GST and Income Tax Checklist: 20 Key Compliances Before 31 March 2026

GST & Income Tax Year-End Compliance Guide

With the financial year 2025–26 drawing to a close, 31st March 2026 becomes a critical deadline for businesses, professionals, exporters, and salaried taxpayers.

Several tax planning measures, compliance requirements, and strategic decisions must be finalised before the year ends. Failure to act within the prescribed timelines may result in additional tax burden, penalties, interest costs, or loss of eligible benefits.

Below is a comprehensive checklist to help you stay compliant and tax-efficient before the financial year

PART A – INCOME TAX ACTION POINTS BEFORE 31 MARCH 2026

1️⃣ Advance Tax Payment (Where Applicable)

If your total tax liability for FY 2025–26 exceeds ₹10,000:

  • Ensure the final instalment of advance tax (due on 15 March) has been paid

  • Reassess whether any shortfall exists

  • Clear remaining dues before 31 March to minimise interest under Sections 234B and 234C

Timely review can help avoid unnecessary interest costs.

2️⃣ Year-End Tax Planning & Investments

This is the final opportunity in the current financial year to:

  • Invest under Section 80C (LIC, PPF, ELSS, etc.)

  • Pay medical insurance premium under Section 80D

  • Contribute to NPS under Section 80CCD(1B)

  • Optimise HRA and other salary exemptions

  • Make eligible donations under Section 80G

Strategic planning before 31 March can substantially reduce overall tax liability.

3️⃣ TDS Deduction & Deposit Check

Before closing the books:

  • Confirm TDS has been deducted on all applicable payments

  • Review contractor, professional, rent, and commission payments

  • Ensure timely deposit of deducted TDS

Non-compliance may lead to:

  • 40% disallowance of expenditure

  • Interest and penalty exposure

Important – Time Limit for Old TDS Corrections:
As per Section 397(3)(f) of the Income-tax Act, 2025, correction statements relating to certain past financial years (FY 2018–19 onwards as specified) will be accepted only up to 31 March 2026. From 1 April 2026, these will become time-barred. Deductors and collectors should take necessary action immediately.

4️⃣ TCS Compliance Review

For persons required to collect TCS:

  • Verify correct collection

  • Deposit any outstanding amount

  • Reconcile TCS figures with books

This is especially important considering revised TCS rates effective from 1 April 2026.

5️⃣ Capital Gains Planning

Before the year ends:

  • Strategically plan sale of shares or property

  • Undertake tax-loss harvesting where beneficial

  • Invest in eligible exemptions under Sections 54, 54F, or 54EC

  • Deposit funds in the Capital Gain Account Scheme, if applicable

Advance planning helps lawfully optimise capital gains tax.

6️⃣ MSME Payment Compliance – Section 43B(h)

Businesses must:

  • Ensure payments to MSME vendors are made within 45 days

Failure to comply may result in disallowance of the expense in FY 2025–26. This is particularly relevant for traders and manufacturers.

7️⃣ Finalisation of Books & Reconciliation

Before 31 March, complete:

  • Bank reconciliations

  • Debtor and creditor confirmations

  • Physical stock verification

  • Cash verification

  • Loan account reconciliation

Proper year-end closure reduces audit observations and scrutiny risks.

8️⃣ Prepare for Income-tax Act, 2025 (Effective 1 April 2026)

From the next financial year:

  • The Income-tax Act, 2025 will replace the existing Act

  • New Income-tax Rules, 2026 will be notified

  • Forms will be renumbered and simplified

Professionals should:

  • Map old provisions with new ones

  • Update compliance trackers

  • Inform and educate clients

  • Upgrade systems and software

Advance preparation in March will prevent confusion in April.

PART B – GST ACTION POINTS BEFORE 31 MARCH 2026

9️⃣ Composition Scheme – Opt In / Opt Out

Eligible taxpayers must:

  • File intimation before 31 March

  • Review turnover limits

  • Ensure readiness for FY 2026–27

The option must be exercised before the new financial year begins.

🔟 Letter of Undertaking (LUT) for Exporters

Exporters should:

  • File fresh LUT for FY 2026–27 before 1 April 2026

  • Verify IEC and GST details

  • Update DSC credentials

Failure to file LUT may require payment of IGST on exports.

