Case Details: Satish Kumar Verma vs. Shri Kamta Prasad, Executive Director, U.P. State - [2026] 184 taxmann.com 79 (HC-Allahabad)

Judiciary and Counsel Details

• Rohit Ranjan Agarwal, J.
• Kalpnath Tripathi & Rajesh Shankar Srivastava for the Applicant.
• Utkarsh Birla for the Respondent.

Facts of the Case

In the instant case, the applicant filed a writ petition alleging non-compliance with the order passed by the Writ Court directing the Corporation to pay the retirement dues and salaries of its employees.

In the compliance affidavit filed by the Corporation, it was stated that the total amount payable to the applicant towards retiral dues was Rs. 15.71 lakhs. Out of this, Rs. 2.90 lakhs and Rs. 28.9 thousand were deducted under the heads ‘Protsahan Agrim’ and ‘Tyohar Agrim’. Further deductions were made towards GST and audit recovery, resulting in a total deduction of Rs. 4.55 lakhs from the retiral dues of the applicant.

It was noted that there is no provision for deducting ‘Protsahan Agrim’, ‘Tyohar Agrim’, or GST from the retirement dues of an employee of the Corporation.

High Court Held

The High Court observed that the amount received by the State Government through a soft loan for payment of retirement dues had not been properly disbursed to the employees, and that the Corporation was also not complying with the order passed by the Writ Court.

The High Court held that, as a last opportunity, one month’s time was granted to the Corporation to clear the entire retiral dues, without making any deduction from the amount payable to its employees, along with arrears of salary.

The post HC Bars Deduction of Advances and GST from Retiral Dues appeared first on Taxmann Blog.

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Case Details: ICICI Bank Ltd. vs. Punj Lloyd Ltd. - [2026] 183 taxmann.com 456 (NCLT-New Delhi)

Judiciary and Counsel Details

• Ramalingam Sudhakar, CJ. & Ravindra Chaturvedi, Technical Member
• Navin Pahwa, Sr. Adv., Aditya Vikram Singh & Ms Shreya Chandhok, Advs. for the Applicant.
• Sunil Fernandes, Sr. Adv. & Raghav Chadha, Adv. for the Respondent.

Facts of the Case

In the instant case, an application was filed by the financial creditor seeking initiation of CIRP against the corporate debtor. The application was admitted and the corporate debtor was placed under CIRP. However, the CIRP failed as the resolution plan submitted by the sole resolution applicant was not approved by the CoC.

Consequently, the members of the CoC approved a resolution for liquidation of the corporate debtor. The Liquidator conducted 14 rounds of e-auction for the sale of the corporate debtor as a going concern. The applicant company, being the successful bidder in the e-auction, sought approval of the going concern sale transaction structure for acquisition of the corporate debtor.

The applicant also sought approval of its acquisition plan along with certain reliefs and concessions.

NCLT Held

The NCLT observed that the competent authorities may consider granting such reliefs and concessions, keeping in view the objective of the Code, since the transaction involved a going concern sale. However, the amount payable by the applicant in terms of the auction to different creditors and stakeholders, and for keeping the corporate debtor as a going concern, could not be made subject to any condition, assumption, relief, concession, or qualification.

Further, the applicant would be entitled to such reliefs, concessions, or waivers as may be available or permissible under section 32A and other applicable provisions of the Code.

The NCLT held that since the applicant had purchased the corporate debtor on an “as is where is” basis, any reliefs or concessions sought in accordance with law would be examined by the concerned authorities on their own merits.

List of Cases Reviewed

• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 [Para 19]
• Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 (SC) [Para 22]; followed
• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132 [Para 19]
• Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 (SC) [Para 22]; followed

List of Cases Referred to

• Ghanashyam Mishra & Sons (P.) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. [2021] 126 taxmann.com 132/227 COMP CASE 251/166 SCL 237 (SC) (para 19)
• JSW Steel Ltd. v. Pratishtha Thakur Haritwal 2025 SCC Online SC 672 (para 20)
• Vaibhav Goel v. Dy. CIT [2025] 172 taxmann.com 601/255 COMP CASE 266/188 SCL 262 (SC) (para 20)
• Shiv Shakti Inter Globe Exports (P.) Ltd. v. KTC Foods (P.) Ltd. [2022] 138 taxmann.com 511/172 SCL 249 (NCLAT- New Delhi) (para 21)
• Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56/[2020] 157 SCL 445 (SC) (para 22).

