2. Key Amendments in Finance Act 2025
Reporting entities must furnish prescribed information on crypto transactions. Information must be reported within the prescribed time and manner to the Income Tax Authority.
3. Reporting Obligations
Who must report? A prescribed reporting entity under Section 285BAA (to be defined in Income Tax Rules).
What information? Details of crypto transactions (as specified in Income Tax Rules).
To whom? The Income Tax Authority (as prescribed).
4. Why is this Reporting Necessary?
India is among 52 jurisdictions adopting the Crypto-Asset Reporting Framework (CARF). CARF mandates Automatic Exchange of Tax-Relevant Information (AEOI) on crypto assets. The G20 Leaders’ New Delhi Declaration called for swift CARF implementation.
5. Implementation Date
Reporting entities must start providing information from the prescribed date (to be notified in rules).
16. Annual Value of Self-Occupied Property : Deemed Let out property
The taxation of self-occupied property has been simplified. Relaxation in conditions under Section 23(2) for determining annual value as nil.
Previous Conditions
The annual value of a self-occupied house was considered nil if: The owner resided in it. The owner could not reside due to business, profession, or employment reasons.
New Relaxations in Finance Act 2025
Now, the annual value will be nil if the property is self-occupied, regardless of the reason for not residing in it. No longer necessary to prove that the owner couldn’t reside due to work-related reasons.
4. How Many Properties Can Be Considered as Nil?
Up to two self-occupied properties, at the owner’s option, can have nil annual value (if no rent or benefit is derived).
5. Example Scenario
House 1 (Bangalore) – Mother resides.
House 2 (Mumbai) – Owner resides.
House 3 (Delhi) – Vacant.
The owner can choose two houses to be treated as self-occupied with nil annual value for tax purposes.
6. Effective Date
Applies fromPrevious Year 2024-25 (Assessment Year 2025-26 onwards).
Investing money wisely is crucial for financial security, and individuals choose from various options like mutual funds, stocks, real estate, gold, government schemes, and fixed deposits (FDs). While mutual funds and stocks offer higher returns, they come with market risks. Gold and real estate provide stability but require significant capital and have liquidity constraints. On the other hand, fixed deposits (FDs) remain a preferred investment choice for many due to their safety, assured returns, and ease of access. However, interest earned on FDs is subject to Tax Deducted at Source (TDS), which can reduce your returns
Fixed Deposit (FD) interest is subject to Tax Deducted at Source (TDS) if it exceeds a certain threshold. The Finance Act 2025 has introduced key changes in TDS rules, including increase in the TDS threshold for interest under Section 194A. These changes will be effective from April 1, 2025.
Important Change from 1st April 2025: Increase in TDS Threshold on FD Interest (Section 194A)
Current Rule (Before April 1, 2025):
TDS is deducted at 10% if interest on FD exceeds:
₹40,000 for regular individuals
₹50,000 for senior citizens
New Rule (Effective April 1, 2025):
The threshold for TDS deduction is increased to ₹50,000 for regular individuals.
For senior citizens, the Increased to ₹1,00,000.
This means fewer people will have TDS deducted on their FD interest.
2. How to Save TDS on FD Interest?
If your total income is below the taxable limit, you can submit Form 15G or Form 15H to your bank to avoid TDS deduction on FD interest.
You can download the form from your bank’s website or submit it online via net banking.
Submit the form at the beginning of the financial year to avoid unnecessary TDS deductions.
The form needs to be submitted every financial year.
(C) Example on How Form 15G/15H Helps
Case 1: Rohan (aged 45) earns ₹45,000 as FD interest but has no other taxable income.
Without Form 15G, the bank will deduct 10% TDS on ₹5,000 (₹45,000 – ₹40,000 threshold).
If he submits Form 15G, no TDS will be deducted.
Case 2: Meera (aged 65) earns ₹1,10,000 as FD interest, but her total taxable income is ₹3,80,000 (below ₹4 lakh).
Without Form 15H, the bank will deduct 10% TDS on ₹10,000 (₹1,10,000 – ₹1,00,000 threshold).
If she submits Form 15H, no TDS will be deducted.
Fixed deposits remain a reliable investment choice for those seeking safety and steady returns. However, TDS on FD interest can reduce your earnings, especially if your total income is below the taxable limit. With the Finance Act 2025increasing the TDS threshold under Section 194A from ₹40,000 to ₹50,000 for individuals (₹50,000 to ₹1,00,000 for senior citizens), fewer taxpayers will be affected by automatic TDS deductions. Additionally, submitting Form 15G (for individuals below 60) and Form 15H (for senior citizens) can help eligible investors avoid unnecessary tax deductions. By understanding these rules and using tax-saving strategies wisely, you can maximize your FD returns and improve your financial planning.
The Union Budget 2024 introduced several significant changes in the tax deduction at source (TDS) on salary, specifically under the new tax regime. While the old regime remains unchanged, the new regime has undergone various amendments aimed at providing relief to taxpayers. Below are the key changes and their implications.
