1. Introduction

The distinction between a prior period error and a change in accounting estimate is one of the most significant areas in financial reporting under Indian Accounting Standards (Ind AS). In practice, companies often identify errors relating to earlier financial years but account for such adjustments through the current year’s Statement of Profit and Loss by describing them as “changes in estimates” or “revisions in assumptions”.

Such accounting treatment may materially distort the financial performance of the current period because prior period errors are required to be corrected retrospectively, whereas changes in accounting estimates are recognised prospectively. Consequently, inappropriate classification of prior period errors as changes in estimates can lead to manipulation of profitability trends, concealment of weak internal controls, and reduced comparability of financial statements.

Ind AS 8 provides a clear distinction between these concepts and prescribes separate accounting treatments for each. Therefore, proper identification of whether an item represents an error relating to prior periods or a genuine revision in estimate is essential.

This write-up analyses the distinction between prior period errors and changes in estimates under Ind AS with the help of practical illustrations.

2. Understanding the Meaning of Prior Period Errors and Changes in Accounting Estimates

2.1 Prior Period Errors

Paragraph 5 of Ind AS 8 defines prior period errors as omissions from, and misstatements in, the entity’s financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information:

(a) that was available when financial statements for those periods were authorised for issue; and

(b) that could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements.

The paragraph further states that such errors include mathematical mistakes, mistakes in applying accounting policies, oversights or misinterpretations of facts, and fraud.

Thus, where reliable information already existed in the earlier period, and the entity failed to appropriately consider such information, the matter generally represents a prior period error.

2.2 Changes in Accounting Estimates

Paragraph 32 of Ind AS 8 states that, as a result of uncertainties inherent in business activities, many items in financial statements cannot be measured precisely and can only be estimated. Estimation involves judgments based on the latest available reliable information.

Paragraph 34 of Ind AS 8 further provides that an estimate may require revision if changes occur in the circumstances on which the estimate was based or as a result of new information or more experience.

Importantly, the paragraph clarifies that a revision of an estimate does not relate to prior periods and is not the correction of an error.

Therefore, a genuine change in estimate arises only when:

(a) new information becomes available;

(b) circumstances change; or

(c) additional experience modifies earlier expectations.

3. Understanding the Difference in Accounting Treatment of Prior Period Errors and Changes in Accounting Estimates

3.1 Accounting Treatment for Prior Period Errors

Paragraph 42 of Ind AS 8 requires an entity to correct material prior period errors retrospectively in the first set of financial statements approved for issue after discovery of the error by:

(a) restating comparative amounts for prior periods presented in which the error occurred; or

(b) where the error occurred before the earliest prior period presented, restating the opening balances of assets, liabilities and equity for the earliest prior period presented.

Thus, prior period errors are not routed through the current year’s profit or loss merely because they are identified in the current period.

3.2 Accounting Treatment for a Change in Estimate

Paragraph 36 of Ind AS 8 provides that the effect of a change in an accounting estimate shall be recognised prospectively by including it in profit or loss:

(a) in the period of the change, if the change affects that period only; or

(b) in the period of the change and future periods, if the change affects both.

Accordingly, only genuine changes in estimates are recognised through current and future period profit or loss.

4. Why are Prior Period Errors Often Disguised as Changes in Estimates?

In practice, companies may classify prior period adjustments as changes in estimates for various reasons, including:

(a) avoidance of retrospective restatement

(b) prevention of adverse impact on previously reported earnings trends

(c) avoidance of regulatory scrutiny

(d) reduction of audit complications

(e) preservation of managerial performance metrics, and

(f) concealment of deficiencies in internal financial controls.

However, such classification is inconsistent with Ind AS, where the underlying issue relates to the misuse or non-use of information that already existed in prior periods.

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Notification no. G.S.R. 344(E); Dated: 08.05.2026

The Central Government has notified the Social Security (Central) Rules, 2026, consolidating provisions under various labour law frameworks into a unified social security regime.

1. Reporting of Vacancies to Career Centres

All Public sector employers & Private sector employers are required to report vacancies to designated career centres within 90 days of notification

2. Exception to Vacancy Reporting

The requirement does not apply to vacancies where wages are below ₹11,000 per month

3. Recognition of Medical Practitioners for ESI

For purposes of the Employees’ State Insurance (ESI) framework, the Rules recognise:

• Allopathic practitioners
• AYUSH practitioners
• Homoeopathic practitioners

As recognised medical practitioners under the Code

4. Interest on Delayed Payments

• The Rules provide that 12% interest shall be payable on delayed payment of dues under the Code

5. Objective of the Rules

The Rules aim to:

• Streamline and consolidate social security compliance mechanisms
• Improve employment reporting and labour market data
• Strengthen the enforcement of contribution and payment obligations

6. Conclusion

The Social Security (Central) Rules, 2026 establish a comprehensive framework for labour welfare and compliance, introducing structured reporting obligations, broader medical recognition under ESI, and stricter provisions for delayed payments.

