Editorial Team – [2025] 181 taxmann.com 847 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week:

1. OECD Issues Updated FAQs on CRS and CARF

The OECD has published updated FAQs on the application of the Common Reporting Standard (CRS) and the Crypto-Asset Reporting Framework (CARF).

These FAQs are intended to promote uniform and consistent implementation of the OECD’s International Standards for Automatic Exchange of Information in Tax Matters. The questions reflected in the FAQs were raised by business representatives and government delegates, and newly added or revised FAQs are marked in yellow.

Source:

• Common Reporting Standard (CRS)
• Crypto-Asset Reporting Framework (CARF)

2. Israel Proposes R&D Tax Credit to Preserve Incentives under OECD Pillar Two Global Minimum Tax Rules

Israel has initiated a public consultation on draft legislation to safeguard R&D tax incentives within the global minimum tax regime. The Israeli Ministry of Finance has, with effect from 14 December 2025, invited public comments on a draft memorandum proposing the introduction of an R&D tax credit that will remain operative under the OECD/G20 Inclusive Framework’s global minimum tax rules (Pillar Two/GloBE).

Under the draft proposal, an R&D tax credit linked to qualifying domestic R&D expenditure would be available to knowledge-intensive companies, with credit rates varying by plant location category—15% for “Group A” locations and 2% for “Group B” locations. The proposal further provides for enhanced credit rates, up to 30% for Group A and 4% for Group B, for specified categories of resident companies that are members of a multinational enterprise group exceeding a prescribed threshold.

In the Pillar Two context, the OECD’s GloBE rules generally treat Qualified Refundable Tax Credits as income, rather than as a reduction of covered taxes, when calculating the Pillar Two effective tax rate. Consequently, jurisdictions have been restructuring tax incentives to align them with the QRTC framework.

Source – Public Consultation

Click Here To Read The Full Article

The post [World Tax News] OECD Issues Updated FAQs on CRS and CARF and More appeared first on Taxmann Blog.

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Circular No. HO/38/11/11(3)2025-MIRSD-POD/I/1101/2025, Dated 24.12.2025

1. Regulatory Background

The Securities and Exchange Board of India (SEBI) has directed further enhancements to the Facility for Basic Services Demat Account (BSDA) with the objective of strengthening financial inclusion, ensuring fair classification of investors, and preventing inadvertent migration of eligible investors to regular demat accounts.

The revised framework introduces clarifications on valuation, exclusions from threshold computation, periodic eligibility review, and investor consent requirements.

2. Key Enhancements to the BSDA Framework

2.1 Exclusion of Certain Securities From BSDA Threshold

SEBI has clarified that the following securities shall not be considered while computing the value threshold for BSDA eligibility:

• Zero Coupon Zero Principal (ZCZP) Bonds
• Delisted Securities

This exclusion ensures that investors holding such instruments are not disqualified from BSDA eligibility due to non-tradable or special-purpose securities.

2.2 Valuation of Illiquid Securities

The framework provides clarity on the valuation methodology for illiquid securities held in demat accounts for BSDA eligibility determination.

This ensures:

• Uniform valuation practices across Depository Participants (DPs)
• Prevention of arbitrary or inflated valuation of non-liquid holdings
• Fair and transparent assessment of investor eligibility

2.3 Mandatory Quarterly Reassessment by Depository Participants

SEBI has mandated that:

• Depository Participants must reassess BSDA eligibility on a quarterly basis
• Eligibility must be determined based on the value of holdings as per the prescribed framework

This periodic review ensures:

• Continued availability of BSDA benefits to eligible investors
• Timely migration only where thresholds are genuinely breached
• Ongoing accuracy in investor classification

2.4 Active and Verifiable Investor Consent for Regular Demat Accounts

To strengthen investor protection, SEBI has directed that:

• Investors opting for regular demat accounts instead of BSDA must provide Active, explicit, and verifiable consent
• Passive consent, default migration, or implied acceptance is not permitted

This ensures that investors:

• Are fully informed of cost implications
• Make a conscious and documented choice
• Are not automatically shifted to higher-cost demat accounts

3. Effective Date

• The enhanced BSDA framework shall come into effect from March 31, 2026

DPs are required to complete system and process readiness well before the effective date.

4. Regulatory Intent

SEBI’s measures aim to:

• Strengthen the original objective of BSDA as a low-cost demat facility
• Prevent unintended exclusion of small investors
• Improve transparency, consistency, and fairness in eligibility determination
• Enhance investor autonomy and consent-based decision-making
• Align demat account practices with consumer protection principles

5. Implications for Stakeholders

5.1 For Investors

• Continued access to BSDA benefits despite holding ZCZP bonds or delisted securities
• Clearer valuation norms and protection from forced account upgrades
• Greater control through mandatory consent requirements

5.2 For Depository Participants

Need to:

• Update systems for quarterly eligibility checks
• Exclude specified securities from threshold computation
• Implement robust consent capture and audit trails

• Revise internal SOPs, disclosures, and investor communication

6. Key Takeaway

SEBI’s enhanced BSDA framework strengthens investor protection and inclusion by refining eligibility calculations, mandating periodic reassessment, excluding non-relevant securities, and ensuring explicit investor consent—with all changes effective from March 31, 2026.

Click Here To Read The Full Circular

The post SEBI Updates BSDA Norms on Valuation | Exclusions | Eligibility Review appeared first on Taxmann Blog.

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Circular No. HO/38/13/11(3)2025-MIRSD-POD/I/1102/2025, Dated 24.12.2025

1. Regulatory Background

The Securities and Exchange Board of India (SEBI) has reviewed and streamlined the procedure and documentation requirements for issuance of duplicate securities. The objective is to simplify, standardise, and expedite the process for investors while ensuring adequate safeguards.

2. Key Reforms Introduced

2.1 Higher Threshold for Simplified Documentation

• The monetary threshold for availing simplified documentation has been increased from ₹5 lakh to ₹10 lakh.
• This expansion allows a larger number of investors to benefit from a faster, less onerous process for obtaining duplicate securities.

2.2 Standardised Affidavit-cum-Indemnity

• SEBI has prescribed a standardised affidavit-cum-indemnity format.
• This replaces varied formats previously demanded by different intermediaries, ensuring uniformity and clarity across issuers, RTAs, and depositories.

2.3 Rationalisation for Higher-Value Securities

• For cases involving securities exceeding ₹10 lakh, documentation requirements have been rationalised.
• The revised framework removes duplication and unnecessary procedural steps while retaining appropriate risk controls.

2.4 Dispensing With Notarisation for Low-Value Cases

• Notarisation requirements have been dispensed with for low-value cases falling within the simplified threshold.
• This reduces cost, time, and logistical hurdles for investors.

3. Applicability and Effective Date

• The revised framework applies with immediate effect.
• All market intermediaries are required to adopt the updated procedures forthwith.

