Compliance Updates — GST, Tax & Regulatory News

Monthly filers must submit GSTR-1 (outward supplies) by the 11th and GSTR-3B (summary return with tax payment) by the 20th of the following month. QRMP scheme taxpayers file GSTR-3B by the 22nd or 24th depending on state group, with tax paid via PMT-06 by the 25th for the first two months of the quarter. Reconcile GSTR-2B before filing 3B to avoid an ITC mismatch.

The department has reinforced that ITC claimed in GSTR-3B must be reconciled against GSTR-2B. ITC claimed in excess of GSTR-2B is recoverable with interest at 24%. All businesses must implement monthly 2B reconciliation before filing 3B.

The e-invoicing threshold has been progressively reduced. Businesses with aggregate turnover above ₹5 crore in any preceding financial year must generate IRN for all B2B invoices. Non-compliance results in invoices being treated as invalid for ITC purposes.

GSTR-9 for FY 2025-26 will be due by December 31, 2026. Key reconciliation areas: ITC claimed vs GSTR-2B, revenue reported in ITR vs GST turnover, and advances received under GST. Begin the reconciliation process now to avoid last-minute errors.

Businesses and professionals liable for audit under Section 44AB must have the tax audit report filed by the auditor on or before September 30, ahead of the October 31 ITR deadline for audit cases. Books should be finalised at least two weeks before this date to leave room for the auditor's review and sign-off.

Businesses and professionals subject to tax audit, and entities with international or specified domestic transactions requiring transfer pricing certification, have until October 31 to file the return (November 30 where Form 3CEB applies). Non-audit individuals and businesses had a July 31 deadline for the same financial year — that date has already passed for FY 2025-26.

Tax deducted at source during a calendar month must be deposited by the 7th of the following month, with the sole exception of March deductions, which are payable by April 30. Late payment attracts interest at 1.5% per month from the date of deduction, calculated for part of a month as a full month.

Quarterly TDS returns — 24Q for salary, 26Q for non-salary domestic payments, 27Q for payments to non-residents — for the July to September quarter are due by October 31. Late filing attracts a fee of ₹200 per day under Section 234E until the return is filed, capped at the TDS amount.

Section 194T requires TDS deduction at 10% on salary, remuneration, bonus, commission, and interest paid to partners by a partnership firm or LLP, where the aggregate exceeds ₹20,000 in a financial year. Applies to all partnership firms and LLPs. TDS to be deducted at the time of credit or payment, whichever is earlier. Non-deduction attracts disallowance of 30% of such expenditure plus interest under 201(1A).

The new Income Tax Act 2025, effective April 1, 2026, has renumbered all TDS sections. Section 194C is now 193C, 194J is now 193N, and so on. The substantive provisions remain unchanged — only the section numbers have changed. All TDS challans, returns, and certificates filed from April 2026 must use the new section numbers.

Cumulative advance tax due by September 15 is 45% of annual estimated tax liability. For businesses with Q1 results available, compute the projection on actual Q1 performance rather than prior year estimates to avoid interest under 234C. Businesses with turnover above ₹1 crore are ineligible for 44AD and must pay advance tax in four instalments.

Every individual holding a Director Identification Number allotted on or before March 31, 2026 must complete DIR-3 KYC (or the web-based DIR-3 KYC-WEB where no details have changed) by September 30. Missing the deadline deactivates the DIN and attracts a ₹5,000 late fee to reactivate it — this applies even to directors of dormant or inactive companies.

For companies with March 31, 2026 year-end: AOC-4 (financial statements) is due within 30 days of AGM, and MGT-7 (annual return) within 60 days of AGM. AGM must be held by September 30, 2026. Late filing attracts penalty of ₹100 per day per form with no upper cap for MGT-7. Begin preparation in July to avoid the September rush.

Once the AGM confirms the statutory auditor's appointment or re-appointment, Form ADT-1 must be filed with the ROC within 15 days of the AGM. Companies planning an AGM in September should have the auditor's consent and eligibility certificate ready in advance so ADT-1 can be filed without delay.

All Indian companies and LLPs with foreign direct investment (FDI) or overseas direct investment (ODI) must file the Foreign Liabilities and Assets (FLA) Annual Return with RBI by July 15 each year. Non-filing attracts compounding charges. Entities that received FDI in the previous financial year and have not yet filed should do so immediately.

UAE Corporate Tax at 9% on taxable income above AED 375,000 applies to financial years ending December 31, 2025. Tax returns are due within 9 months of the financial year end, making the first return deadline September 30, 2026. Businesses must finalise their opening balance sheet position, assess transfer pricing applicability, and determine freezone qualifying income status before filing.

For Indian entities with US parent or subsidiary structures, transfer pricing documentation must be contemporaneous — prepared at the time of the transaction, not after. The Indian TP rules require an accountant's report in Form 3CEB if international transactions exceed ₹1 crore in aggregate. US rules require documentation to support arm's length pricing. Penalties apply on both sides if documentation is inadequate.