1️⃣1️⃣ QRMP Scheme Decision

Taxpayers with turnover up to ₹5 crore:

  • May opt in or opt out of QRMP

  • Decision deadline is 30 April, but review should be done before year-end

Turnover analysis is essential before opting.

1️⃣2️⃣ GTA – Forward Charge or Reverse Charge

Goods Transport Agencies must:

  • File required annexures

  • Choose between Forward Charge Mechanism (FCM) or Reverse Charge Mechanism (RCM)

  • Exercise option within prescribed timelines

This decision impacts tax collection structure for the upcoming year.

1️⃣3️⃣ Hotels – Declaration of Specified Premises

Hotels are required to:

  • Submit Annexure VII

  • Declare specified premises for GST rate determination

This directly affects GST rates applicable in the next financial year.

1️⃣4️⃣ ITC Reconciliation

Before year-end:

  • Match books with GSTR-2B

  • Reconcile GSTR-1 with GSTR-3B

  • Reverse ineligible ITC

  • Follow up with vendors for mismatches

March is ideal for cleaning ITC discrepancies.

1️⃣5️⃣ Review Reverse Charge Liability

Verify whether RCM has been correctly paid and reported for:

  • GTA services

  • Legal services

  • Director remuneration

  • Other notified categories

Ensure correct reporting in GSTR-3B.

1️⃣6️⃣ E-Invoicing Compliance Check

If turnover exceeds prescribed limits:

  • Ensure e-invoicing compliance from 1 April

  • Update ERP systems

  • Generate IRN correctly

Non-compliance attracts substantial penalties.

1️⃣7️⃣ Turnover Assessment for FY 2026–27

Review aggregate turnover to determine:

  • Eligibility for Composition Scheme

  • QRMP eligibility

  • Audit applicability

Proactive review supports smooth compliance next year.

1️⃣8️⃣ Update GST Registration Details

Before year-end, verify:

  • Bank account details

  • Business address

  • Additional place of business

  • Authorised signatory information

Accurate records help avoid future notices.

1️⃣9️⃣ Refund Review (For Exporters)

Exporters should:

  • File pending refund claims

  • Review inverted duty structure claims

  • Ensure documentation is complete

Avoid delaying claims unnecessarily.

2️⃣0️⃣ Clean Compliance Record

Before closing the year:

  • File all pending GST returns

  • Clear late fees

  • Respond to outstanding notices

  • Maintain proper documentation

A clean compliance history reduces risk under the evolving tax regime.

Final Thoughts

31 March 2026 is more than just the end of a financial year. It is:

✔ The final window for tax planning
✔ The deadline for key GST decisions
✔ An opportunity to rectify compliance gaps
✔ The preparation phase for the Income-tax Act, 2025

Ignoring these action points may result in:

  • Higher tax outgo

  • Interest and penalties

  • Loss of eligible benefits

  • Increased compliance burden in the next financial year

Renumbering of Income Tax Forms as per ITA 2025 and Income-tax Rules, 2026

Income-tax Forms Revamped under ITA 2025 & Draft Income-tax Rules, 2026

The Government has initiated one of the most significant compliance overhauls in the history of Indian direct taxation with the introduction of the Income-tax Act, 2025 and the Draft Income-tax Rules, 2026.

A major component of this reform is the comprehensive restructuring, simplification, and renumbering of Income-tax Forms.

👉 Click here to get …

This article covers:

  • The reason behind the change in forms

  • Key forms that have been renumbered

  • The impact on taxpayers and professionals

  • What lies ahead

Background of the Reform

The proposed Income-tax Act, 2025, expected to come into force from 1 April 2026, seeks to:

  • Simplify drafting and terminology

  • Minimise litigation

  • Eliminate redundant provisions

  • Strengthen technology-based compliance

To align with the new legislation, the Government has released the Draft Income-tax Rules, 2026 for public consultation.

Extent of Rationalisation

Particulars Old Rules (1962) Draft Rules (2026)
Number of Rules 511 333
Number of Forms 399 190

The reduction has been achieved through consolidation, elimination of repetitive disclosures, and standardisation of reporting requirements.

1️⃣ Audit & Reporting Forms – Fully Reorganised

Audit and reporting formats have been merged and logically restructured.