New Tax Regime
The new tax regime has revised the slab rates for the financial year 2024-25. The updated slabs are as follows:
Income Range (₹)
Tax Rate (%)
Up to 3,00,000
Nil
3,00,001 to 7,00,000
5%
7,00,001 to 10,00,000
10%
10,00,001 to 12,00,000
15%
12,00,001 to 15,00,000
20%
Above 15,00,000
30%
Increase in Standard Deduction
The standard deduction has been increased from ₹50,000 to ₹75,000 under the new regime.
Increase In Exemption of Family Pension:
The deduction u/s 57 increased from 15000 to 25000 under New Tax Regime
Employer’s Contribution to Pension Fund
The limit for the employer’s contribution to the pension fund under Section 80CCD(2), which is allowed as a deduction under both the old and new regimes, has been increased from 10% to 14% of the salary.
TDS Deduction Based on TCS Collection : Change in section 192
A new provision has been introduced where if TCS (Tax Collected at Source) is collected from an employee on any transaction and the employee declares this to the employer, the employer must consider this TCS for TDS deduction on salary. Previously, only TDS deducted was considered by the employer.
Old Tax Regime
For Individuals Below 60 Years
Up to ₹2.5 lakh: Nil
₹2,50,001 to ₹5 lakh: 5%
₹5,00,001 to ₹10 lakh: 20%
Above ₹10 lakh: 30%
For Senior Citizens (60 to 80 Years)
Up to ₹3 lakh: Nil
₹3,00,001 to ₹5 lakh: 5%
₹5,00,001 to ₹10 lakh: 20%
Above ₹10 lakh: 30%
For Super Senior Citizens (Above 80 Years)
Up to ₹5 lakh: Nil
₹5,00,001 to ₹10 lakh: 20%
Above ₹10 lakh: 30%
Rebate u/s 87A:
This is available only to Resident individual, not to non resident individual or any other person.
Rebate is allowed:
Under Old Tax Regime: only if total income is not exceeding Rs.500000,Rebate shall be allowed upto Rs.12500
Under New Tax Regime: only if total income is not exceeding Rs.700000, Rebate shall be allowed uptoRs.25000
Note:
Rebate shall not be allowed from LTCG u/s 112A
Not Allowed to HUF
Not allowed to NR
Allowed for LTCG/STCG u/s 111A, Casual Income ex. Lottery – under Old Regime Only
Examples to Illustrate the Changes
Example 1: Standard Deduction and New Slab Rates
Scenario:
Annual salary: ₹12,00,000
Applicable under the new regime
Calculation:
Gross Salary: ₹12,00,000
Standard Deduction: ₹75,000
Taxable Income: ₹12,00,000 – ₹75,000 = ₹11,25,000
Tax Computation:
Up to ₹3,00,000: Nil
₹3,00,001 to ₹7,00,000: 5% of ₹4,00,000 = ₹20,000
₹7,00,001 to ₹10,00,000: 10% of ₹3,00,000 = ₹30,000
₹10,00,001 to ₹11,25,000: 15% of ₹1,25,000 = ₹18,750
Total Tax Payable:
₹20,000 + ₹30,000 + ₹18,750 = ₹68,750
So TDS to be deducted in whole year based on this in equal amount.
Example 2: TDS Deduction Considering TCS
Scenario:
Annual salary: ₹10,00,000
TCS collected: ₹5,000
Employee declares TCS to the employer
Calculation:
Gross Salary: ₹10,00,000
Standard Deduction: ₹75,000
Taxable Income: ₹10,00,000 – ₹75,000 = ₹9,25,000
Tax Computation:
Up to ₹3,00,000: Nil
₹3,00,001 to ₹7,00,000: 5% of ₹4,00,000 = ₹20,000
₹7,00,001 to ₹9,25,000: 10% of ₹2,25,000 = ₹22,500
So TDS to be deducted in whole year based on this in equal amount.
The Budget 2024 has introduced several changes aimed at providing relief to taxpayers under the new tax regime. The increase in standard deduction, revised tax slab rates, higher deduction limits for employer contributions to pension funds, and adjustments for TCS collection are significant steps towards simplifying tax compliance and providing financial benefits to salaried individuals. Taxpayers should ensure their employers are informed about TCS collections to benefit from accurate TDS deductions on salary.
MCA — Extension for Annual Filings & DIR-3 KYC
Practical Tip:
File your Director KYC before 31st October to avoid the ₹5,000 late fee.
Income Tax — Extension Expected for Audit & ITR Filing
GST — Possible Extension for GSTR-3B (September 2025 Period)
TDS, TCS & Other Key Compliance Due Dates (October 2025)
Due Date
Compliance
TCS at 0.1% is collected on the sale of goods (except exports and certain specified goods).
TDS under Section 194Q also applies at 0.1% on the same transaction.
No double compliance (TCS & TDS confusion removed).
From 01.04.2025, sellers are NOT required to collect TCS on the sale of goods.
Section 206C(1) mandates TCS collection on the sale of specific goods like alcohol, timber, tendu leaves, and other forest produce.
The owner resided in it.
The owner could not reside due to business, profession, or employment reasons.
Up to two self-occupied properties, at the owner’s option, can have nil annual value (if no rent or benefit is derived).
The owner can choose two houses to be treated as self-occupied with nil annual value for tax purposes.