4. Regulatory Intent

SEBI’s reforms aim to:

• Enhance investor convenience and service standards
• Reduce processing time and compliance friction
• Ensure uniform practices across market infrastructure institutions
• Balance ease of doing business with adequate investor protection

5. Implications for Stakeholders

For Investors

• Faster and simpler issuance of duplicate securities
• Reduced paperwork and costs, especially for lower-value holdings
• Greater predictability through standardised formats

For Issuers, RTAs and Depositories

• Need to update SOPs, checklists, and customer communication
• Implement the standard affidavit-cum-indemnity
• Ensure immediate compliance with revised thresholds and documentation norms

6. Key Takeaway

SEBI’s revised framework significantly simplifies and standardises the issuance of duplicate securities by increasing the simplified-documentation threshold to ₹10 lakh, introducing a uniform affidavit-cum-indemnity, rationalising higher-value documentation, and removing notarisation for low-value cases—effective immediately.

Click Here To Read The Full Circular

The post SEBI Simplifies Issuance of Duplicate Securities Procedure appeared first on Taxmann Blog.

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Press Release, dated 23-12-2025

1. Background

The Central Board of Direct Taxes (CBDT) has identified a set of cases for Assessment Year (AY) 2025–26 where taxpayers appear to have claimed ineligible refunds by availing deductions or exemptions to which they are not entitled.

The initiative forms part of CBDT’s Non-intrusive Usage of Data to Guide and Enable (NUDGE) campaign, which emphasises voluntary compliance through data-driven guidance rather than immediate enforcement.

2. Nature of Issues Identified

Based on data analytics and risk assessment, CBDT has flagged instances involving:

• Bogus or doubtful donations claimed as deductions, including donations to Registered Unrecognised Political Parties (RUPPs)
• Other ineligible deductions or exemptions claimed in Income-tax Returns (ITRs)
• Quotation of incorrect or invalid PANs of donees
• Errors in quantum of deduction or exemption claimed

These discrepancies have resulted in ineligible refund claims for the relevant assessment year.

3. NUDGE Campaign – Taxpayer-Friendly Outreach

CBDT has initiated targeted outreach to affected taxpayers through:

• SMS alerts, and
• Email advisories sent to registered contact details

The communication encourages taxpayers to review their ITRs and voluntarily correct errors, if any.

4. Opportunity to Revise Returns

Taxpayers have been provided a clear window to regularise their filings:

• Last date to file a revised return for AY 2025–26 – 31 December 2025

Taxpayers are advised to:

• Re-examine deduction and exemption claims
• Verify the genuineness of donee entities and correctness of PAN details
• Revise the return where any claim is found to be incorrect or ineligible

Timely revision can help avoid further enquiries, scrutiny, or follow-up action.

5. What Happens After 31 December 2025

• Taxpayers who miss the revision window may still file an updated return
• Updated returns can be filed from 1 January 2026, but they will be subject to additional tax as prescribed under the Act

6. No Action Needed for Correct Claims

CBDT has clarified that:

• Taxpayers whose claims are correct and lawful need not take any action
• The NUDGE communications are advisory and targeted only at cases with identified risk indicators

7. Progress and Impact of the NUDGE Approach

CBDT highlighted encouraging compliance outcomes under the NUDGE framework:

• Over 21 lakh taxpayers updated their ITRs for AYs 2021–22 to 2024–25
• More than ₹2,500 crore paid through voluntary updates
• Over 15 lakh returns already revised for AY 2025–26

This demonstrates strong taxpayer participation and the effectiveness of non-intrusive, guidance-based compliance measures.

8. Regulatory Intent

The initiative seeks to:

• Promote voluntary and timely compliance
• Reduce disputes, litigation, and enforcement burden
• Use advanced data analytics for early risk identification
• Encourage taxpayers to self-correct without fear of immediate penal action

9. Key Takeaways for Taxpayers

• Review ITRs for AY 2025–26 if you receive an SMS/email from CBDT
• Verify all deduction and exemption claims, especially donation-related claims
• File a revised return by 31 December 2025, if required
• Maintain correct PAN and documentation for all donees
• Missing the revision window may lead to higher tax cost under the updated return route

Click Here To Read The Full Press Release

The post CBDT Encourages Taxpayers to Review and Correct Ineligible Deduction/Exemption Claims appeared first on Taxmann Blog.

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Press Release Dated 23.12.2025

1. Regulatory Context

The International Financial Services Centres Authority (IFSCA), at its 26th meeting held on December 22, 2025, approved a series of amendments across multiple regulatory frameworks governing financial activities in GIFT IFSC.

These amendments reflect IFSCA’s continued effort to refine regulations based on industry feedback, address operational bottlenecks, and strengthen GIFT IFSC’s position as a global hub for high-value financial services.

2. Regulatory Frameworks Covered

The approvals span amendments across the following key regulatory domains:

• Fund Management Framework
• Capital Market Intermediaries
• Global In-House Centres (GICs)
• Book-keeping, Accounting, Taxation and Financial Crime Compliance (BATF) Services

Each set of amendments is tailored to the unique operational and compliance challenges faced by entities operating in IFSC.

3. Key Objectives of the Amendments

The regulatory changes aim to:

• Address operational challenges encountered by regulated entities
• Enhance ease of doing business through simplification and procedural clarity
• Provide greater regulatory flexibility without diluting supervisory oversight
• Support the scaling and diversification of high-value financial services
• Improve regulatory alignment with global best practices

4. Focus Areas of Reform

4.1 Fund Management

Amendments in the fund management framework are designed to:

• Improve operational efficiency for fund managers
• Facilitate product innovation and fund structuring
• Enhance investor access and cross-border fund flows

4.2 Capital Market Intermediaries

Changes relating to capital market intermediaries focus on:

• Streamlining registration and compliance processes
• Reducing procedural friction
• Supporting market development and intermediary participation in IFSC

4.3 Global In-House Centres (GICs)

The approved amendments seek to:

• Strengthen GIFT IFSC’s attractiveness as a destination for GICs
• Enable financial institutions to centralise high-value functions such as risk, treasury, analytics, compliance, and operations
• Provide clarity on permissible activities and regulatory expectations

4.4 BATF Services (Book-keeping, Accounting, Taxation & Financial Crime Compliance)

For BATF service providers, the amendments aim to:

• Encourage growth of specialised professional services in IFSC
• Provide regulatory certainty for outsourced and shared services
• Support development of compliance, AML/CFT, and financial crime risk management ecosystems

5. Strategic Significance for GIFT IFSC

The approvals reinforce IFSCA’s strategy to:

• Position GIFT IFSC as a globally competitive financial centre
• Attract international capital, institutions, and talent
• Promote innovation while maintaining robust regulatory standards
• Build a deep ecosystem covering funds, markets, intermediaries, and professional services

6. Next Steps

Detailed notifications, circulars, or amendments to regulations are expected to be issued by IFSCA to operationalise the approved changes. Regulated entities should closely monitor:

• Final regulatory texts
• Transitional provisions, if any
• Effective dates and compliance timelines

7. Key Takeaway

At its 26th meeting, IFSCA approved multi-sector regulatory amendments aimed at enhancing flexibility, operational ease, and growth potential across fund management, capital markets, GICs, and professional services—further strengthening GIFT IFSC’s role as a premier international financial hub.