Earlier Form Purpose New Form
3CA / 3CB / 3CD Tax Audit Report Form 26 (55 segmented clauses)
3CEB Transfer Pricing Audit Form 48
29B MAT Audit Report Form 66
10FA Tax Residency Certificate Form 42
10F DTAA Details (u/s 90 / 90A) Form 41

🔎 Key Change:
Multiple audit formats are consolidated into structured, segment-wise forms, reducing duplication and interpretational issues.

2️⃣ Charitable Trusts & NGOs – Streamlined Compliance

Compliance requirements for trusts and NGOs, previously considered complex, have been simplified and renumbered.

Earlier Form Purpose New Form
10A Provisional Registration Form 104
10AB Registration / Renewal Form 105
Form 10 Accumulation of Income Form 109
10B / 10BB Audit Report Form 112
10BD Donee Statement Form 113
10BE Donor Certificate Form 114

🔎 Key Change:
Distinct segregation between registration, audit, accumulation, and donation reporting reduces the risk of technical rejections.

3️⃣ TDS / TCS Compliance – Rationalised & Standardised

TDS/TCS forms have been logically renumbered and aligned for improved automation.

Earlier Form Purpose New Form
Form 13 Lower / NIL TDS Application Form 128
Form 16 Salary TDS Certificate Form 130
24Q TDS Return – Salary Form 138
26Q TDS Return – Residents Form 140
27Q TDS Return – Non-Residents Form 144
27EQ TCS Return Form 143

🔎 Key Change:
Enhanced design supports automated validation, reconciliation, and centralised processing — reducing mismatches and notices.

4️⃣ Other Significant Renumbered Forms

Several widely used compliance forms have also been reassigned:

Earlier Form Purpose New Form
Form 26AS Annual Tax Statement Form 168
15CA Foreign Remittance Form 145
15CB CA Certificate for Remittance Form 146
61A SFT Reporting Form 165

5️⃣ Philosophy Behind the New Structure

The new Rules and Forms reflect the same guiding principles as the Income-tax Act, 2025:

✔ Simpler Drafting

Clear and accessible language to avoid ambiguity.

✔ Uniform Data Fields

Standardised disclosures across forms to prevent repetitive reporting.

✔ Intelligent Forms

Designed with:

  • Pre-filled information

  • Built-in validations

  • Automated reconciliation

✔ Technology-Led Administration

Facilitates:

  • Centralised processing

  • Data analytics

  • Improved taxpayer services

6️⃣ Public Consultation & Participative Reform

The Draft Rules and Forms were placed in the public domain for 15 days (up to 22 February 2026).

Two comparative navigators have been provided:

  • Old Rules vs New Rules Mapping

  • Old Forms vs New Forms Mapping

Stakeholders can submit feedback rule-wise and form-wise, ensuring transparency and participative policymaking.

7️⃣ Implications for Stakeholders

For Taxpayers

  • Fewer forms to interpret

  • Reduced repetitive disclosures

  • More intuitive filing experience

For Professionals

  • Short-term adjustment phase

  • Long-term efficiency gains

  • Lower litigation and compliance risks

For the Tax Administration

  • Cleaner and structured data

  • Improved analytics

  • More predictable compliance environment

Conclusion

The restructuring and renumbering of Income-tax Forms under the Income-tax Act, 2025 and Draft Income-tax Rules, 2026 goes far beyond mere renaming.

It marks a structural shift toward a simplified, digitised, and taxpayer-centric compliance framework, laying the foundation for a modern and technology-driven direct tax regime in India.

Budget 2026 Update: Changes in TDS and TCS from 1 April 2026

Budget 2026: Key Amendments in TDS & TCS Framework (Effective from 1 April 2026)

The Union Budget 2026 has introduced wide-ranging reforms in the TDS and TCS provisions under the Income-tax Act, 2025. These measures are aimed at rate rationalisation, simplification of compliance, removal of ambiguities, taxpayer relief, and selective decriminalisation of offences.

Unless specifically mentioned otherwise, all amendments will come into force from 1 April 2026 and apply from Tax Year 2026–27 onwards.

1. Rationalisation of TCS Rates – Section 394(1)

Earlier, Section 394(1) prescribed multiple and inconsistent TCS rates across different categories of transactions. Budget 2026 proposes to standardise TCS rates wherever feasible, while also granting rate relief in select cases.