Click Here To Read The Full Notification

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The Prevention of Money Laundering Act (PMLA) is an Indian law enacted in 2002 to prevent money laundering and to provide for the confiscation of property derived from or involved in money laundering. It establishes a legal framework to combat the process of converting illegally obtained money into legitimate assets and imposes obligations on banks, financial institutions, intermediaries, and certain businesses to maintain records, verify client identity, and report suspicious transactions to authorities. The Act came into force on 1 July 2005.

Table of Contents

1. Prevention of Money Laundering Act, 2002 (PMLA)
2. Section 2 of the PMLA 2002
3. Section 3 of the PMLA 2002
4. Section 4 of the PMLA 2002
5. Section 5 of the PMLA 2002
6. Section 12 of the PMLA 2002
7. Section 56 of the PMLA 2002
8. Maintenance of Records and Furnishing of Reports to FIU-IND

Check out Taxmann's Anti Money Laundering and Counter Terrorist Financing in the IFSC which provides a dual-framework overview of India's domestic AML system—including PMLA 2002, PML Rules 2005, and Scheduled Offences—alongside the IFSCA (AML, CFT, and KYC) Guidelines 2022, the FATF's 40 Recommendations, and trade-based money laundering provisions. The book enhances regulatory understanding with five real enforcement case studies from FIU-IND and IFSCA adjudicating orders, a comparative analysis of IFSCA guidelines against RBI/SEBI/IRDAI/PFRDA frameworks, and detailed KYC norms covering CDD, PEP accounts, sanctions screening, V-CIP, and Digital KYC onboarding. Organised into eight chapters with learning objectives, chapter-end sample questions, and syllabus-weightage mapping aligned to the 50-mark examination, the book is tailored for compliance professionals, capital market intermediaries, VDA service providers, legal teams, and examination candidates operating within the GIFT IFSC ecosystem.

1. Prevention of Money Laundering Act, 2002 (PMLA)

Prevention of Money Laundering Act (PMLA) forms the core of the legal framework put in place by India to combat money laundering. It is an act to prevent money-laundering and to provide for confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. Prevention of Money Laundering Act (PMLA) and the Prevention of Money Laundering Rules (PMLR) notified there under came into force with effect from July 1, 2005.

Director, FIU-IND and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant sections of the Act to implement the provisions of the Act. The PMLA and rules notified thereunder impose obligation on banking companies, financial institutions, and intermediaries and persons carrying on a designated business or profession, to verify identity of clients, maintain records and furnish information to FIU-IND.

2. Section 2 of the PMLA 2002

This section defines terms used in the Act

(1) In this Act, unless the context otherwise requires,—

(a) “Adjudicating Authority” means an Adjudicating Authority appointed under sub-section (1) of section 6;

(b) “Appellate Tribunal” means the Appellate Tribunal established under section 25;

(c) “Assistant Director” means an Assistant Director appointed under sub-section (1) of section 49;

(d) “attachment” means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III;

(da) “authorised person” means an authorised person as defined in clause (c) of section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999);

(e) “banking company” means a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act;

(f) “Bench” means a Bench of the Appellate Tribunal;

(fa) “beneficial owner” means an individual who ultimately owns or controls a client of a reporting entity or the person on whose behalf a transaction is being conducted and includes a person who exercises ultimate effective control over a juridical person¹

(g) “Chairperson” means the Chairperson of the Appellate Tribunal;

(h) “chit fund company” means a company managing, conducting or supervising, as foreman, agent or in any other capacity, chits as defined in section 2 of the Chit Funds Act, 1982 (40 of 1982);

(ha) “client” means a person who is engaged in a financial transaction or activity with a reporting entity and includes a person on whose behalf the person who engaged in the transaction or activity, is acting;

(i) “co-operative bank” shall have the same meaning as assigned to it in clause (dd) of section 2 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961);

(ia) “corresponding law” means any law of any foreign country corresponding to any of the provisions of this Act or dealing with offences in that country corresponding to any of the scheduled offences;

(ib) “dealer” has the same meaning as assigned to it in clause (b) of section 2 of the Central Sales Tax Act, 1956 (74 of 1956);