Click Here To Read The Full Press Release

The post IFSCA Approves Regulatory Relaxations Across Funds | Intermediaries | GICs appeared first on Taxmann Blog.

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Parallel proceedings and supply under GST refer to two key concepts governing administration and levy of tax under the CGST Act, 2017. Parallel proceedings relate to the restriction on Central and State tax authorities from simultaneously initiating adjudicatory proceedings on the same subject matter, same contravention, and same tax liability once formal proceedings have commenced by one authority, as provided under Section 6(2) of the CGST Act. Supply, on the other hand, is the foundational basis for levy of GST and encompasses all forms of supply of goods or services such as sale, transfer, barter, exchange, license, rental, or lease made for consideration in the course or furtherance of business, subject to statutory inclusions and exclusions under Section 7 and Schedules II and III, which exclude transactions like transfer of immovable property and activities governed by the principle of mutuality.

Table of Contents

1. Parallel Proceedings
2. Supply

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1. Parallel Proceedings

Armour Security (India) Ltd. Versus Commissioner CGST, Delhi – Supreme Court

Special Leave Petition (C) No. 6092 of 2025 date 14.08.2025 2025 SCC OnLine SC 1700

Issue – The following issues were for consideration before the Hon’ble Supreme Court:

1. Whether issuance of summons can be regarded as “initiation of proceedings” within the meaning of Section 6(2)(b) of the CGST Act?
2. Whether “subject matter” within the meaning of Section 6(2)(b) of the CGST Act includes all matters dealt with in summons under the Act?
3. What is the purport of an “Order” under Section 6(2)(a) of the CGST Act?

Ruling – The Hon’ble Supreme Court held as follows:

1. Clause (b) of sub-section (2) of Section 6 of the CGST Act and the equivalent State enactments bars the “initiation of any proceedings” on the “same subject matter”.
2. Any action arising from the audit of accounts or detailed scrutiny of returns must be initiated by the tax administration to which the taxpayer is assigned.
3. Intelligence based enforcement action can be initiated by any one of the Central or the State tax administrations despite the taxpayer having been assigned to the other administration.
4. Parallel proceedings should not be initiated by other tax administration when one of the tax administrations has already initiated intelligence-based enforcement action.
5. All actions that are initiated as a measure for probing an inquiry or gathering of evidence or information do not constitute “proceedings” within the meaning of Section 6(2)(b) of the CGST Act.
6. The expression “initiation of any proceedings” occurring in Section 6(2)(b) refers to the formal commencement of adjudicatory proceedings by way of issuance of a show cause notice, and does not encompass the issuance of summons, or the conduct of any search, or seizure etc.
7. The expression “subject matter” refers to any tax liability, deficiency, or obligation arising from any particular contravention which the Department seeks to assess or recover.
8. Where any two proceedings initiated by the Department seek to assess or recover an identical or a partial overlap in the tax liability, deficiency or obligation arising from any particular contravention, the bar of Section 6(2)(b) would be immediately attracted.
9. Where the proceedings concern distinct infractions, the same would not constitute a “same subject matter” even if the tax liability, deficiency, or obligation is same or similar, and the bar under Section 6(2)(b) would not be attracted.
10. The twofold test for determining whether a subject matter is “same” entails, first, determining if an authority has already proceeded on an identical liability of tax or alleged offence by the assessee on the same facts, and secondly, if the demand or relief sought is identical.

The Hon’ble Supreme Court issued following guidelines to be followed in cases where, after the commencement of an inquiry or investigation by one authority, another inquiry or investigation on the same subject matter is initiated by a different authority.

1. Where a summons or a show cause notice is issued by either the Central or the State tax authority to an assessee, the assessee is, in the first instance, obliged to comply by appearing and furnishing the requisite response, as the case may be. We say, so because, mere issuance of a summons does not enable either the issuing authority or the recipient to ascertain that proceedings have been initiated.
2. Where an assessee becomes aware that the matter being inquired into or investigated is already the subject of an inquiry or investigation by another authority, the assessee shall forthwith inform, in writing, the authority that has initiated the subsequent inquiry or investigation.
3. Upon receipt of such intimation from the assessee, the respective tax authorities shall communicate with each other to verify the veracity of the assessee’s claim. We say, so as this course of action would obviate needless duplication of proceedings and ensure optimal utilisation of the Department’s time, effort, and resources, bearing in mind that action initiated by one authority enures to benefit of all.
4. If the claim of the taxable person regarding the overlap of inquiries is found untenable, and the investigations of the two authorities pertain to different “subject matters”, an intimation to this effect, along with the reasons and a specification of the distinct subject matters, shall be immediately conveyed in writing to the taxable person.
5. The taxing authorities are well within their rights to conduct an inquiry or investigation until it is ascertained that both authorities are examining the identical liability to be discharged, the same contravention alleged, or the issuance of a show cause notice. Any show cause notice issued in respect of a liability already covered by an existing show cause notice shall be quashed.
6. However, if the Central or the State tax authority, as the case may be finds that the matter being inquired into or investigated by it is already the subject of inquiry or investigation by another authority, both authorities shall decide inter se which of them shall continue with the inquiry or investigation. In such a scenario the other authority shall duly forward all material and information relating to its inquiry or investigation into the matter to the authority designated to carry the inquiry or investigation to its logical conclusion. We say, so because, the taxable person except for being afforded the statutory protection from duplication of proceedings, otherwise has no locus to claim which authority should proceed with the inquiry or investigation in a particular matter.
7. However, where the authorities are unable to reach a decision as to which of them shall continue with the inquiry or investigation, then in such circumstances, the authority that first initiated the inquiry or investigation shall be empowered to carry it to its logical conclusion, and the courts in such a case would be competent to pass an order for transferring the inquiry or investigation to that authority.
8. If it is found that the authorities are not complying with these aforementioned guidelines, it shall be open to the taxable person to file a writ petition before the concerned High Court under Article 226 of the Constitution of India.
9. At the same time, taxable persons shall ensure complete cooperation with the authorities. It is incumbent upon them to appear in response to a summons and/or reply to a notice.

2. Supply

2.1 Principle of Mutuality

Indian Medical Association Versus Union of India – Kerala High Court

W.A.NO.1659 of 2024 date 11.04.2025 [2025] 173 taxmann.com 474 (Ker.)