The post NCLT Approves Going Concern Sale on ‘As-Is-Where-Is’ Basis appeared first on Taxmann Blog.

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Case Details: Baljinder Singh vs. Principal Commissioner of Income-tax - [2026] 183 taxmann.com 572 (Chandigarh-Trib.)

Judiciary and Counsel Details

• Laliet Kumar, Judicial Member & Krinwant Sahay, Accountant Member
• Parikshit Aggarwal, C.A. for the Appellant.
• Manav Bansal, CIT for the Respondent.

Facts of the Case

The assessee, an individual, filed its return of income for the relevant assessment year. The case was selected for scrutiny under the faceless regime. During the assessment, the assessee claimed exemption in respect of interest on enhanced compensation arising from the acquisition of agricultural land. The Assessing Officer (AO) accepted the assessee’s claim and completed the assessment.

On examination of the assessment records, the Principal Commissioner noticed that the AO failed to apply the provisions of section 56(2)(viii), read with section 145B(1) and section 57(iv). Accordingly, a show cause notice under section 263 was issued proposing to revise the assessment order. The matter reached the Chandigarh Tribunal.

ITAT Held

The Tribunal held that the AO didn’t discuss the issue of the taxability of interest on enhanced compensation. The assessment order does not refer to section 56(2)(viii) or section 57(iv), nor does it examine the effect of the amendments introduced by the Finance (No. 2) Act, 2009. The order is also completely silent on the judicial precedents governing the issue. Mere calling for information and placing it on record does not constitute an inquiry under the law. What is required is a conscious examination of the issue, the application of the relevant statutory provisions, and the formation of a reasoned view. The absence of any such exercise clearly shows a lack of proper enquiry and non-application of mind on the part of the AO.

The Finance (No. 2) Act, 2009, with effect from 01-04-2010, inserted section 56(2)(viii), which specifically provides that income by way of interest received on compensation or enhanced compensation shall be chargeable to tax. The legislative intent behind this amendment is explicit and leaves no scope for ambiguity. Once the statute clearly mandates taxability of such interest, the AO was duty-bound to apply the said provision.

Failure to do so renders the assessment order erroneous in law. This amendment was brought in to settle the controversy relating to the taxability of interest on compensation, irrespective of the nomenclature or the provision under which such interest is awarded. Once the statute itself deems such interest to be taxable as ‘Income from other sources’, the AO had no discretion to treat it as exempt unless supported by a binding authority holding otherwise.

Therefore, the order was erroneous and prejudicial to the revenue’s interests under section 263. Such interest, taxable as “Income from other sources”, was also not eligible for exemption under section 10(37). The PCIT’s assumption of jurisdiction was upheld.

List of Cases Reviewed

• Puneet Singh v. CIT [2019] 110 taxmann.com 116/415 ITR 215 (Punjab & Haryana)
• Mahender Pal Narang v. CBDT, New Delhi [2020] 120 taxmann.com 400/423 ITR 13/275 Taxman 222 (Punjab & Haryana) (para 74)
• Manjet Singh (HUF) Karta Manjeet Singh v. UOI [2016] 65 taxmann.com 160/237 Taxman 116 (Punjab & Haryana) (para 112) followed
• RKKR Foundation v. NFAC, Delhi [2021] 127 taxmann.com 352/282 Taxman 76 (Delhi) (para 77)
• Movaliya Bhikhubhai Balabhai v. ITO [2016] 70 taxmann.com 45/388 ITR 343 (Gujarat) (para 88)
• CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) (para 89) distinguished

