Income Tax Updates

NOTIFICATION | CBDT | 5 MARCH 2026

If You Hold Crypto or Digital Assets, New Tax Reporting Rules Apply From 1 January 2026

On 5 March 2026, the tax department (CBDT) quietly updated the rules that govern how financial institutions report account information to tax authorities in India and abroad. The update — Notification No. 19/2026 — brings crypto-assets, virtual digital assets (VDAs), and digital currencies formally into this reporting framework. In plain terms: if you have accounts with a crypto exchange or a VDA service provider, that provider is now required to report your holdings and transactions to the Income Tax Department, the same way your bank reports your savings account under FATCA/CRS.

The rules have been made effective from 1 January 2026 — meaning data for January, February, and March 2026 must already be compiled and reported. Three specific rules were updated: Rule 114F (definitions), Rule 114G (what must be reported), and Rule 114H (how to verify account-holder identity). If your business is a VDA service provider, your compliance obligations under these rules start now.

Source: StudyCafe — CBDT Crypto-Asset Amendment Rules, March 2026

TRANSITION | INCOME TAX ACT 2025 | EFFECTIVE 1 APRIL 2026

India's New Income Tax Act Goes Live on 1 April 2026 — Here Is What Changes for You

The Income Tax Act, 1961 — which has governed Indian tax law for over 60 years — will be replaced by the Income Tax Act, 2025 starting 1 April 2026. The final set of rules (333 rules, 190 updated forms) is expected to be notified any day now, following the public consultation that ended on 22 February 2026. The new forms are designed to be pre-filled and simpler to navigate for individual filers.

The most important thing to know: tax rates are not changing. The new Act is a structural clean-up of the law, not a rate revision. What does change is terminology — "Financial Year" and "Assessment Year" are replaced by a single "Tax Year" from 1 April 2026. So FY 2026-27 will simply be called Tax Year 2026-27. Everything for FY 2025-26 (the year ending 31 March 2026) continues under the old 1961 Act — no disruption there. Businesses should update payroll software, TDS formats, and Form 24Q/Form 16 templates before 1 April.

Sources: Law Trend — Draft IT Rules 2026  |  RSM India — Navigator & Rules Overview

GST Updates

DEADLINE | GSTN | 31 MARCH 2026

Exporters: Renew Your Letter of Undertaking (LUT) by 31 March — or Pay IGST Upfront Next Year

If you export goods or services — or supply to SEZs — without charging GST, you can only do so if you have a valid Letter of Undertaking (LUT) on file. The GSTN portal has opened LUT filing for FY 2026-27, and the deadline is 31 March 2026. Filing is done online: go to Services → User Services → Furnish Letter of Undertaking on the GST portal and select FY 2026-27.

Miss this and you will have to pay IGST on every export invoice from 1 April — and then wait to claim it back as a refund. That ties up working capital unnecessarily. The filing itself is simple: you need two witnesses and your authorised signatory details. It takes under 15 minutes if your portal access is active.

Source: Taxscan — GSTN LUT Filing FY 2026-27

DEADLINE | GSTN | 31 MARCH 2026

Small Business Owners: Want to Switch to the Simpler Composition Scheme? File CMP-02 by 31 March

The GST Composition Scheme lets eligible small businesses pay a flat-rate tax and file returns quarterly instead of monthly — a significant compliance relief. If you want to move to this scheme from 1 April 2026, you must file Form CMP-02 on the GST portal by 31 March 2026. The scheme is available to businesses with annual turnover up to Rs. 1.5 crore (Rs. 75 lakh in some states). Go to Services → Registration → Application to Opt for Composition Levy.

Important: if you switch from the regular scheme to Composition, you must reverse the Input Tax Credit (ITC) you claimed on stock, raw materials, and capital goods held as of 31 March 2026. This reversal is done by filing Form ITC-03 within 90 days — i.e., by 30 June 2026. Also, if you are between Rs. 1.5 crore and Rs. 5 crore in turnover, check whether the QRMP quarterly filing scheme suits you — opt-in/out deadline for that is 30 April 2026.