2025 SCC OnLine Ker 2331

In Favour of Assessee

Issue – The petitioner runs various mutual Schemes for the benefit of its member-doctors, e.g. Social Security Schemes or SSS (I, II, and III), Professional Disability Support Scheme (PDSS), Professional Protection Scheme, Kerala Health Scheme, etc. All the Schemes are to support fellow doctors, while one or two Schemes support their immediate family members. The member-doctors contribute an admission/annual fee, and in cases of certain Schemes (e.g. SSS, PDSS) also a fraternity contribution upon the death/disability of a fellow member doctor; the pooled sum is paid out to the widow of deceased doctors, disabled doctors, doctors afflicted with specified diseases, etc.

The question which was placed before the High Court was whether the Association is liable to pay GST on services rendered by it to its members under the aforesaid Schemes? In this background, the Petitioner challenged Constitutional validity of insertion Section 7(1)(aa) and Explanation thereto and its retrospective effect from July 01, 2017.

Ruling – The Hon’ble High Court held as follows:

1. The Constitution has not been amended to deem a supply of service by a club or association to its members as a taxable service for the purposes of GST. The decision of the Supreme Court in State of West Bengal v. Calcutta Club Ltd. – [(2019) 19 SCC 107]/[2019] 110 taxmann.com 47 is authority for the proposition that the principle of mutuality has survived under the Constitution even after the 46th Amendment. A phrase as understood under the Constitution cannot be statutorily expanded by any legislature since the power to legislate is itself one that is conferred by the Constitution.
2. The concepts of “supply” and “service” having been judicially interpreted as requiring at least two persons – a provider and a recipient, for inferring their existence, and the Supreme Court having held in Calcutta Club that the principle of mutuality has survived the 46th amendment to the Constitution. As the said judgment holds as a binding precedent and the Constitution is not amended suitably to remove the concept of mutuality from the concepts of supply and service thereunder, the impugned amendment to the CGST/SGST Acts necessarily fails the test of constitutionality.
3. The provisions of Section 2(17)(e) and Section 7(1)(aa) and the Explanation thereto of the CGST Act, 2017 and the provisions of Section 2(17)(e) and Section 7(1)(aa) and the Explanation thereto of the KGST Act are declared as unconstitutional and void being ultra vires the provisions of Article 246A read with Article 366 (12A) and Article 265 of the Constitution of India.
4. Retrospective operation to be illegal. The insertion of a statutory provision that alters the basis of indirect taxation with retrospective effect, so as to tax persons for a prior period when they had not anticipated such a levy and, consequently, had not obtained an opportunity to collect the tax from the recipient of their services, militates against the concept of Rule of Law.

2.2 Compensation Received Towards Acquisition of Land

Smt. Asha R, Versus Assistant Commissioner of Commercial Taxes (Enforcement-17), Bangalore – Karnataka High Court

Writ Petition No. 2552 of 2024 (T-IT) date 10.09.2024 [2025] 173 taxmann.com 863 (Kar.)

In Favour of Assessee

Issue – The petitioners were owners of immovable properties which were acquired by the KIADB for the benefit of the BMRCL for the purpose of construction of Bangalore Metro Rail Project under the provisions contained in Section 28 of the KIAD Act. In pursuance of the same, the BMRCL offered package compensation to the petitioners, who accepted the same and entered into Agreements with the KIADB under Section 29(2) of the KIAD Act and received compensation towards acquisition of the lands. Subsequently, the revenue issued show cause notices calling upon the petitioners to pay GST towards the solatium component of the package compensation received by the petitioners. The petitioners having issued replies to the impugned show cause notices, the respondents passed the orders in original upholding and confirming the demands as per the impugned show cause notices. The issue before the High Court was whether the compensation paid in favour of the petitioners towards acquisition of their lands by the State/KIADB under the head ‘Solatium’ is exigible/amenable to levy of GST under the provisions of CGST/KGST Act, 2017?

Ruling – The Hon’ble High Court held as follows:

1. Neither the agreements nor other documents entered into between the petitioners and KIADB indicate that the petitioners have been paid solatium towards compensation received by them from the KIADB. In fact, it is only in the package compensation offered by the BMRCL that it chose to split up the compensation offered to the petitioners under various heads by designating solatium under one head amongst several heads of compensation; merely because the package compensation offered by the BMRCL is split into various heads, the compensation offered by the BMRCL under the designated head “Solatium” cannot be construed or treated or understood as solatium in the real sense of the term/expression “solatium” either under the Land Acquisition Act, 1894 (for short ‘the L.A. Act’), Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (for short ‘the RFCTLARR Act’).
2. Though the BMRCL categorised a particular component of the consideration offered by them to the petitioners as solatium, in reality, the transaction essentially entered into between petitioners and KIADB under Section 29 (2) of the KIAD Act was in the nature of a sale/transfer of all rights in land of the petitioners which was directly and squarely exempted from levy of GST under Entry 5 of the Schedule – III of the CGST/KGST Act, since compulsory acquisitions of land where the owners lose their entire right on the property is akin to sale and ought to be treated as such and on this score also, the impugned orders, notices etc., deserve to be quashed.
3. The primary/main ground for levying GST on solatium by the respondents is by contending that the act of the petitioners in receiving the solatium component tantamount to agreeing to an obligation to tolerate the act of acquisition within the meaning of Entry 5(e) of the CGST/KGST Act; in this regard, it is relevant to state that the entire compensation including the solatium component having been received by the petitioners pursuant to various documents executed by them in favour of the KIADB would clearly not amount to agreeing to an obligation to tolerate acquisition; in fact, rather than tolerating acquisition of their lands, petitioners have undisputedly executed various documents in favour of KIADB relinquishing/transferring/selling their right over the lands after receiving monetary compensation and neither these transactions nor any act, deed or thing done by the petitioners in this regard would amount to agreeing to the obligation to tolerate an act by the petitioners so as to attract Entry 5(e) of Schedule – II and consequently, on this ground also, the contention of the respondents cannot be accepted.
4. The Hon’ble High Court held that the compensation paid in favour of the petitioners towards acquisition of their lands by the State/KIADB under the Head ‘Solatium’ is not exigible/amenable to levy of GST under the provisions of CGST/KGST Act, 2017.

2.3 Assignment of Leasehold Rights of the Plot of Land Allotted by GIDC

Gujarat Chamber of Commerce and Industry Versus Union of India – Gujarat High Court

R/Special Civil Application No. 11345 of 2023 date 03.01.2025

2025 SCC OnLine Guj 537/[2025] 170 taxmann.com 251

In Favour of Assessee

Issue – Whether the assignment or transfer of leasehold rights in plots of land allotted by the Gujarat Industrial Development Corporation (GIDC) for 99 years, along with buildings constructed thereon, by the lessee/assignor to a third party/assignee for a lump-sum consideration constitutes a “supply of services” under the Central/State Goods and Services Tax Act, 2017 (GST Act), thereby attracting GST under Section 9(1).