(j) “Deputy Director” means a Deputy Director appointed under sub-section (1) of section 49;

(k) “Director” or “Additional Director” or “Joint Director” means a Director or Additional Director or Joint Director, as the case may be, appointed under sub-section (1) of section 49;

(l) “financial institution” means a financial institution as defined in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934) and includes a chit fund company, a housing finance institution, an authorised person, a payment system operator, a nonbanking financial company and the Department of Posts in the Government of India;

(m) “housing finance institution” shall have the meaning as assigned to it in clause (d) of section 2 of the National Housing Bank Act, 1987 (53 of 1987);

(n) “intermediary” means:

(i) a stock-broker, sub-broker share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser or any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); or

(ii) an association recognised or registered under the Forward Contracts (Regulation) Act, 1952 (74 of 1952) or any member of such association; or

(iii) intermediary registered by the Pension Fund Regulatory and Development Authority; or

(iv) a recognised stock exchange referred to in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(na) “investigation” includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence;

(o) “Member” means a Member of the Appellate Tribunal and includes the Chairperson;

(p) “money-laundering” has the meaning assigned to it in section 3;

(q) “non-banking financial company” shall have the same meaning as assigned to it in clause (f) of section 45-I of the Reserve Bank of India Act, 1934
(2 of 1934);

(r) “notification” means a notification published in the Official Gazette;

(ra) “offence of cross border implications”, means—

(i) any conduct by a person at a place outside India which constitutes an offence at that place and which would have constituted an offence specified in Part A, Part B or Part C of the Schedule, had it been committed in India and if such person the proceeds of such conduct or part thereof to India; or

(ii) any offence specified in Part A, Part B or Part C of the Schedule which has been committed in India and the proceeds of crime, or part thereof have been transferred to a place outside India or any attempt has been made to transfer the proceeds of crime, or part thereof from India to a place outside India.

Explanation.—Nothing contained in this clause shall adversely affect any investigation, enquiry, trial or proceeding before any authority in respect of the offences specified in Part A or Part B of the Schedule to the Act before the commencement of the Prevention of Money-laundering (Amendment) Act, 2008:

(rb) “payment system” means a system that enables payment to be effected between a payer and a beneficiary, involving clearing, payment or settlement service or all of them.

Explanation.—For the purposes of this clause, “payment system” includes the systems enabling credit card operations, debit card operations, smart card operations, money transfer operations or similar operations;

(rc) “payment system operator” means a person who operates a payment system and such person includes his overseas principal.

Explanation.—For the purposes of this clause, “overseas principal” means,—

(A) in the case of a person, being an individual, such individual residing outside India, who owns or controls or manages, directly or indirectly, the activities or functions of payment system in India;

(B) in the case of a Hindu undivided family, Karta of such Hindu undivided family residing outside India who owns or controls or manages, directly or indirectly, the activities or functions of payment system in India;

(C) in the case of a company, a firm, an association of persons, a body of individuals, an artificial juridical person, whether incorporated or not, such company, firm, association of persons, body of individuals, artificial juridical person incorporated or registered outside India or existing as such and which owns or controls or manages, directly or indirectly, the activities or functions of payment system in India;

(s) “person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and

(vii) any agency, office or branch owned or controlled by any of the above persons mentioned in the preceding sub-clauses;

(sa) “person carrying on designated business or profession” means—

Ø a person carrying on activities for playing games of chance for cash or kind, and includes such activities associated with casino;

Ø Inspector-General of Registration appointed under section 3 of the Registration Act, 1908 as may be notified by the Central Government;

Ø real estate agent, as may be notified by the Central Government;

Ø dealer in precious metals, precious stones and other high value goods, as may be notified by the Central Government;

Ø person engaged in safekeeping and administration of cash and liquid securities on behalf of other persons, as may be notified by the Central Government; or

Ø person carrying on such other activities as the Central Government may, by notification, so designate, from time-to-time;

(sb) “precious metal” means gold, silver, platinum, palladium or rhodium or such other metal as may be notified by the Central Government;

(sc) “precious stone” means diamond, emerald, ruby, sapphire or any such other stone as may be notified by the Central Government;

(t) “prescribed” means prescribed by rules made under this Act;

(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad.

Explanation.—For the removal of doubts, it is hereby clarified that “proceeds of crime” include property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence.

(v) “property” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located.