List of Cases Referred to

• Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC) (para 2)
• CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167/[2010] 189 Taxman 436 (Delhi) (para 8)
• CIT v. Chet Ram (HUF) [2017] 86 taxmann.com 103/251 Taxman 4/[2018] 400 ITR 23 (SC) (para 8)
• CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) (para 8)
• ITO v. D.G. Housing Projects Ltd. [2012] 20 taxmann.com 587/343 ITR 329/[2013] 212 Taxman 132 (Delhi) (para 8)
• CIT v. Ghanshyam (HUF) [2009] 315 ITR 1/182 Taxman 368 (SC) (para 8)
• Mahender Pal Narang v. CBDT, New Delhi [2020] 120 taxmann.com 400/423 ITR 13/275 Taxman 222 (Punjab & Haryana) (para 11)
• Manjet Singh (HUF) Karta Manjeet Singh v. UOI [2016] 65 taxmann.com 160/237 Taxman 116 (Punjab & Haryana) (para 11)
• Movaliya Bhikhubhai Balabhai v. ITO [2016] 70 taxmann.com 45/388 ITR 343 (Gujarat) (para 17)
• RKKR Foundation v. NFAC, Delhi [2021] 127 taxmann.com 352/282 Taxman 76 (Delhi) (para 19)
• Satbir v. ITO [IT Appeal Nos. 1413 to 1415 (CHD.) of 2016, dated 9-7-2018] (para 21)
• Pawan Kumar v. Pr. CIT [2024] 159 taxmann.com 61/206 ITD 53 (Delhi – Trib.) (para 22)
• ITO v. Prabhayya Basayya Saraganachariaryaha Badshah [IT Appeal No. 858/Banglore/2018, dated 13.03.2019] (para 23)
• Puneet Singh v. CIT [2019] 110 taxmann.com 116/415 ITR 215 (Punjab & Haryana) (para 74)
• GPL-RKTCPL JV v. National Faceless Assessment Centre, Delhi [2022] 145 taxmann.com 156/[2023] 453 ITR 384/291 Taxman 409 (Delhi) (para 85)
• Movaliya Bhikhubhai Balabhai v. ITO (TDS) [2016] 70 taxmann.com 45/388 ITR 343 (Gujarat) (para 88).

The post Interest on Enhanced Compensation Taxable as IFOS | ITAT appeared first on Taxmann Blog.

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Notification No. G.S.R. 169(E), Dated 10.03.2026

The Ministry of Corporate Affairs (MCA) has notified the Companies (Accounting Standards) Amendment Rules, 2026, introducing amendments to Accounting Standard (AS) 22 – Accounting for Taxes on Income.

The amendments aim to align Indian accounting requirements with the OECD’s global tax reform framework under the Pillar Two Model Rules, which introduce a global minimum tax regime.

1. Applicability of AS-22 to Pillar Two Taxes

A new paragraph 2A has been inserted in AS-22 clarifying that the standard will apply to taxes arising from legislation enacted to implement the OECD’s Pillar Two rules, including Qualified Domestic Minimum Top-Up Taxes (QDMTT).

However, the amendment introduces a specific exception under which enterprises are not required to recognise or disclose deferred tax assets or deferred tax liabilities arising from Pillar Two income taxes.

2. New Disclosure Requirements

The amendment also introduces new disclosure requirements through paragraphs 32A to 32D.

2.1 Disclosure of Application of Deferred Tax Exception

Enterprises must disclose that they have applied the exception relating to deferred taxes for Pillar Two income taxes.

2.2 Separate Disclosure of Current Tax Impact

Entities are required to separately disclose the current tax expense or income relating to Pillar Two taxes in their financial statements.

2.3 Disclosure of Potential Exposure to Pillar Two Taxes

Where Pillar Two legislation has been enacted or substantively enacted but is not yet effective, enterprises must provide qualitative and quantitative disclosures explaining their potential exposure to such taxes.

These disclosures may include:

• Jurisdictions where the entity may be affected
• The proportion of profits exposed to Pillar Two taxation
• The indicative impact on the effective tax rate

3. Exemption for Small and Medium-Sized Companies

Small and Medium-sized Companies (SMCs) have been exempted from the disclosure requirements under paragraphs 32C and 32D, thereby reducing the compliance burden for smaller entities.

4. Effective Date

The amendments have come into effect immediately upon notification. However, certain disclosure requirements will apply for reporting periods beginning on or after 1 April 2025.

5. Objective of the Amendment

The amendments aim to:

• Align Indian accounting standards with the OECD’s global minimum tax framework
• Provide clarity on accounting treatment for Pillar Two taxes
• Ensure transparent disclosures of potential tax impacts in financial statements
• Maintain consistency with evolving international financial reporting practices.

Click Here To Read The Full Notification

The post MCA Amends AS 22 to Align with OECD Pillar Two appeared first on Taxmann Blog.