Ruling – The Hon’ble High Court held as follows:

1. Section 7 of the GST Act which provides for the scope of supply of good or services or both for the purpose of the GST Act includes all forms of supply of goods or services or both by any form such as transfer, sale, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. Therefore, considering the settled legal position as held by the Hon’ble Supreme Court and other High Courts from time to time, it is true that any lease or letting out of a building including commercial, industrial, residential complex for business either wholly or partly would be “supply of service”. Therefore, reading the provisions of the Act together and harmoniously to understand the nature of levy and the object and purpose of its imposition, no activity of the nature mentioned in the inclusive provision of section 7 of the GST Act can be left out of the net of tax. Simultaneously, the provisions of section 7 have to be read in terms of substantive provision and Schedules which treats the activity as supply of service, particularly, in relation to land and building and includes a lease. The consideration, therefore, as premium/one time premium is a measure on which tax is to be levied, assessed and recovered.
2. When the GIDC allots the plot of land on lease of 99 years and charges premium for such allotment followed by periodical lease rent to be paid, is to be considered as supply of service in relation to land and building read with clause 5(a) of Schedule II which specifically provides that renting of immovable property shall be treated as supply of services.
3. However, when such leasehold right is transferred by the lessee-assignor in favour of a third person-assignee by execution of deed of assignment, it would be nothing but transfer of an “immovable property” in view of the settled legal position to the effect that lease for 99 years or for a long-term in consideration of premium paid is as much an alienation as sale or mortgage.
4. Scope of “supply of services” would not include transfer of leasehold rights as supply of service as it would be transfer of “immovable property” being a benefit arising out of immovable property consisting of land and building.
5. Assignment by sale and transfer of leasehold rights of the plot of land allotted by GIDC to the lessee in favour of third party-assignee for a consideration shall be assignment/sale/transfer of benefits arising out of “immovable property” by the lessee-assignor in favour of third party-assignee who would become lessee of GIDC in place of original allottee-lessee. In such circumstances, provisions of section 7(1)(a) of the GST Act providing for scope of supply read with clause 5(b) of Schedule II and Clause 5 of Schedule III would not be applicable to such transaction of assignment of leasehold rights of land and building and same would not be subject to levy of GST as provided under section 9 of the GST Act.

2.4 Sale of Partially Constructed Building

Rohan Corporation India Pvt. Ltd. Versus Union of India – Karnataka High Court

Writ Petition No. 12700 of 2023 (T-RES) date 10.09.2024/[2025] 173 taxmann.com 480 (Kar.)

In Favour of Assessee

Issue – Lotus Shopping Centres Private Limited was constructing a mall named Lotus Shopping Mall. During the pendency of the construction of the mall, there were insolvency proceedings initiated against the said company. NCLT appointed a liquidator and issued directions to him to liquidate the assets of the company in terms of the provisions contained in the Insolvency and Bankruptcy Code, 2016. The Liquidator invited tenders for sale of the property. On the basis of this invitation, the petitioner submitted the expression of interest and participated in the e-auction and the petitioner emerged to be the successful bidder. Liquidator intimated the payments to be done by the petitioner and also included the payment of GST, to which the petitioner resisted. Petitioner reiterating its stand that no GST was payable on the transaction of sale of land and partly constructed commercial building as the same was neither supply of goods nor supply of service in terms of Schedule III of GST Act. Due to paucity of time to complete the sale transaction, the Petitioner paid GST under protest reserving right to claim refund. Petitioner filed refund of with the GST department. Refund was rejected by holding that Entry 5(b) of Schedule II of the CGST/KGST Act was applicable to the subject transaction which was amenable/exigible to levy of GST and that Entry 5 of Schedule III which grants/provides exemption from levy/payment of GST was not applicable to the subject transaction.

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Editorial Team – [2025] 181 taxmann.com 816 (Article)

World Corporate Law News provides a weekly snapshot of corporate law developments from around the globe. Here’s a glimpse of the key corporate law update this week.

1. Securities Law

1.1 ASIC Announces Transformational Package to Safeguard Australia’s Financial Markets in Response to ASX Inquiry Interim Report

On December 15, 2025, the Australian Securities and Investments Commission (ASIC) obtained commitments from ASX Group on a package of reforms, including:

(a) Strengthening the independence and governance of ASX’s Clearing and Settlement Facilities Boards

(b) A strategic reset of ASX’s transformation program ‘Accelerate’, with clear milestones and accountability for delivery

(c) The imposition of an additional $150 million capital charge on ASX Limited to ensure ASX maintains strong financial resources until remediation is complete.

(d) A commitment to stronger leadership

In addition, ASIC and the Reserve Bank of Australia (RBA) will step up their review to uplift their joint supervisory model.

The package is intended to strengthen confidence in ASX and Australia’s critical market infrastructure, provide certainty about the market operator’s reset, and respond to the panel’s Interim Report released today.

The inquiry, announced in June 2025 and led by an expert panel, has identified shortcomings in ASX’s governance, capability, risk management and culture that require urgent attention and response. Due to the urgency of the necessary reset, the Report’s insights were shared with ASIC, which then engaged with ASX.

The report concludes that, while some progress has been made, continuing with the same approach is not an option. The scale of transformation required is significant and cannot be achieved through current tactical, incremental measures or business as usual practices.

ASIC Chair Joe Longo stated that urgent action was needed to set ASX on the right path.

‘ASX needs to embrace a new era of accountability, investment, and stewardship to increase confidence, and meet the expectations of the market and the Australian public.

‘This package is a circuit-breaker.

‘Many of the problems the report identifies took years to develop, and while there are some immediate actions that will be put in place, the key issues are going to take time and resources to resolve. There are no quick fixes or shortcuts.

‘This reset is about addressing underlying issues, and laying the foundations for a resilient, world-class market operator.

‘This should be a clear signal to the market that ASX are committed to delivering the transformation necessary for resilient and future-ready national market infrastructure.’

Source – Official Announcement

Click Here To Read The Full Article

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Case Details: 63 Ideas Infolabs (P.) Ltd., In re - [2025] 181 taxmann.com 431 (AAR-GUJARAT)

Judiciary and Counsel Details

• Sushma Vora & Vishal Malani, Member
• N.R. Badrinath for the Applicant.

Facts of the Case

The applicant engaged in wholesale trading of agricultural produce and staples across India, had developed a supply chain management platform accessible through its website. It was submitted that consideration for such supply of services would be received from foreign clients in the form of non-voting, irredeemable preference shares issued by the overseas entity. The applicant sought an advance ruling on whether receipt of consideration in such form would fulfil the requirement of receipt of consideration in convertible foreign exchange and, consequently, whether there would be no liability to pay GST on the supply of services to overseas clients. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the primary issue raised by the applicant pertained to whether export proceeds received in the form of non-voting, irredeemable preference shares of a foreign entity satisfy the condition of receipt of consideration in convertible foreign exchange as per Section 2(6) of the IGST Act. It was held that this foundational question does not fall within the scope of matters on which an advance ruling can be pronounced under Section 97 of the CGST Act. It was further held that unless the primary issue relating to convertible foreign exchange is decided, the consequential question regarding GST liability on the supply of services cannot be examined.