Explanation.—For the removal of doubts, it is hereby clarified that the term “property” includes property of any kind used in the commission of an offence under this Act or any of the scheduled offences;

(va) “real estate agent” means a real estate agent as defined in clause (88) of section 65 of the Finance Act, 1994;

(w) “records” include the records maintained in the form of books or stored in a computer or such other form as may be prescribed;

(wa) “reporting entity” means a banking company, financial institution, intermediary or a person carrying on a designated business or profession;

(x) “Schedule” means the Schedule to this Act;

(y) “scheduled offence” means:

(i) the offences specified under Part A of the Schedule; or

(ii) the offences specified under Part B of the Schedule if the total value involved in such offences is one crore rupees or more; or

(iii) the offences specified under Part C of the Schedule;

(z) “Special Court” means a Court of Session designated as Special Court under sub-section (1) of section 43;

(za) “transfer” includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;

(zb) “value” means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person.

(2) Any reference, in this Act or the Schedule, to any enactment or any provision thereof shall, in relation to an area in which such enactment or such provision is not in force, be construed as a reference to the corresponding law or the relevant provisions of the corresponding law, if any, in force in that area.

3. Section 3 of the PMLA 2002

This section gives the definition of Offence of Money Laundering. Whosoever, directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be guilty of offence of money-laundering. Further, the Act clarifies that a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:

(a) concealment; or

(b) possession; or

(c) acquisition; or

(d) use; or

(e) projecting as untainted property; or

(f) claiming as untainted property, in any manner whatsoever

The process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.

The Prevention of Money Laundering Act is divided in multiple sections. An illustrative list regarding applicability/scope of coverage of these sections² is as mentioned below:

Sections	Scope of Coverage
Section 1	Short title, extent & Commencement
Section 2	Definitions
Section 3	Offence of Money Laundering
Section 4	Punishment for Money Laundering
Section 5	Attachment of property involved in money laundering.
Section 11A	Verification of identity by reporting entity
Section 12	Reporting entity to maintain records
Sections 12A & 12AA	Access to Information
Section 13	Powers of the Director
Section 14	No civil or criminal proceedings against reporting entity, its Directors & Employees in certain cases
Section 15	Procedure and manner of furnishing information by reporting entities
Section 26	Appeals to Appellate Tribunal
Section 39	Right of appellant to take assistance of authorised representative and of Government to appoint presenting officers
Section 40	Members etc. to be public servants
Section 41	Civil court not to have jurisdiction
Section 42	Appeal to high court
Section 44	Offences triable by special courts
Section 48	Authorities under the Act
Section 49	Appointment and powers of authorities and other officers
Section 50	Powers of authorities regarding summons, production of documents and to give evidence etc.
Section 54	Certain officers and others to assist in inquiry etc.
Section 56	Agreements with foreign countries
Section 66	Disclosure of information
Section 69	Recovery of Fine or Penalty
Section 73	Power to make Rules
Section 75	Power to remove difficulties

4. Section 4 of the PMLA 2002

As per Section 4 of the Prevention of Money Laundering Act 2002,

“Whoever commits the offence of money-laundering is punishable with rigorous imprisonment for a term which will not be less than three years but which may extend to seven years and shall also be liable to fine.

However, it may be noted that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.

5. Section 5 of the PMLA 2002

As prescribed under Section 5 of the Act, where the Director or any other officer not below the rank of Deputy Director authorised by the Director for the purposes of this section, has reason to believe (recorded in writing), on the basis of material in his possession, that:

(a) any person is in possession of any proceeds of crime; and

(b) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime may, by order in writing, provisionally attach such property for a period not exceeding one hundred and eighty days from the date of the order, in such manner as may be prescribed

6. Section 12 of the PMLA 2002

As per Section 12 of the Prevention of Money Laundering Act 2002, the requirement for maintenance of records by reporting entities has been specified. According to the section:

(1) Every reporting entity is required to:

(a) maintain a record of all transactions, in such manner as to enable it to reconstruct individual transactions;

(b) furnish to the Director within such time as may be prescribed, information relating to such transactions, whether attempted or executed, the nature and value of which may be prescribed;

(c) maintain record of documents evidencing identity of its clients and beneficial owners as well as account files and business correspondence relating to its clients.

(2) Every information maintained, furnished or verified, save as otherwise provided under any law for the time being in force, shall be kept confidential.

(3) The records referred to in clause (a) of sub-section (1) shall be maintained for a period of five years from the date of transaction between a client and the reporting entity.

(4) The records referred to in clause (c) of sub-section (1) shall be maintained for a period of five years after the business relationship between a client and the reporting entity has ended or the account has been closed, whichever is later.

(5) The Central Government may, by notification, exempt any reporting entity or class of reporting entities from any obligation under this Chapter.