Sources: ClearTax — GST News 2026  |  TaxGuru — Year-End GST Compliance Checklist

YEAR-END | GST | FY 2025-26

Three GST Year-End Tasks Every Business Must Complete Before 31 March

1. Reconcile your ITC before the year closes. Match your GSTR-2B (auto-drafted credit statement) against your books for FY 2025-26. Any ITC you missed for this financial year can still be claimed up to November 2026 — but after that, it lapses permanently. Do not carry unreconciled credits into the new year. 2. Transport businesses: file your GTA forward-charge declaration. If you are a Goods Transport Agency (GTA) and want to self-pay GST (instead of your customers paying under reverse charge) for FY 2026-27, you must file Annexure V on the GST portal by 31 March 2026. Once filed, this option holds for the entire year. 3. Start a fresh invoice series from 1 April 2026. Your invoice numbering must reset for FY 2026-27. Many businesses miss this and face reconciliation issues later — set a reminder now.

Source: WiseBooks — Year-End GST Compliance Guide FY 2025-26

MCA / Company Law

COMPLIANCE | MCA | DEADLINE 31 MARCH 2026 & 30 JUNE 2026

Director KYC Rules Have Changed — Annual Filing Is Gone, But Two Deadlines Still Apply This Year

Good news for directors: the MCA has scrapped the annual Director KYC (DIR-3 KYC) requirement. From 31 March 2026, you only need to file it once every three years — a significant compliance reduction for directors sitting on multiple boards. This change was notified through the Companies (Appointment and Qualification of Directors) Amendment Rules, 2025.

However, two deadlines apply right now. First, if your DIN (Director Identification Number) is currently deactivated because you missed earlier KYC filings, 31 March 2026 is your last window to reactivate it before the new regime kicks in. After this date, the reactivation process changes. Second, for directors with an active DIN, the first triennial KYC filing under the new system is due by 30 June 2026 for FY 2025-26. Also from 1 April 2026, enhanced CSR reporting requirements apply to companies meeting the Section 135 threshold — review if this applies to you. Companies previously mapped to ROC Delhi, Mumbai, Kolkata, or Kanpur should also verify their new ROC jurisdiction on the MCA portal (the split was operational from 16 February 2026).

Sources: CMA Knowledge — MCA Updates 2026  |  MCA Portal — Official Notices

AMNESTY SCHEME | MCA | 15 APRIL – 15 JULY 2026

Companies With Overdue ROC Filings Get a 90% Fee Waiver — But Only Between 15 April and 15 July 2026

If your company has missed filing annual returns (Form MGT-7) or financial statements (Form AOC-4) for one or more years, the MCA is giving you a one-time chance to clear the backlog cheaply. The Companies Compliance Facilitation Scheme, 2026 (CCFS-2026), announced via General Circular No. 01/2026 dated 24 February 2026, runs from 15 April to 15 July 2026. During this window, you pay only 10% of the total late fees that would normally apply — a 90% saving. Under normal rules, late fees accumulate at Rs. 100 per day with no upper cap, so multi-year defaults can mean huge amounts.

The scheme also helps inactive companies: you can apply for dormant status (Form MSC-1) at 50% of the normal fee, or close the company permanently via voluntary strike-off (Form STK-2) at just 25% of the fee. If you file before receiving any notice — or within 30 days of receiving one — you also get immunity from penalty proceedings under Sections 92 and 137 of the Companies Act. After 15 July 2026, the MCA has signalled it will take strict action against all remaining defaulters.

Source: LegalBabu — MCA CCFS-2026 Guide

RBI & Financial Sector

DRAFT RULES | RBI | 6–7 MARCH 2026 | COMMENTS DUE 6 APRIL 2026

Lost Money to an Online Banking Fraud? RBI Proposes Up to Rs. 25,000 in Compensation — Here's How It Would Work

The RBI released draft rules on 6–7 March 2026 that, if finalised, would make it significantly easier for ordinary banking customers to get compensation when they are victims of digital fraud. The rules are proposed to take effect from 1 July 2026 and would apply to all types of banks — commercial, co-operative, small finance, payments banks, and regional rural banks.