Revised TCS Rate Structure

Sl. No. Nature of Receipt Existing Rate Proposed Rate
1 Sale of alcoholic liquor for human consumption 1% 2%
2 Sale of tendu leaves 5% 2%
3 Sale of scrap 1% 2%
4 Sale of minerals (coal, lignite, iron ore) 1% 2%
5(a) LRS remittance – education / medical treatment exceeding ₹10 lakh 5% 2%
5(b) LRS remittance – other purposes 20% 20% (unchanged)
6 Overseas tour programme package Tiered (5% / 20%) 2% flat

2. Overseas Tour Programme Package – Significant Relief

Earlier Regime

  • 5% TCS on amounts up to ₹10 lakh

  • 20% TCS on amounts exceeding ₹10 lakh

Budget 2026 Change

  • Uniform TCS rate of 2%

  • ₹10 lakh threshold removed

  • Applicable irrespective of transaction value

Impact

  • Substantial reduction in tax burden on travellers

  • Prevents diversion of business to foreign tour operators

  • Simplifies compliance for Indian tour operators

3. Liberalised Remittance Scheme (LRS) – Rate Reduction

For remittances under RBI’s LRS:

Purpose Earlier TCS Revised TCS
Education / Medical treatment (above ₹10 lakh) 5% 2%
Other purposes 20% No change

This amendment provides notable relief to students and individuals remitting funds for medical treatment abroad.

4. Electronic Filing for Lower / Nil TDS Certificates – Section 395

Earlier Position

  • Manual application before the Assessing Officer

  • Lengthy and compliance-intensive process

Amendment under Budget 2026

  • Payees can now apply electronically

  • Application to be made before a prescribed income-tax authority

  • Certificate may be:

    • Issued electronically, or

    • Rejected if conditions are not met or details are incomplete

Benefit

  • Faster processing

  • Improved transparency

  • Major compliance relief for small and medium taxpayers

5. TDS on Supply of Manpower – Ambiguity Clarified

Issue Earlier

Confusion existed on whether manpower supply should be classified as:

  • Contract work (1% / 2%), or

  • Technical / professional services (up to 10%)

Budget 2026 Clarification

  • Supply of manpower is explicitly included under “work” in Section 402(47)

Applicable TDS Rates

  • 1% – where payee is Individual or HUF

  • 2% – in all other cases

Outcome

  • Uniform tax treatment

  • Reduced litigation and interpretational disputes

6. Deduction Allowed to Non-Life Insurance Business for Delayed TDS

Earlier Issue

  • Expenses were disallowed if TDS was not deducted or paid on time

  • No explicit provision for allowing deduction in a subsequent year

Budget 2026 Amendment

  • Schedule XIV amended

  • New provision allows deduction in the year in which TDS is deducted and paid

Applicability

  • Non-life insurance businesses

  • Effective from AY 2026–27 onwards

7. Decriminalisation and Rationalisation of TDS/TCS Offences

Fully Decriminalised Defaults

Failure to deposit TDS relating to:

  • Lottery or crossword puzzle winnings

  • Benefits or perquisites arising from business or profession

➡️ No imprisonment prescribed

Revised Punishment Structure (Selected Cases)

Applicable to:

  • Online gaming winnings

  • Virtual Digital Asset (VDA) transactions

Amount of TDS Default Punishment
Above ₹50 lakh Imprisonment up to 2 years / fine / both
₹10 lakh – ₹50 lakh Imprisonment up to 6 months / fine / both
Other cases Fine only

Wholly in-kind transactions involving online gaming or VDAs are excluded from prosecution.

8. TDS on Sale of Immovable Property by Non-Residents – Procedural Ease

Earlier

  • Buyer was required to obtain TAN for TDS compliance

Now

  • TDS can be deposited using PAN-based challan

  • No TAN required

Impact

  • Simplified property transactions with NRIs

  • Reduced compliance burden for resident buyers

Effective Date

✔ 1 April 2026
✔ Applicable from Tax Year 2026–27 onwards

Closing Note

With these comprehensive reforms, Budget 2026 significantly reshapes the TDS–TCS landscape, balancing automation, relief, and enforcement. Taxpayers, professionals, tour operators, insurers, and businesses engaged in manpower supply or cross-border remittances should realign systems, contracts, and compliance processes well ahead of 1 April 2026.