7. Section 56 of the PMLA 2002

As illustrated under Section 56 of the PMLA 2002 the international co-operation between countries for the purpose of prevention of money laundering has been specified. Accordingly:

(1) The Central Government may enter into an agreement with the Government of any country outside India for:

(a) enforcing the provisions of this Act;

(b) exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that country or investigation of cases relating to any offence under this Act, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) The Central Government may, by notification in the Official Gazette, direct that the application of this Chapter in relation to a contracting State with which reciprocal arrangements have been made, shall be subject to such conditions, exceptions or qualifications as are specified in the said notification.

8. Maintenance of Records and Furnishing of Reports to FIU-IND³

For effective implementation of the Act, maintenance and reporting of records is an important requirement. Under the PML Rules, Rule 3 – Maintenance of records of transactions, the following transactions have been specified, for which records have to be maintained and reports are to be furnished to FIU-IND⁴:

(a) All cash transactions of the value of more than rupees 10 lakh or its equivalent in foreign currency.

(b) All series of cash transactions integrally connected to each other which have been individually valued below rupees ten lakhs or its equivalent in foreign currency where such series of transactions have taken place within a month and the monthly aggregate exceeds an amount of ten lakh rupees or its equivalent in foreign currency;

(c) All transactions involving receipts by non-profit organisations of value more than rupees ten lakh, or its equivalent in foreign currency;

(d) All cash transactions where forged or counterfeit currency notes or bank notes have been used as genuine or where any forgery of a valuable security or a document has taken place facilitating the transactions;

(e) All suspicious transactions, whether or not made in cash, including attempted transactions.

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1. From the IFSCA perspective the meaning of beneficial owner has been explained in point 6.3.6 of this book.
2. Source – https://fiuindia.gov.in/files/AML_Legislation/pmla_2002.html
3. Note – No cash transactions are permitted in IFSC domain.
4. Source – https://fiuindia.gov.in/files/AML_Legislation/notification.html and https://fiuindia.gov.in/pdfs/downloads/Brochures%20on%20FIU.pdf

The post Prevention of Money Laundering Act (PMLA) – Key Provisions appeared first on Taxmann Blog.

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Property, Plant and Equipment (PPE) are tangible assets held by an entity for use in the production or supply of goods or services, for rental to others, or for administrative purposes, and are expected to be used for more than one accounting period. These assets include items such as land, buildings, machinery, furniture, and vehicles. An item is recognised as PPE when it is probable that future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably.

Table of Contents

1. What are Property, Plant and Equipment?
2. Depreciation
3. Revaluation
4. Why is it Important?
5. How to Analyse to Unlock?

Check out Taxmann's Balance Sheet Decoded – Keys to Unlock Financial Statements which now in its fifth edition, is a comprehensive, practitioner-driven treatise spanning over 600 pages across 38 chapters. It is enriched with more than 69 case analyses from actual Indian company annual reports and features 69 charts, diagrams, and flowcharts of working cycles. The book offers a step-by-step method to interpret every line item of corporate financial statements—revealing creative accounting, fund diversion, siphoning, window dressing, and hidden misstatements within financial disclosures. Based around a unique six-key framework covering Balance Sheet Assets, Balance Sheet Liabilities, the Statement of Profit & Loss, Connecting Statements, Auditor's Opinion, and CARO 2020, each chapter follows a disciplined five-part structure – What Is It, Do You Know, How to Decode, Case Analysis Box, and Bottom Line. It includes annotated data tables for structured learning. Fully updated for FY 2025, it incorporates the latest Ind AS standards, amendments to the Companies Act 2013, SEBI regulations, RBI guidelines, and MAT provisions under Section 115JB. This edition also introduces a distinctive three-phase business cycle analysis—Base, Built-up, and Stress—for predicting financial distress and integrates a forensic and fraud detection perspective based on the author's experience as a forensic auditor affiliated with IBA, SEBI, SFIO, NIA, and NCB.

1. What are Property, Plant and Equipment?

Property, Plant and Equipment, also known as fixed assets are tangible items which are held for use in the production or supply of goods or services or for administrative purpose. In order to fall within the definition of fixed assets, apart from above criteria, it is further required that such tangible items should be expected to be used during more than one period. The cost of an item of property, plant and equipment etc. is recognised as an asset, if and only if:

The cost of an item of property, plant and equipment etc. is recognised as an asset if and only if:

(a) it is probable that future economic benefits associated with items will flow to the entity and

(b) the cost of an item can be measured reliably.

Accordingly, after initial investment in PPE, any subsequent cost incurred is also added to the cost of fixed assets, pro­vided, if above two conditions are satisfied.