List of Cases Referred to

• Malabar Gold (P) Ltd., In re [2023] 78 GSTL 129 (AAR-GST-Ker) (para 5)
• J.B. Boda & Co. (P.) Ltd. v. CBDT [1996] 89 Taxman 311 (SC) (para 5).

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1. Introduction

Indian Accounting Standards (Ind AS) are largely converged with the IFRS Standards issued by the International Accounting Standards Board (IASB) of the IFRS Foundation. To ensure transparency and global participation in its standard setting process, the IASB follows a rigorous due process, which includes issuing consultative documents such as exposure drafts and inviting public comments from stakeholders worldwide.

The Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) actively encourages its stakeholders to participate in this process. By inviting comments on IASB consultative documents, the ASB provides an opportunity to identify practical challenges, industry-specific concerns and implementation issues at an early stage.

2. Exposure Draft on Risk Mitigation Accounting Including Proposed Amendments to IFRS 9 and IFRS 7

The exposure draft issued by IASB has proposed amendment to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures. Under the said exposure draft, the IASB focuses on addressing challenges faced by entities, particularly financial institutions, in accounting for re-pricing risk (such as interest rate risk) when it is managed on a net basis rather than on an individual instrument basis. Further, it is also requiring companies to disclose its strategy for managing re-pricing risk and the effects of its risk management activities.

2.1 Condition for Application of Risk Mitigation Accounting

To ensure that risk mitigation accounting provides useful information to users of financial statements, an entity is permitted to apply risk mitigation accounting if, and only if:

• the entity’s business activities give rise to the recognition and de-recognition of financial instruments that expose it to re-pricing risk
• the entity’s risk management strategy specifies risk limits within which re-pricing risk, based on a mitigated rate, is to be mitigated
• the entity mitigates re-pricing risk arising from underlying portfolios on a net basis using derivatives in accordance with its risk management strategy.

2.2 Disclosures to Be Made in Respect of Risk Mitigation Accounting

The proposed amendments emphasise the importance of transparent and decision-useful disclosures in respect of risk mitigation accounting. These disclosures are intended to enable users of financial statements to understand an entity’s strategy for managing re-pricing risk, the rationale for applying risk mitigation accounting, and the effects of such risk management activities on the entity’s financial position and performance.An entity shall disclose following information regarding risk mitigation accounting separately from other line items:

(a) the risk mitigation adjustment recognised either as part of the entity’s assets (when it has a debit balance) or as part of its liabilities (when it has a credit balance) in the statement of financial position

(b) the amount of the risk mitigation adjustment recognised in profit or loss during the reporting period in the statement of comprehensive income.

3. Why This Matters for Indian Stakeholders?

Although the proposals are currently at the IFRS level, they are highly relevant for Indian entities, especially banks, NBFCs and other financial institutions, given the close alignment between Ind AS and IFRS. Early awareness and participation will help stakeholders in following aspects:

(a) anticipate potential future amendments to Ind AS

(b) assess system, process and data implications;

(c) provide India-specific feedback based on local market practices and regulatory environment.

Click Here To Read The Full Story

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Basic Services Demat Account (BSDA) is a low-cost dematerialised securities account introduced to promote financial inclusion and encourage retail investors to hold securities in electronic form. It offers limited but essential demat services at reduced or nil annual maintenance charges, subject to prescribed eligibility conditions such as individual holding, single demat account, and a capped value of securities held, as specified by SEBI.

Table of Contents

1. Introduction to Basic Services Demat Account (BSDA)
2. Operations of a Joint Account
3. Internet Based Depository Operations of NSDL

Check out Taxmann's Depository Operations which offers a clear, authoritative, and practice-focused understanding of India's depository ecosystem, explaining its institutional architecture, regulatory framework, and the full lifecycle of electronic securities. It distils complex processes—such as account opening, KYC, dematerialisation, settlements, pledging, and corporate actions—into structured, accessible learning. Designed for DPs, compliance teams, students, market professionals, and policymakers, it supports both examination preparation and operational excellence. Developed in collaboration with NISM experts and strengthened by contributions from NSDL/CDSL, the September 2025 edition delivers updated regulatory insights, step-by-step workflows, and a robust exam-oriented design.

1. Introduction to Basic Services Demat Account (BSDA)

With a view to achieve wider financial inclusion, encourage holding of demat accounts and to reduce the cost of maintaining securities in demat accounts for retail individual investors, depository participants (DPs) are required to make available a “Basic Services Demat Account” (BSDA) with limited services as per terms specified herein. In order to facilitate the eligible individuals to avail the benefits of BSDA, DPs are advised to convert all such eligible demat accounts into BSDA unless such Beneficial Owners (BOs) specifically opt to continue to avail the facility of a regular demat account.¹

1.1 Eligibility Conditions for Opening BSDA²

Individuals shall be eligible to opt for BSDA subject to the following conditions:

1. Demat accounts shall be under individual category and shall have only one demat account where the person should be the sole or first holder;
2. The individuals shall have only one BSDA in their name across all
   depositories;
3. Value of securities held in demat account shall not exceed Rs. 10 lakhs for debt and other than debt securities combined at any point of time;
4. Demat accounts shall be registered for SMART facility;
5. One demat account of first holder across depository where verified PAN of the first holder is available. This criteria has not been applied in case of
   PAN exempt entities.

Option to open BSDA – The DP shall give option:

1. To open BSDA to all eligible individuals who open a demat account after the date of applicability of SEBI circular CIR/MRD/DP/22/2012 dated August 27, 2012;
2. To all the eligible individuals to avail the benefits of BSDA, and convert all such eligible demat accounts into BSDA unless such Beneficial Owners (BOs) specifically opt to continue to avail the facility of a regular demat account.

1.2 Annual Maintenance Charges

a. The charge structure may be on a slab basis as indicated below:

Slabs	Charges
Value of Holdings in the Demat Account (debt as well as other than debt securities combined)
Upto Rs. 4,00,000	No AMC
4,00,001 to 10,00,000	Maximum Rs. 100
More than 10,00,000	Not a BSDA. Regular AMC may be levied.

b. The value of holding shall be determined by the DPs on the basis of the daily closing price or NAV of the securities or units of mutual funds, as the case may be. Where such price is not available the last traded price may be taken into account and for unlisted securities other than units of mutual funds, face value may be taken in to account. For the purpose of valuation of holdings in an account, it is clarified that the value of suspended securities may not be considered for the purpose of determining eligibility of demat account as BSDA.

c. If the value of holding in such BSDA exceeds the prescribed criteria at any date, the DPs may levy charges as applicable to regular accounts (non-BSDA) from that date onwards.

d. The DPs shall reassess the eligibility of the BOs at the end of every billing cycle and give option to the BOs who are eligible to opt for BSDA.