New Income Tax Slab Rates in Budget 2026: FY 2026-27 (AY 2027-28), ITR Deadlines & TDS/TCS Rules

Key Income Tax & ITR Updates – Budget 2026

  • No change in income tax slab rates under either tax regime.

  • Simplified ITR forms will be introduced shortly to ease compliance.

📅 Revised ITR Due Dates (Non-Audit Cases)

  • Business & Trust cases: Due date extended from 31 July to 31 August

  • Other non-audit cases: Due date continues to be 31 July

🔁 Revised Return – Section 139(5)

  • Time limit to file a revised return extended from 31 December to 31 March of the relevant assessment year.

🔄 TDS & TCS Updates

  • TDS and TCS rates rationalised to reduce complexity and mismatches.

🏠 Property Purchase from NRI – Key Relief

  • TAN requirement removed for buyers of property from an NRI.

  • A PAN-based challan system has been introduced for payment of TDS, simplifying the compliance process.

    Income Tax Slab Rates – Default (New) Tax Regime

    The following income tax slab rates will apply to individuals opting for the default new tax regime for FY 2026-27 (AY 2027-28):

    Total Income Tax Rate
    Up to ₹4,00,000 Nil
    ₹4,00,001 – ₹8,00,000 5%
    ₹8,00,001 – ₹12,00,000 10%
    ₹12,00,001 – ₹16,00,000 15%
    ₹16,00,001 – ₹20,00,000 20%
    ₹20,00,001 – ₹24,00,000 25%
    Above ₹24,00,000 30%

    These slab rates apply uniformly to all individuals, including salaried taxpayers, with no age-based differentiation.

    Key Features of the New Tax Regime

    1️⃣ Rebate under Section 87A

    Budget 2026 has enhanced tax relief through Section 87A:

    • Individuals with net taxable income up to ₹12,00,000 are eligible for a 100% tax rebate.

    • Consequently, the total tax liability becomes NIL for such taxpayers under the default regime.

    • This change significantly improves affordability for middle-income earners.

    2️⃣ Standard Deduction for Salaried Taxpayers

    • Salaried individuals can claim a standard deduction of ₹75,000 under the new tax regime.

    • Because of this deduction, effective tax-free income can extend up to ₹12.75 lakh.

    • This makes the default regime even more beneficial for salaried employees.

    Old Tax Regime (Optional)

    The old tax regime continues as an optional choice and follows a different slab structure. It allows various deductions and exemptions, such as HRA, Section 80C, Section 80D, and others.

    Income Tax Slabs under the Old Regime

    Income Slab Tax Rate
    Up to ₹2,50,000 Nil
    ₹2,50,001 – ₹5,00,000 5%
    ₹5,00,001 – ₹10,00,000 20%
    Above ₹10,00,000 30%

    While deductions are permitted under the old regime, it does not provide the higher rebate threshold available under the new tax regime. As a result, it may be less beneficial for taxpayers with limited deductions.

    Which Tax Regime Is Better for You?

    • Taxpayers with minimal deductions or exemptions may benefit more from the new default tax regime due to lower slab rates, higher rebate, and standard deduction.

    • Taxpayers who claim substantial deductions, such as housing loan interest, insurance premiums, and eligible investments, may still find the old regime more suitable.

    • It is advisable to perform a comparative tax calculation before choosing the appropriate regime.

Income Tax Changes Announced in Union Budget 2026

Direct Tax Proposals in Budget 2026 – Key Highlights

In Union Budget 2026, the Government has announced a wide-ranging and future-oriented set of Direct Tax reforms aimed at simplifying tax laws, reducing disputes, improving compliance, and enhancing India’s appeal as a global investment destination. These measures signal a decisive shift from a complex, enforcement-driven regime to a trust-based, technology-enabled, and taxpayer-friendly tax system, aligned with the vision of Viksit Bharat.

1. New Income-tax Act, 2025 – A Structural Overhaul

One of the most significant announcements in Budget 2026 is the replacement of the Income-tax Act, 1961 with the Income-tax Act, 2025, effective from 1 April 2026.

The new legislation is designed to:

  • Be substantially shorter and simpler, with fewer sections and chapters

  • Use clear and unambiguous language to minimise interpretational disputes

  • Be easier for taxpayers and tax authorities to understand and implement

Simplified Income-tax Rules and redesigned return forms will be notified shortly, enabling individuals to comply without professional assistance.