Major spare parts and standby equipment which are expected to be used for more than one period, also forms part of plant and machinery.

Certain items of PPE may not directly increase the future economic benefits to an entity but may be necessary for an entity to obtain the future economic benefits from other assets. These assets also form part of PPE. For example, environmental compliance related equipment in a chemical manufacturing unit.

Fixed assets are known as “Property, Plant and Equipment” in a case where Indian Accounting Standards (Ind AS) applies. Ind AS 16 – Property, Plant & Equipment, deals with the same. Further, as per amendment in schedule III (Preparation of Financial Statements) to the Companies Act, 2013, the “fixed asset” is replaced with “Property, Plant and Equipment”, w.e.f. 11th Oct., 2018.

Fixed asset is a non-current asset, and accordingly in the balance sheet shown under the head non-current assets.

2. Depreciation

Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. Accordingly, the amount of depreciation is provided for the use of the assets, as an item of expenditure in the statement of profit & loss. Depreciation is a non-cash item, as it is an allocation of the cost of an asset in the statement of profit & loss out of the amount of fixed assets already acquired. Accordingly, the net amount of fixed assets (after depreciation) is shown in balance sheet.

Depreciation is calculated on the basis of cost of an asset, less its residual value.

Useful life of an asset is defined in terms of asset’s expected utility to the entity. The following factors are taken into consideration, while determining useful life:

(a) expected usage,

(b) expected physical wear and tear,

(c) technical obsolescence and

(d) legal limits on use of the asset.

3. Revaluation

Where there is a change in fair value of the fixed assets, the revaluation model is applied. Fair value is the price that would be received when an asset is sold. Fair value is not necessarily the market price.

Do you know?

In case of an entity to which Ind AS does not apply fixed assets is known as “Property, Plant & Equipment and Tangible Assets”. In case of an entity to which Ind AS applies, the fixed asset is known as “Property, Plant & Equipment”. The classification for the same is required to be given as under:

Non-Ind AS Entity	Ind AS Entity
I. Property, Plant & Equipment (i) To be classified in balance sheet as: (a) Land; (b) Buildings; (c) Plant and equipment; (d) Furniture and fixtures; (e) Vehicles; (f) Office equipment; (g) Others (specify nature). (ii) Assets under lease are to be separately specified under each class of assets	I. Property, Plant & Equipment (i) To be classified in balance sheet as: (a) Land; (b) Buildings; (c) Plant and equipment; (d) Furniture and fixtures; (e) Vehicles; (f) Office equipment; (g) Bearer Plants; (h) Others (specify nature). (ii) Assets under lease are to be separately specified under each class of assets

Schedule III to the Companies Act, 2013, requires submission of separate information of the gross and net amount of each class of fixed assets being Property, Plant and Equipment at the beginning and end of the Balance Sheet date. It further requires to separately disclose the amount of addition, disposals, acquisition through business combination, other adjustments like impairment losses or reversals separately, including change due to revaluation of 10% or more.

With effect from 1st April, 2014, based on IFRS approach, the depreciation charge has been rationalised by amending Schedule II under section 123 of the Companies Act, 2013. Accordingly, the useful life of an asset has been fixed in the Schedule II to the Companies Act, 2013. With respect to major fixed assets, the useful life has been fixed as under:

(a)	Building (other than factory building) RCC frame	– 60 years
(b)	Building (other than factory building) other than RCC frame	– 30 years
(c)	Factory Building	– 30 years
(d)	Plant and Machinery other than continuous process	– 15 years
(e)	Continuous Process Plant	– 25 years
(f)	Furniture and Fixtures – General	– 10 years
(g)	Motor Vehicle – Cars	– 6 years
(h)	Office Equipment	– 5 years
(i)	Electrical Installations	– 10 years

(For details please refer Schedule II to the Companies Act, 2013 available on website of MCA)

With effect from 1st April, 2014, it has further mandated to follow the useful life of fixed assets, as per said Schedule II to the Companies Act, 2013. If a company is adopting some different benchmark for useful life other than that prescribed in schedule II, necessary disclosure is required to be made in the notes.

4. Why is it Important?

The analysis of fixed assets as well as addition to fixed assets are important, as it is found in some cases that entity is showing certain fixed assets as well as addition to fixed assets in a particular year, but the economic benefit of such fixed assets or addition made to fixed assets were not found.

It is also seen that there may be huge amount of investment into fixed assets but the economic benefit commensurate with the amount of investment is not found. The analysis of fixed assets revolves around the amount of investment and economic benefit from such investment.