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CA Paras K Savla – [2026] 184 taxmann.com 214 (Article)

1. Abstract

The Delhi Income Tax Appellate Tribunal, in a landmark ruling dated January 30, 2026, denied India-Singapore DTAA treaty benefits to Hareon Solar Singapore Pvt. Ltd.—a wholly-owned subsidiary of a Chinese parent—on capital gains of Rs. 17.67 crore arising from the sale of equity shares and compulsorily convertible debentures in an Indian solar energy company. The Tribunal applied a rigorous substance-over-form analysis, invoking the Limitation of Benefits (LOB) clause under Article 24A of the India-Singapore DTAA, and held the entity to be a conduit shell company established primarily to obtain treaty benefits. The ruling reaffirms that a Tax Residency Certificate, while necessary, is not sufficient to claim treaty protection when the surrounding facts demonstrate treaty abuse. This analysis examines the Tribunal’s reasoning, the key factual indicators relied upon, and the broader implications for inbound foreign investment structures involving intermediate holding companies.

2. Introduction

The India-Singapore Double Taxation Avoidance Agreement (DTAA), long regarded as a gateway for tax-efficient foreign investment into India, has been a subject of sustained scrutiny by Indian tax authorities on account of its susceptibility to abuse through conduit holding structures. The third-country investor—invariably resident in a jurisdiction with no or minimal tax on capital gains—would interpose a Singapore Special Purpose Vehicle (SPV) to access India’s treaty network, thereby avoiding capital gains taxation in India.

Although both contracting States amended the treaty significantly with effect from April 1, 2017—introducing source-based taxation of capital gains on shares acquired on or after that date—grandfathering protection was accorded to investments made before that threshold date. This grandfathering, however, was never intended to be a blank cheque for conduit structures. The LOB clause under Article 24A, pre-existing the 2017 amendment, stood as a sentinel against structured treaty abuse.

The Delhi ITAT’s order in Hareon Solar Singapore Pvt. Ltd. v. Dy. CIT [2026] 183 taxmann.com 125 (Delhi – Trib.) represents a rigorous application of that sentinel provision. The Tribunal examined—and rejected—the treaty claim of a Singapore entity that was 100% owned by a Hong Kong company, which in turn was 100% owned by a Chinese parent, where the Singapore entity had no employees, no dedicated office, and no directors resident in Singapore. Capital gains of Rs. 17.67 crore on pre-2017 investments were held taxable in India, notwithstanding a valid Tax Residency Certificate issued by Singapore’s Inland Revenue Authority.

This article critically examines the Tribunal’s reasoning across three principal dimensions:

(i) the LOB clause analysis,

(ii) the legal status of the TRC in treaty benefit claims, and

(iii) the broader implications for multinational groups using intermediate holding companies to channel investments into India.

3. Background Facts and Corporate Structure

2.1 The Assessee and Its Corporate Lineage

Hareon Solar Singapore Pvt. Ltd. was incorporated in Singapore on April 24, 2015—just three months before the investment in question. The entity was a wholly-owned subsidiary of Hareon Solar Co. Ltd. (Hong Kong), which was itself wholly-owned by Hareon Solar Technology Co. Ltd. (China), the ultimate parent and a globally active photovoltaic module manufacturer.

Entity	Jurisdiction	Role
Hareon Solar Technology Co. Ltd.	China (PRC)	Ultimate Parent—Global PV Module Manufacturer
Hareon Solar Co. Ltd.	Hong Kong	Intermediate Holding Company
Hareon Solar Singapore Pvt. Ltd.	Singapore	Assessee—SPV (Incorporated April 24, 2015)
Renew Solar Energy (Karnataka) Pvt. Ltd.	India	Target Investee Company

2.2 The Investment and Divestment

In July 2015, barely three months after its incorporation, the assessee made its investment in Renew Solar Energy (Karnataka) Pvt. Ltd. (the “Indian Company”), subscribing to 40,92,941 equity shares and 14,89,180 Compulsorily Convertible Debentures (CCDs). The Indian Company was developing a 60MW(AC) solar power project—the very project for which the ultimate Chinese parent, Hareon Solar Technology, had simultaneously entered into a supply contract to provide photovoltaic modules.

In June 2019, the assessee divested its entire holding in the Indian Company to Renew Solar Power Pvt. Ltd. for an aggregate consideration of Rs. 76.47 crore (equity shares – Rs. 56.07 crore; CCDs – Rs. 20.40 crore), yielding long-term capital gains of Rs. 17.67 crore. The assessee claimed exemption under Article 13(4A)/13(5) of the India-Singapore DTAA on the ground that the shares were acquired before April 1, 2017 (grandfathering provision).