2. Taxpayer Relief & Ease of Living Measures

The Budget introduces multiple measures to address long-standing taxpayer concerns:

MACT Interest Exemption

  • Interest awarded by the Motor Accident Claims Tribunal (MACT) to individuals will be fully exempt from tax.

  • No TDS will apply, irrespective of the amount received.

Rationalisation of TCS under LRS

  • TCS on overseas tour packages reduced to 2% (from 5% / 20%), without any threshold.

  • TCS on education and medical remittances under LRS reduced from 5% to 2%.

Clarity on TDS for Manpower Supply

  • Manpower supply services classified as contractor payments.

  • TDS rate capped at 1% / 2%, eliminating ambiguity and litigation.

Automated Lower / Nil TDS Certificates

  • Eligible small taxpayers can obtain lower or nil TDS certificates through an automated, rule-based system without Assessing Officer interaction.

Simplification of Form 15G / 15H

  • Depositories authorised to accept declarations centrally and share them with multiple companies, reducing repetitive filings.

3. Rationalised Return Filing Timelines

To ease compliance pressure:

  • Belated and revised returns can now be filed up to 31 March (earlier 31 December) on payment of a nominal fee.

  • Staggered ITR due dates introduced:

    • ITR-1 & ITR-2 (Individuals): 31 July

    • Non-audit cases and trusts: 31 August

4. Relief for Property Transactions Involving NRIs

For purchase of immovable property from a non-resident:

  • Resident buyers are no longer required to obtain a TAN.

  • TDS can be deposited using a PAN-based challan, similar to resident transactions.

5. One-Time Foreign Asset Disclosure Scheme (FAST-DS, 2026)

A special 6-month disclosure window has been introduced for genuine hardship cases involving small taxpayers.

Category A

  • Undisclosed foreign income / assets up to ₹1 crore

  • Payment of:

    • 30% tax

    • 30% additional tax (in lieu of penalty)

  • Immunity from prosecution granted

Category B

  • Foreign assets up to ₹5 crore

  • One-time fee of ₹1 lakh

  • Full immunity from penalty and prosecution

Immunity from prosecution is also retrospectively extended for non-immovable foreign assets up to ₹20 lakh.

6. Rationalisation of Penalty & Prosecution Regime

Key reforms include:

  • Assessment and penalty proceedings to be concluded through a single consolidated order

  • No interest on penalty amounts during pendency of first appeal

  • Pre-deposit for appeal reduced from 20% to 10%, limited to core tax demand

Updated Returns Post Reassessment

  • Taxpayers can file updated returns even after reassessment initiation by paying an additional 10% tax.

Penalty to Fee Conversion

  • Certain technical defaults (audit, TP report, SFT) converted into fee-based non-criminal defaults.

Decriminalisation Measures

  • Minor offences punishable only with fines

  • Maximum imprisonment reduced to two years

  • Penalties graded based on tax evasion quantum

7. Targeted Tax Relief for Cooperatives

  • Deduction extended to supply of cattle feed and cotton seed by primary cooperatives

  • Inter-cooperative dividend income allowed as deduction under the new tax regime

  • Three-year dividend exemption for notified national cooperative federations, subject to redistribution

8. IT Sector Boost & Transfer Pricing Certainty

  • IT and IT-enabled services consolidated under “Information Technology Services”

  • Uniform safe harbour margin of 15.5%

  • Threshold enhanced from ₹300 crore to ₹2,000 crore

  • Automated safe harbour approvals valid for 5 years

  • Fast-track unilateral APA with targeted 2-year resolution

9. Measures to Attract Global Business & Talent

  • Tax holiday till 2047 for foreign cloud service providers using Indian data centres

  • 15% safe harbour margin for data-centre support entities

  • 5-year tax exemption for non-residents supplying capital goods to bonded zone manufacturers

  • Exemption of global income for foreign experts residing in India up to 5 years

  • MAT exemption for non-residents taxed on presumptive basis

10. Tax Administration Reforms

  • ICDS to be merged with Ind-AS from FY 2027-28

  • Definition of “accountant” rationalised to support global expansion of Indian advisory firms

11. Other Key Direct Tax Measures

  • Buyback taxation shifted to capital gains for all shareholders

  • Additional tax for promoters to prevent arbitrage

  • TCS on liquor, scrap and minerals reduced to 2%; tendu leaves from 5% to 2%

  • STT increased on futures and options

  • MAT to become final tax from 1 April 2026, rate reduced to 14%, with limited MAT credit set-off

Conclusion

The Direct Tax proposals in Budget 2026 mark a bold move towards simplicity, certainty, and trust-based taxation. With a new Income-tax Act, substantial compliance relief, rationalised penalties, and strong incentives for investment and global integration, the reforms aim to strike a balance between revenue mobilisation and taxpayer confidence, supporting long-term economic growth.