1.3 Services Offered to Basic Services Demat Account Holders

• Transaction Statements:

1. 1. Transaction statements shall be sent to the BO at the end of each quarter. If there are no transactions in any quarter, no transaction statement may be sent for that quarter.
   2. If there are no transactions and no security balance in an account, then no further transaction statement needs to be provided.
   3. Transaction statement shall be required to be provided for the quarter in which the account became a zero balance account.

• Holding Statement:

1. 1. One annual physical statement of holding shall be sent to the stated address of the BO in respect of accounts with no transaction and nil balance even after the account has remained in such a state for one year. The DP shall inform the BO that the despatch of physical statement may be discontinued if the account balance remains zero balance even after one year.
   2. One annual statement of holding shall be sent in respect of remaining accounts in physical or electronic form as opted for by the BO.

• Charges for Statements – Electronic statements shall be provided free of cost. In case of physical statements, the DP shall provide at least two statements free of cost during the billing cycle. Additional physical statement may be charged at a fee not exceeding Rs. 25 per statement.
• SMS Alert Facility – All BOs opting for the facility of BSDA, shall register their mobile number for availing the SMS alert facility for debit transactions.
• Delivery Instruction Slip – At least Two Delivery Instruction Slips (DIS) shall be issued at the time of account opening.
• All other conditions as applicable to regular demat accounts, other than the ones mentioned above shall continue to apply to basic services demat account.

2. Operations of a Joint Account

A depository account may be opened and maintained in the names of more than one person. All the joint-holders have to sign the application form and acknowledge receipt of copy of the Rights and Obligations document. The supporting documents and photograph should also be provided for all joint holders. The account opening module presently provides only for (up to) three joint names.³ Though the beneficial ownership of jointly held securities vests in all joint holders, communications about the joint depository account are provided only to the first holder. The dividend and interest warrants, annual reports and notices for meetings are also issued to the first-named joint holder only.

In the event of the death of a joint holder, the balance lying in the account can be transmitted, on request of the surviving holders, to a new account to be opened by the surviving holders. The earlier account having the deceased holder’s name is closed after such transmission. The chapter on Transmission gives the detailed procedure to give effect to this type of request.

In addition to the existing option of opening new account, the surviving account holders continue the existing account by deleting the name of deceased account holder(s) from the account, the surviving account holders shall make an application to the DP in the form specified for deletion of deceased account holder(s) alongwith a copy of death certificate duly attested by a Notary Public or by a Gazetted Officer. The DP shall verify the documents submitted and the signature of surviving Client(s). The DP after being fully satisfied on all aspects, shall then effect the deletion of name.

2.1 Opening of Depository Account in Joint Names With an Individual and a Body Corporate

Section 187 of the Companies Act, 2013 requires companies to hold all investments made or held by it in any property, security or other asset in its own name. However, the proviso to sub-section (1) grants exemption to holding companies in case of holding shares of its subsidiary companies. The exemption allows holding companies to appoint nominees for itself to hold shares in the subsidiary/wholly-owned subsidiary companies in order to meet the statutory minimum limit of members in a company. Share certificates in such cases are usually issued in the name of registered holder (nominee), but the name of the holding company is also mentioned along with the name of the nominee.

DPs can facilitate opening of depository account of the nominee shareholders as follows:

1. An individual and body corporate can open a depository account in joint names. In case the first holder is an individual, the account needs to be opened in individual category whereas, if the first holder is a body corporate then the account type will be “Body Corporate”. The KYC documents, along with PAN of both these entities will have to be obtained by the DP. Further, Board Resolution to open a joint depository account along with the list of persons authorised to open and operate the accounts is required for the corporate entity. DPs are requested to ensure compliance with the procedure mentioned in various circulars issued by NSDL/CDSL with regards to account opening and KYC norms of both individual and corporates, for the respective holders.
2. It may be mentioned that since a body corporate would be a joint holder, nomination facility cannot be availed in these cases.

Further, DPs may facilitate capturing the bank account of the joint holder in the demat account for such nominee holdings after obtaining an undertaking from the client in the enclosed format.

3. Internet Based Depository Operations of NSDL

3.1 Internet–Based Demat Account Statement (IDeAS)

IDeAS is the facility for viewing balances and transactions in the demat account updated on an online basis with a delay of maximum 30 minutes. This facility is available to the users of SPEED-e, clearing members who have subscribed to IDeAS and to those clients whose DPs are registered for IDeAS. A demat account holder or a clearing member will have the option to access IDeAS either as a Password or a Smart Card/e-Token User.

NSDL has launched a facility called IDeAS from January 1, 2004 for investors to view balances and transactions in demat accounts updated on an online but not real time basis. This facility is available to all the clients including Clearing Members (CMs) who have opened an account with any of the Participants under NSDL system.

IDeAS enables Clients (Beneficial owners) to view the latest balances and transactions that have taken place in the last five days, in their depository accounts. Clients now are able to view the transactions for a period of past 30 days. Clients can select the period upto 30 days from the current date, to view the transactions.

IDeAs facility has been further enhanced to display the values:

• In respect of mutual fund units (security type code ‘20’) (held by the Clients in their demat accounts) based on the NAVs (i.e., Net Asset Value) including the date of NAV and in E-series ICINs (Commodity Identifier) of National Spot Exchange Limited for the previous business date, held by Clients in their demat accounts.
• Further, Price/face value and indicative value will be displayed in respect of non-convertible debentures, bonds, ETFs, unlisted equity shares etc., held by Clients in their demat accounts.
• IDeAS facility has been further enhanced to display the price as of the previous date and value in respect of ISINs pertaining Sovereign Gold Bonds held by Clients in their demat accounts.

In addition to the above, Clearing Members (CMs) can view and download latest balances and transactions executed in their CM Pool accounts in respect of settlements for the current pay-in date, previous four and next four pay-in dates, through IDeAS facility.

3.2 SPEED-e

NSDL launched SPEED-e (pronounced as speedy) in September, 2001. Any DP of NSDL can subscribe to SPEED-e, the common infrastructure of NSDL. SPEED-e enables demat account holders (including Clearing Members) to submit delivery instructions directly on the Internet through SPEED-e website https://eservices.nsdl.com. SPEED-e is available only to those DPs who have subscribed to it and the Users sign an agreement with the DP.

A demat account holder will have the option of accessing SPEED-e either as a Password User or as a Smart Card/e-Token User. A Clearing Member must be a Smart Card/e-Token User to be able to access SPEED-e. Password Users can debit their demat accounts only in favour of specified Pre-Notified Clearing Member accounts (upto six), while Smart Card/e-Token User can submit instructions in favour of any number of accounts.

Further, as a smart card user, clients can also freeze or unfreeze their accounts by giving instructions through SPEED-e.