3. Legal Issues Before the Tribunal

The Tribunal was called upon to determine the following principal questions:

• Whether the assessee was entitled to the benefit of the India-Singapore DTAA, particularly the grandfathered exemption from capital gains taxation under Article 13(4A)/13(5);
• Whether the assessee satisfied the Limitation of Benefits conditions under Article 24A of the DTAA;
• Whether the assessee was a ‘shell’ or ‘conduit’ company within the meaning of the LOB clause;
• Whether the Tax Residency Certificate issued by IRAS was conclusive proof of Singapore tax residency and treaty eligibility;
• Whether the Revenue was estopped from denying treaty benefits on capital gains when it had previously allowed treaty benefits on interest income from CCDs in the same and prior assessment years.

Click Here To Read The Full Article

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Case Details: Bangalore Steel Distributors vs. Assistant Commissioner of Central Tax - [2026] 184 taxmann.com 144 (Karnataka)

Judiciary and Counsel Details

• S Sunil Dutt Yadav, J.
• Santosh Sagar Kapilavai, Adv. for the Petitioner.
• Akash Shetty, Adv. & Hemakumar, AGA for the Respondent.

Facts of the Case

The petitioner challenged the Order-in-Original passed by the Assistant Commissioner of Central Tax, contending that the petitioner’s reply and submissions were not considered during adjudication. It asserted that the purchases in question were made from a registered supplier and that valid tax invoices were issued. It was further submitted that the supplier had filed GSTR-1 and GSTR-3B and that the transactions were reflected in the petitioner’s GSTR-2A. It was contended that supporting submissions and documents had been furnished before the adjudicating authority; however, the authority proceeded to pass a non-speaking order without addressing the reply. The petitioner filed a writ petition seeking reconsideration. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the adjudicating authority failed to consider the reply and supporting submissions furnished by the petitioner, resulting in a non-speaking order and a breach of the principles of natural justice embodied in Sections 75 of the CGST Act and the Karnataka GST Act. The Court observed that the petitioner’s assertion regarding purchases remained uncontroverted on record and required proper adjudication on merits by the competent authority. It further noted that the impugned order did not address these submissions. Accordingly, the Court set aside the Order-in-Original and remitted the matter to the adjudicating authority for reconsideration after granting a fresh hearing.

The post Non-Speaking GST Order Ignoring Reply Set Aside | HC appeared first on Taxmann Blog.

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Case Details: Bhandary Gas Agency vs. Joint Commissioner of Commercial Taxes, DGSTO, SHIVAMOGGA - [2026] 184 taxmann.com 146 (Karnataka)

Judiciary and Counsel Details

• S.R. Krishna Kumar, J.
• Smt. Krishika Vaishnav & A. Mahesh Chowdhary, Advs. for the Petitioner.
• K. Hema Kumar, AGA for the Respondent.

Facts of the Case

The petitioner had leased a residential property to an educational foundation for use as accommodation for students, staff and teachers. It had paid GST on the rent received and subsequently claimed refund on the ground that the transaction was exempt under Entry 13 of ‘Notification No. 9/2017-Integrated Tax (Rate), dated 28-06-2017,’ which provides exemption for renting of residential dwelling for use as residence. During audit proceedings, the exemption was initially accepted; however, it was subsequently reversed and the refund claim was denied. The Petitioner’s objections and appeal were rejected, leading to the filing of a writ petition before the High Court.

High Court Held

The High Court held that Entry 13 of Notification No. 9/2017-Integrated Tax (Rate), dated 28-06-2017, issued under Section 6 of the IGST Act, exempts the renting of residential dwelling when used as residence. The Court observed that the term ‘residential dwelling’ refers to residential accommodation and is distinct from commercial establishments such as hotels. It further held that the use of such premises as hostel accommodation for students, staff or teachers constitutes residential use. Accordingly, leasing such residential premises was not exigible to GST and the impugned order denying refund was set aside.

List of Cases Reviewed

• Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling, Karnataka [2022] 135 taxmann.com 287/91 GST 750/63 GSTL 445 (Karnataka) (Para 5) followed

List of Cases Referred to

• Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling, Karnataka [2022] 135 taxmann.com 287/91 GST 750/63 GSTL 445 (Karnataka) (para 5).

The post Renting Residential Dwelling to Educational Body Not Taxable Under GST | HC appeared first on Taxmann Blog.