January 2026: Complete Compliance & Filing Schedule for Businesses

January marks more than just the start of a new calendar year—it is also one of the busiest compliance months for businesses, professionals, and employers. A tight cluster of statutory obligations such as GST returns, TDS filings, PF-ESI contributions, and MCA compliances leaves little room for error. Missing even one due date can trigger late fees, interest, penalties, or system-generated notices.

As we enter January 2026, the compliance environment continues to become more stringent, backed by tighter deadlines, automated checks, and enhanced portal validations. To help businesses, taxpayers, and professionals stay on track, this article provides a comprehensive, date-wise compliance calendar for January 2026, covering GST, Income Tax, TDS/TCS, PF, ESI, and MCA requirements—all consolidated in one place.

GST Compliance

Due Date | Return/Form | Period | Applicability
7 January 2026 | GSTR-7 | December 2025 | GST TDS deductors
7 January 2026 | GSTR-8 | December 2025 | E-commerce operators
11 January 2026 | GSTR-1 | December 2025 | Monthly outward supply filers
20 January 2026 | GSTR-3B | December 2025 | Monthly GST return
22/24 January 2026 | GSTR-3B (QRMP) | Oct–Dec 2025 | Based on state category
20 January 2026 | GSTR-5A | December 2025 | OIDAR service providers

GST Composition Scheme
18 January 2026 | CMP-08 | Oct–Dec 2025

TDS/TCS & Income-Tax Compliances

Monthly TDS/TCS Payment
7 January 2026 – Deposit of TDS/TCS for December 2025
(Generally payable by the 7th of the following month)

Quarterly TDS/TCS Returns
15 January 2026 | Form 27EQ (TCS) | Oct–Dec 2025
31 January 2026 | Forms 24Q, 26Q, 27Q | Oct–Dec 2025

Income-Tax Update
As per CBDT indications, new ITR forms and procedures under the simplified Income-tax framework are expected to be notified by January 2026, ahead of implementation from 1 April 2026.

PF & ESI Compliance

15 January 2026
• EPF contribution payment & return – December 2025
• ESI contribution payment & return – December 2025

(PF and ESI dues are generally payable by the 15th of the subsequent month.)

MCA / ROC Filings

31 January 2026
• Filing of Annual Returns and Financial Statements for FY 2024-25
• Ensure timely submission of AOC-4 and MGT-7 within the extended timeline

LLPs should also verify due dates for Form 11 and other applicable ROC filings based on entity-specific requirements.

Other Important Statutory Compliances

Professional Tax (PT)
Generally payable by 31 January 2026 for December 2025 salary deductions (state-specific rules apply).

Advance Tax
No advance tax installment is due in January; the next installment falls in March 2026.

Consequences of Delayed Compliance – Quick Snapshot

• GST: Late fees and interest on net tax liability
• TDS/TCS: Interest and penalties for late payment or return filing
• PF/ESI: Interest and statutory damages under respective laws

In today’s technology-driven compliance framework, delays rarely go unnoticed. GST filings, TDS payments, PF-ESI contributions, and MCA submissions are closely monitored through integrated systems. Timely compliance is no longer optional—it is essential.

Use this January 2026 Compliance Calendar as a ready reference, plan your filings in advance, and complete all obligations well before due dates. Staying proactive today helps avoid financial exposure, legal complications, and unnecessary stress in the future.

New Regulations for TDS Return Rectification Applicable from 01-04-2026

TDS / TCS Correction Statements: Time Limit Cut Down to 2 Years (Effective 01 April 2026)

🔔 What’s the Latest Change?

The Income Tax Department has introduced a major compliance reform by reducing the time limit for filing TDS and TCS correction statements to just 2 years, applicable from 1 April 2026.

Until now, deductors had the flexibility to revise old TDS/TCS returns even after many years. This long-standing practice will no longer be permitted.