It is elementary that no prudent businessman will invest substantial resources in fixed assets without looking into the benefits which are going to accrue to the business by use of such fixed assets. For example, the investments in plant and machinery and factory building are directly related to higher production as well as higher manufacturing sales. Investment in land may be for long-term capital appreciation or for future requirement of the land in business. Therefore, the investment in land may not result into immediate resources to the entity.

Generally, it is found that where an entity is showing financial stress in the business, the addition to fixed assets is used as a mode of obtaining fresh term loan from financial institutions. The intention behind such term loan may be to use the funds in the business rather than for “Real” addition to fixed assets. It is also found sometimes that “addition to fixed assets” is used as a route to divert resources/funds. There may not be genuine or a real requirement of addition to fixed assets in a given case and therefore; by showing addition to fixed assets, the amounts/funds are diverted from the business under the guise of “addition to fixed assets”. The issue becomes more critical, when such purchases of fixed assets are found to be from a related party.

Therefore, a proper and detailed analysis of investment in fixed assets should be done – What are the various fixed assets? What are the types of fixed assets? The total amount of investment, additional amount of investment in fixed assets during the year under consideration needs to be looked into and the same should match the nature of business, type of business, volume of business etc. The overall profitability, the capacity and utilisation of the existing facilities and related party details of purchases of fixed assets can also bring insight for the purpose of analysis of fixed assets.

5. How to Analyse to Unlock?

In the Chart No.1, the stepwise approach is explained for the purpose of decoding of fixed assets and to find out early warning sign or strength or insight, wherein each action of decoding is linked to its objective:

Chart 1

Steps	Action	Objective
1	Find out the nature of business	To find out whether the entity is trading and/or manufacturing and/or servicing etc. to justify investment into fixed assets
2	Find out the volume of business	To justify the level of investment into fixed assets
3	Look at the fixed assets schedule to find out which are the main fixed assets and the amount of gross block in each category of fixed assets	To find out whether the amount of investment into each category of fixed assets is rational or not
4	Compare the amount of gross block of each category of fixed assets with the details of revenue from operation	To find out whether investment into each category of fixed assets is giving proper economic benefit to the entity
5	Compare the amount of addition to fixed assets, if any, with corresponding increase in the economic benefit	To perceive/gather whether addition to fixed assets is real or not
6	Look at the overall amount of invest­ment into fixed assets and overall revenue from operation	To find whether investment into fixed assets is commensurate with the rev­enue from operation
7	Look at the details of related party transaction as available in the notes on accounts	To find whether addition to fixed asset is by way of purchases from related party
8	Compare the result of step-6 with step-7	To find out the diversion of funds
9	Find out the amount of loan taken by the entity on such fixed assets/addition to fixed assets	By comparing the loan amount with results of step-6, can indicate the possible diversion of funds
10	Find out that fixed asset register is properly maintained and fixed assets is also physically verified. (Please refer chapter 26 of key#4)	Any adverse information in CARO indicates early warning sign
11	Compare the overall manufactur­ing capacity utilisation and further expansion	To find out real need of expansion

Case Analysis – 1

APL Apollo Tubes Limited – India’s number 1, Structural Steel Tube Player with a Pan – India manufacturing footprint having 11 manufacturing facilities (source – www.apapollo.com), in its annual report for FY 2025, as available on the website of the company stated to have made substantial investment into plant & machineries and capacity, as per the Box 1:

Box 1

Details of Capex, Capacity and Fixed Cost – Page 5 of Annual Report

Analysis

• As can be seen from the above information that over the period of last 5 years the company has made a Capex (Investment into Fixed Assets of ₹30,246 Mn i.e. ₹3,025 Crores. As a result of this the Capacity has increased from 2.6 Mn Ton to 4.5 Mn Ton.
• The information provided in the financial statement, with respects to actual production and increasing in production due to Capex is relevant and required to be seen.
• Since, financial statements do not separately provide the details of production and therefore, alternatively, one can look into the sale of products/manufacturing sales.
• Before looking into the amount of actual increase in sale of products/manufacturing sales, the amount of investment made into plant & machineries, as per audited financial statements is to be seen. The same is provided in the Box 2:

Box 2

Details of Addition to Plant and Machinery

(₹ in crores)

Particulars	FY 2022	FY 2023	FY 2024	FY 2025
Gross Block of Property Plant and Equipment	1,673	1,747	1,731	1,937
Net Block of Property Plant and Equipment	1,296	1,280	1,198	1,315
Plant and Machinery
– Opening Balance	825	1,254	1,329	1,308
– Addition to Plant and Machinery	447	110	67	185
– Sales/Transfer of Plant and Machinery	(18)	(36)	(88)	(20)
– Closing Balance of Plant and Machinery	1,254	1,329	1,308	1,473