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Editorial Team – [2026] 184 taxmann.com 234 (Article)

Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:

1. Updates on IFRS for SMEs Accounting Standard

The IFRS for SMEs Accounting Standard Update (staff summary) provides recent developments relating to the third edition of the IFRS for SMEs Accounting Standard, including changes in consolidation guidance, recent discussions of the SME Implementation Group (SMEIG), and new implementation resources issued by the IASB. This update is a staff summary and has not been formally reviewed by the IASB.

a) Changes in Consolidation Guidance

Under the said update, a key highlight is the revision of Section 9 in the third edition of the IFRS for SMEs Standard, which is now aligned with IFRS 10 Consolidated Financial Statements. The update introduces a single control model for determining whether an entity should consolidate another entity. Under the revised definition, an investor controls an investee when the following three elements are present:

a) power over the investee’s relevant activities,

b) exposure or rights to variable returns, and

c) the ability to use power to affect those returns.

The earlier guidance relating to special purpose entities has been removed, simplifying the consolidation assessment.

The revised Section 9 also clarifies the accounting treatment when a parent loses control of a subsidiary. In such cases, the parent must derecognise the subsidiary’s assets, liabilities and non-controlling interest, recognise the fair value of consideration received and any retained interest, and record the resulting gain or loss in profit or loss.

Certain aspects remain unchanged to simplify the application. In particular, the standard retains the rebuttable presumption of control when an investor holds a majority of the voting rights, unless it can be clearly demonstrated that the elements of control are absent.

The amendments are generally applied retrospectively, with practical reliefs where retrospective application is impracticable or where the determination of control does not change.

b) Discussion on SMEIG Meeting

The update also reports on the SMEIG meeting held on 5th February 2026, where members discussed an application issue relating to the consolidation exemption. The issue concerns whether the exemption should apply to an intermediate parent whose ultimate parent is an investment entity that measures subsidiaries at fair value through profit or loss instead of consolidating them. As the IFRS for SMEs standard currently lacks an equivalent exemption found in IFRS 10, most SMEIG members recommended that the IASB amend the standard, preferably on an urgent basis rather than waiting for the next periodic review.

c) Implementation Resources Issued by the IASB

To support the consistent application of the IFRS for SMEs Accounting Standard, the IASB continues to provide several implementation resources for stakeholders. These include the online version of the IFRS for SMEs Accounting Standard available in multiple languages, hard-copy publications of the Standard, educational modules explaining key sections, and guidance on the procedure for submitting implementation issues.

Source – International Financial Reporting Standard

Click Here To Read The Full Article

The post [Global Financial Insights] Updates on IFRS for SMEs Accounting Standard appeared first on Taxmann Blog.

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Editorial Team – [2026] 184 taxmann.com 235 (Article)

1. Introduction

The financial year 2025–26 brings notable developments in the financial reporting framework for entities applying Indian Accounting Standards (Ind AS). The Ministry of Corporate Affairs (MCA), through the Companies (Indian Accounting Standards) Second Amendment Rules, 2025, has introduced amendments to several standards.

Among the changes, certain amendments are particularly significant from a financial reporting and audit perspective. These include the revised guidance on classification of liabilities containing covenants under Ind AS 1, enhanced disclosure requirements relating to supplier finance arrangements under Ind AS 7 and Ind AS 107, and the accounting implications arising from the OECD Pillar Two global minimum tax framework under Ind AS 12.

Additionally, the introduction of the New Labour Codes is expected to have a considerable impact on employee benefit obligations, as the revised definition of wages may increase liabilities related to gratuity and other long-term employee benefits.

In light of these developments, auditors will need to place greater emphasis on evaluating compliance with loan covenants, understanding supplier financing arrangements, assessing potential tax exposures, and reviewing employee benefit valuations while auditing financial statements for the financial year 2025–26.

Let us understand each amendment applicable from the financial year 2025-26 in detail.

2. Amendment to Ind AS 1 – Classification of liabilities as Current or Non-Current

The amendment to Ind AS 1 clarifies that the classification of a liability as current or non-current is determined based on the entity’s right to defer settlement of the liability for at least twelve months after the reporting period, replacing the earlier concept of an “unconditional right”.

The right to defer settlement must exist and have substantive effect as at the reporting date. Such a right may also be subject to compliance with conditions or covenants specified in the loan arrangement. Accordingly, even where the right to defer settlement is conditional, the liability can still be classified as non-current, provided the entity complies with the specified conditions as at the reporting date.