⏳ Key Change Explained: Old Rule vs New Rule

🔙 Earlier Position (Before 01.04.2026)

  • No strict statutory deadline for filing correction statements

  • Corrections were practically allowed up to 7 years or more

  • Deductors commonly rectified:

    • Incorrect PAN details

    • Challan mapping errors

    • Short or excess deduction

    • Late reporting issues

  • Corrections were accepted even after several years

🔜 New Rule (From 01.04.2026)

  • ⛔ Correction statements allowed only within 2 years

  • The 2-year period will be calculated from:

    • End of the relevant financial year

  • ❌ No correction will be permitted beyond this period

  • This is a strict and absolute deadline, not extendable in any case

📅 Last Opportunity for Old TDS/TCS Periods

Correction statements for the following quarters will be allowed only up to 31 March 2026:

  • Q4 of FY 2018–19

  • Q1 to Q4 of FY 2019–20 to FY 2022–23

  • Q1 to Q3 of FY 2023–24

⚠️ From 1 April 2026 onwards, the TRACES portal will permanently block corrections for these periods.

❌ Impact of Missing the 2-Year Deadline

Failure to file corrections within the prescribed time may result in:

  • ❌ Permanent denial of correction facility

  • ❌ Loss of TDS/TCS credit for deductees in Form 26AS / AIS

  • ❌ Disputes with employees, vendors, or contractors

  • ❌ Penalties ranging from ₹10,000 to ₹1,00,000

  • ❌ Higher compliance and audit risks

  • ❌ Interest liability and possible disallowance of expenses

✅ Reason Behind This Amendment

The department aims to promote:

  • Timely reconciliation of data

  • Faster and accurate credit to deductees

  • Reduced backlog of old corrections

  • Lower litigation and disputes

  • A shift towards real-time, technology-driven compliance

This change reflects a move towards strict timelines and disciplined reporting.

🧾 Best Practices Suggested by the Department

  • Regularly use TRACES utilities and validation tools

  • Track defaults and mismatches frequently

  • File correction statements immediately upon detecting errors

  • Train staff on the revised timelines

  • Adopt a preventive compliance approach

📌 Action Checklist for Deductors & Tax Professionals

✔ Review all pending TDS/TCS correction requirements
✔ Resolve old mismatches before 31 March 2026
✔ Strengthen internal review and control systems
✔ Inform clients and staff about the 2-year non-negotiable limit

Understanding TCS: Tax Collected at Source and Its Applicability

What is TCS?

TCS stands for Tax Collected at Source. It is a tax levied by the Indian government on certain specified transactions. Under the TCS provisions, the seller collects a specified percentage of the transaction value as tax from the buyer at the time of sale. The collected tax is then deposited with the government.

When is TCS Applicable?

TCS is applicable in various scenarios, including:

  • Sale of goods: TCS is applicable when a seller sells goods worth a certain threshold amount to a buyer.
  • Providing services: TCS is applicable when a seller provides specific services, such as hotel accommodation, tour packages, or event management services.
  • Remittance of money abroad: TCS is applicable when a person remits money outside India under the Liberalized Remittance Scheme.
  • Sale of scrap: TCS is applicable when a seller sells scrap, including scrap of any machinery or equipment.
  • Lottery and gambling: TCS is applicable on the sale of lottery tickets, horse race betting, or any other form of gambling.

Who is Responsible for TCS?

The responsibility for collecting and depositing TCS lies with the seller or the person receiving the payment. They are required to collect the tax from the buyer and deposit it with the government within the specified time frame.

However, there are certain exceptions where the buyer may be responsible for TCS. For example, in the case of remittance of money abroad, the buyer is required to deduct and deposit TCS if the seller does not have a Permanent Account Number (PAN) or Tax Deduction and Collection Account Number (TAN).

It is important for both the buyer and the seller to be aware of their responsibilities regarding TCS to ensure compliance with the tax laws.

In conclusion, TCS is a tax collected by sellers on specified transactions. It is applicable in various scenarios such as the sale of goods, provision of services, remittance of money abroad, sale of scrap, and lottery or gambling. The responsibility for collecting and depositing TCS lies with the seller, although there are exceptions where the buyer may be responsible. It is crucial for both parties to understand and fulfill their obligations to avoid any penalties or legal issues.