Some features have been added to enhance the facility of SPEED-e:

Facility for Participants to Mark Holiday(s) on SPEED-e – A facility of Holiday Master feature on SPEED-e facilitate Participants (subscribed for SPEED-e facility) to mark holiday(s) on SPEED-e. After the Participant has marked holiday(s) on SPEED-e, Clients/Clearing Members (CMs) of the Participant shall not be allowed to submit/authorise instructions on SPEED-e with execution date as the holiday date.

Facility to Submit Inter-Depository Delivery Instructions on SPEED-e – SPEED-e facility has a feature of enabling investors/clearing members (CMs) to submit Inter Depository Delivery (IDD) instructions.

Facility to Reset Password, View & Change Email ID – Password Users of SPEED-e facility shall be given the ability to reset passwords themselves by keying-in few parameters on SPEED-e website.

Launch of Redemption of Mutual Fund Units Through SPEED-e Facility

SPEED-e facility for Beneficial Owner (i.e. password users and e-token users) also include the feature of enabling clients to redeem ‘Mutual Fund Redemption Units’ through SPEED-e facility. This facility enable both type of users viz., password and e-Token users to give request to redeem the mutual fund units.

Further, the facility for on-boarding clients on SPEED-e has been simplified; wherein the agreement between Participant and client is no longer required.

3.3 Submission of Power of Attorney Based Instructions for Clients Electronically (SPICE)

Clearing Members (Clients who have given Power of Attorney (POA) in favour of the Clearing Member) can submit auto pay-in instructions to DPs (where Clients maintain demat accounts) on SPEED-e facility to debit the demat accounts of the Clients and credit their Clearing Member (CM) Pool Accounts. Thus, eliminating the need to give paper based delivery instructions to the DPs.

3.4 NSDL/CDSL Mobile App

NSDL has developed a Mobile App for esteemed investors, where an investor can download and use the Mobile App to view balances in the demat account on the mobile anytime, anywhere. NSDL Mobile App is available on Google Playstore and Apple App Store and it is absolutely free for all demat account holders.

3.5 Submission of Instruction Through Mobile Phone Login Easily (SIMPLE)

SIMPLE, a facility that enables the password based users of SPEED-e facility to submit Client to Clearing Member Pool Account transfer instructions, on SPEED-e website through their mobile phones (enabled with GPRS).

3.6 SMS Alert Facility for NSDL/CDSL Demat Account Holders

NSDL/CDSL provides SMS alert facility for demat account holders whereby they can receive SMS alerts directly from NSDL/CDSL for following:

(1) All Debit Transfers

(2) Credits for IPO, sub-division and bonus

(3) Failed instructions

(4) Overdue instructions

(5) Change of mobile number

(6) Change of address

(7) Debit of Mutual Fund units

(8) Invocation of pledged securities

(9) Registration and De-registration of Power of Attorney

(10) Modification/Cancellation of nominee name

(11) Initiation/Confirmation of pledge instructions

(12) Mutual fund redemption request submission by client and acceptance/rejection of the same by RTA.

(13) Blocking/Debit of shares in demat account in respect of Tender Offer instruction (option available only with NDSL).

Charges

NSDL/CDSL does not levy any charges on the DPs for providing this facility to investors.

Registration

• This facility is available to the investors provided the investors have given their mobile numbers to their DPs and the DPs have captured the numbers in the NSDL/CDSL System and have also enabled (ticked) the SMS flag in NSDL and/or CDSL system.
• Those investors who have provided their mobile numbers to their DPs but do not wish to avail this facility shall inform their DPs to disable the SMS flag. However, such accounts should not be operated by Power of Attorney (PoA).
• For change of address and registration & de-registration of Power of Attorney in NSDL System, SMS alerts shall be sent to Client’s mobile phone (captured in NSDL System) irrespective of Client availing SMS Alert facility.

4. Internet Based Depository Operations of CDSL

CDSL offers its demat account holders with two internet based facility Electronic Access to Securities Information [EASI] whereby beneficial owner can view their demat account holding, download the transaction statements and Electronic Access to Securities Information and Execution of Secured Transaction [easiest] which permits BOs/CMs to submit debit/credit transaction instructions to effect off-market, on-market, inter-depository and early pay-in of transactions, freeze/unfreeze and pledge, unpledged and confiscation.

Through the easiest facility, the BO can freeze their demat account at BO level, ISIN level as well as can initiate partial level freeze.

Further, the BO can pledge the securities as a pledgor, and Pledgee BO can accept the pledge as a pledgee if both the BOs are registered for CDSLs easiest facility. Further, the pledgee can execute the confiscation if the pledgor fails to fulfil the obligation. BO also has the facility to initiate the pledge for the purpose of Margin from their easiest login.

CM has the facility to accept the Margin pledge from its easiest login as a pledgee and the CM has the facility to re-pledge the securities to the CC as a pledgor.

A sole holder beneficial owner is not required to submit any registration forms to DP for authentication nor the trusted account declaration in case of easiest trusted account user.

In case of a beneficial owner holding a joint demat account, the beneficial owner is required to submit the duly signed registration form to the DP for authentication to his/her DP.

SMS Alert Facility is also provided for CDSL demat account holders who are registered for SMART, wherein various types of alerts are being sent to registered mobile number of demat account holder on the same day of transaction.

The sole holder BO can update the nomination details or opt out of nomination details in their demat account through CDSL’s easi/easiest facility as well as from the website of CDSL.

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1. SEBI Circular Ref No. CIR/MRD/DP/20/2015 dated December 11, 2015.
2. SEBI Circular Ref. No. SEBI/HO/MIRSD-PoD1/P/CIR/2024/91 dated June 28, 2024 which shall come into effect from September 1, 2024.
3. Separate set of rule has been prescribed for handling of cases of four or more joint holders:

• • A separate account could be opened in the name of the joint holders with four or more names.
  • No standing instructions to receive credits, receipt instructions, new issue applications and any other instruction which has the effect of crediting this account should be accepted in respect of such account.
  • Appropriate annexure should be attached to the account opening form to include various details, viz., name, address, signatures, etc. of more than three holders.
  • An undertaking should be obtained from the client that he will not use this account for the purpose of allotments in the primary market or for purchases from the secondary market. Hence the client will give no instructions (other than for dematerialisation, bonus, rights and preferential offer) to any person which has the effect of crediting this account.
  • While opening the account, the DP should capture the names of the four or more joint holders by numbering them in his system and entering the first holder’s name in the first holder’s field. The rest of the names have to be accommodated in the fields for second and third holder.
  • The DP should process the dematerialisation request as per the usual procedure while ensuring that the pattern of holding for each certificate tallies with the pattern of holding of the account.
  • After all shares have been demateralised, the BO shall open a anew demat account in the name of three holders (max) and transfer all securities from the previous account to the new account. After all the balances in such a joint account become nil, the account should be closed.
  • For holdings of a Trust in the joint names of four or more trustees, this procedure for opening the account can be adopted without any restrictions on receiving credits into that account.

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