The amendment further clarifies that the classification of liabilities is not affected by management’s intention or expectation to settle the liability within twelve months after the reporting period. Similarly, if the liability is settled after the reporting period but before the approval of the financial statements, the classification remains unchanged. If the entity had the right to defer settlement as at the reporting date, the liability shall continue to be presented as non-current, although appropriate disclosures may be required to inform users about the timing of settlement.

The amendment also addresses situations involving breach of loan covenants. Where an entity breaches a covenant of a long-term borrowing on or before the reporting date and, as a result, the liability becomes payable on demand, the liability must be classified as current. This classification applies even if the lender subsequently agrees, after the reporting period but before approval of the financial statements, not to demand repayment, since the entity did not have the right to defer settlement as at the reporting date.

Overall, the amendment reinforces that the classification of liabilities depends on the rights available to the entity at the reporting date, rather than management’s intentions or events occurring after the reporting period.

Click Here to Understand the Amendment in Detail

2. Amendment to Ind AS 7 – Disclosure of Supplier Finance Arrangements

The amendment to Ind AS 7 introduces new disclosure requirements relating to supplier finance arrangements to enhance transparency about their impact on an entity’s liabilities, cash flows and liquidity risk exposure.

Supplier finance arrangements generally involve one or more finance providers paying the amounts owed by an entity to its suppliers, while the entity settles the payment with the finance provider at the same date as, or later than, the date on which the supplier is paid. Such arrangements may provide the entity with extended payment terms or enable suppliers to receive early payment. These arrangements are commonly referred to as supply chain finance, payables finance or reverse factoring. However, arrangements that merely provide credit enhancement (such as financial guarantees or letters of credit) or instruments used to settle payments directly with suppliers (such as credit cards) are not considered supplier finance arrangements.

To enable users of financial statements to assess the impact of these arrangements, entities are required to provide aggregated disclosures about their supplier finance arrangements. These disclosures include the key terms and conditions of the arrangements, such as extended payment terms or any security or guarantees provided. Where arrangements have dissimilar terms, the entity must disclose them separately.

Entities must also disclose information about the carrying amounts of financial liabilities that form part of supplier finance arrangements, including the relevant balance sheet line items, both at the beginning and end of the reporting period. In addition, entities must disclose the portion of those liabilities for which suppliers have already been paid by the finance providers, as well as the range of payment due dates for such liabilities and comparable trade payables that are not part of supplier finance arrangements. Where payment terms vary widely, additional explanations or stratified ranges should be provided.

Further, entities are required to disclose the nature and impact of non-cash changes in the carrying amounts of such liabilities during the reporting period. Examples include changes arising from business combinations, foreign exchange movements or other transactions that do not involve cash flows.

Overall, the amendment seeks to improve the visibility of supplier finance arrangements and their implications for working capital management and liquidity risk, thereby enabling users of financial statements to better understand the entity’s financing structure.

Click Here to Understand the Amendment in Detail

Click Here To Read The Full Article

The post Ind AS Amendments for FY 2025–26 | Key Audit Considerations appeared first on Taxmann Blog.

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Press Release No.16/2026, Dated 11.03.2026

The Securities and Exchange Board of India (SEBI) has introduced a lighter certification requirement for Persons Associated with Research Services (PARS) who are engaged in sales and other non-core activities related to research services.

The revised framework aims to ease compliance requirements while ensuring that such personnel possess a basic understanding of regulatory obligations.

1. New Certification Requirement

Under the revised framework, PARS engaged in sales or other non-core research services must obtain certification by passing the NISM Series-XXV-A examination.

This certification module is designed to be simplified and more relevant for individuals whose roles do not involve core research activities such as preparing or issuing research reports.

2. Transition for Existing Certification Holders

SEBI has also provided a transitional relaxation for individuals who already hold the NISM Series-XV certification.

Such PARS are not required to obtain the new certification immediately. Instead, they may obtain the NISM Series-XXV-A certification upon expiry of the validity of their existing Series-XV certification.

3. Objective of the Revised Framework

The introduction of the lighter certification module aims to:

• Reduce regulatory burden for personnel involved in non-core research-related activities
• Ensure appropriate skill and knowledge standards through a simplified certification
• Align certification requirements with the nature of roles performed by PARS
• Promote ease of compliance while maintaining regulatory oversight in research services.

Click Here To Read The Full Press Release

The post SEBI Introduces Lighter NISM Certification for PARS appeared first on Taxmann Blog.

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