What the rules propose: (1) Zero liability if the fraud happened because of the bank's own failure — for example, the bank did not send transaction alerts, or there was a breach on their systems. (2) For smaller frauds — losses up to Rs. 50,000 — even if you were partly at fault, you can claim 85% of your loss or Rs. 25,000, whichever is lower, as a one-time lifetime benefit. The cost is shared between RBI (65%), your bank (10%), and the bank that received the fraudulent payment (10%). (3) Crucially, if you dispute a transaction, the bank must prove you were at fault — not the other way around. (4) Banks must provide round-the-clock fraud reporting channels, resolve complaints within 30 days, and send instant SMS alerts for any transaction above Rs. 500. To claim the compensation, you must report the fraud to both your bank and the National Cyber Crime Helpline (1930) within five days. The RBI is inviting public comments until 6 April 2026.

Sources: Outlook Money — RBI Draft Fraud Liability Framework  |  TaxGuru — RBI Commercial Banks Draft Directions

Labour Codes & Payroll Compliance

IN FORCE SINCE NOVEMBER 2025 | ACTION REQUIRED BY 1 APRIL 2026

New Labour Codes Are Live — Three Rules Every Employer Must Be Compliant With Before the New Financial Year

All four Labour Codes (Code on Wages, Industrial Relations Code, Code on Social Security, and Occupational Safety Code) have been in force since November 2025. As the new financial year begins, here are the three changes that directly affect how you structure salaries and run payroll:

1. The 50% Basic Wage Rule. Under the new Code on Wages, your employee's basic salary (plus DA and retaining allowance) must be at least 50% of their total CTC. If you have been keeping basic pay low and padding the rest with allowances to reduce PF liability, that structure is now non-compliant. The excess allowances get added back into wages for PF, ESI, and gratuity calculations — which means higher contributions. Review every salary structure before 1 April. 2. Final settlement within two working days. When an employee leaves — whether they resign, retire, or are dismissed — all outstanding wages must be paid within two working days of their last day. This means your payroll team needs real-time reconciliation capability at all times. 3. Digital records are now mandatory. Wage registers, attendance sheets, PF/ESI contribution records, payslips, and appointment letters must all be maintained digitally via the Shram Suvidha portal. Paper-only records are no longer compliant.

On ESIC: the proposed wage ceiling hike — from Rs. 21,000 to Rs. 30,000 per month — is still under review and has not been officially notified. Budget for it, but do not act on it until the formal notification is out. Additionally, from 1 April 2026, all payroll systems must generate TDS, Form 24Q, and Form 16 in the formats prescribed under the new Income Tax Act, 2025.

Sources: ZFour — Payroll Compliance India 2026  |  Business Standard — Key Payroll Changes 2026  |  Key4Comply — Labour Code One-Time Provisions

KEY COMPLIANCE DEADLINES — MARCH 2026 TO JULY 2026

7 MARCH 2026 TDS/TCS payment for February 2026 (non-government deductors)	15 MARCH 2026 Advance Tax — 4th & final instalment for FY 2025-26 (pay 100% of your estimated tax liability)
20 MARCH 2026 GSTR-3B for February 2026 (businesses with turnover above Rs. 5 crore)	31 MARCH 2026 LUT renewal (RFD-11) for exporters | Composition Scheme opt-in (CMP-02) | Deactivated DIN reactivation window closes | GTA forward-charge declarations | TDS correction statements for FY 2018-19 (Q4) through FY 2023-24 (Q1–Q3) — permanently barred from 1 April
1 APRIL 2026 Income Tax Act, 2025 goes live | Start new invoice series for FY 2026-27 | TDS correction window permanently closes for pre-FY 2024 periods	6 APRIL 2026 Deadline to send comments to RBI on Draft Digital Banking Fraud Compensation Framework
7 APRIL 2026 TDS/TCS payment for March 2026 (non-government deductors)	30 JUNE / 15 JULY 2026 Director triennial KYC (FY 2025-26) — file by 30 June | ITC-03 reversal for Composition Scheme switchers — by 30 June | CCFS-2026 amnesty scheme closes on 15 July 2026

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