Analysis

• As can be seen from above details that the total addition to plant &
  machineries over the period of 4 years till 31st March, 2025, is of
  ₹ 809 Crores.
• In order to find out the intrinsic value of the investment and the benefit derived out of such investment is crucial to understand the same.
• Since, addition is into plant & machineries and naturally the purpose and object of such investment is to enhance manufacturing capacity, as amount of investment is substantial and therefore, cannot be considered as to upkeep the working of plant & machineries.
• Therefore, in the Box 3 below, the details of total sales, and revenue from operations are provided:

Box 3

Details of Revenue from Operations

(₹ in crores)

Particulars	FY 2022	FY 2023	FY 2024	FY 2025
Revenue from Operations	11,590	14,279	13,859	14,361
Sale of Products	11,210	13,876	13,476	13,945
Purchase of Stock in Trade	859	1,343	1,758	2,773
Finance Cost	43	48	50	95
Power and Fuel	118	147	133	140

Analysis

• From the above details as provided by the company in its Statement of Profit & Loss, it emerges that the sales with respects to sale of the products has increased from ₹11,210 Crores to ₹13,945 Crores. Therefore, the increase in sales in absolute value is of ₹2,735 Crores from FY 2022 to FY 2025.
• In terms of percentage the sale of products has increased by 24% from FY 2022 to FY 2025, as against investment in plant & machineries of ₹809 Crores, which is about 98% of the opening block of plant & machineries as at 1st April, 2021.
• Therefore, on overall basis the addition to plant & machineries over the period of 4 years is of 98%, as against which increase in sale of products is about 24%. This is the way; one should look into the issue pertaining to any addition to fixed assets.
• Not only that one should also look into the fact about the nature of sales, in case of addition to plant & machineries. As found in this case that company has shown the nature of revenue from operation as “Sale of Products”. Meaning thereby the same does not necessarily indicate that it is the sale of the goods, which has been manufactured by the company. Therefore, having deep drive further it is found that on the face of the Profit & Loss company has shown “Purchases of stock–in–trade”.
• The Division II to Schedule III of the Companies Act requires a separate disclosure with respects to trading activities, meaning thereby, which is not the part of manufacturing activity.
• Therefore, it appears that the sale of products as per above Box 3, include the sale of traded goods, purchases of which has been shown separately.
• In the following table if purchases of stock-in-trade if excluded, what would have been the manufacturing sales (by use of plant & machinery), are provided:

(₹ in crores)

FY	Total Sale of Products	Purchases of Stock-in-Trade	Sales from Manufacturing Activities
FY 2022	11,210	859	10,351
FY 2023	13,876	1,343	12,533
FY 2024	13,476	1,758	11,718
FY 2025	13,945	2,773	11,172

• The above true analysis indicates that the actual increase in manufacturing sales over the period of 4 years is about 8% and not 24%. The 24% is the overall increase in sales, which include the sales of traded goods (which has no use of plant & machineries).
• The increase in sales of manufacturing of goods is found to be of ₹821 Crores (8%) over the period of 4 years, against the addition of ₹809 Crores (which is 98% of the opening gross block of plant & machineries).
• Not only that the amount of power & fuel also indicates almost same level of manufacturing activities, as the amount of power & fuel of ₹118 Crores in FY 2022 has increased to ₹140 Crores in FY 2025, i.e. an increment of about 18%, in terms of amount.

Sum up

To sum up the amount of ₹3,025 Crores increased by the company APL Apollo on Capex, which included a major amount of ₹809 Crores on plant & machineries over a period of 4 years ending 31st March, 2025, has resulted into increase in Sales of Rs. 2,735 Crores, over the period of 4 years. Thus, the Capex could not be seen into increased production.

One of the underline principle of this book, while decoding Balance Sheet, is to interlink the various details, which are inter related, so as to understand the relevance/usefulness of the said line item of the balance sheet, as in above case analysis. Not only interrelation, but other similar details analysis, also helps one to clearly understand the same and logically conclude, as I have done in this case analysis of a steel manufacturing company that major part of increase in sale of products, is found out of the traded goods and not by way of goods manufactured – by use of plant and machineries – out of the addition made, as a part of Capex. This finding is also supported by the fact that amount of Power and Fuel has been almost found to be similar, in spite of increase in sale of products, as the same was out of sale of traded goods and not due of manufacturing.

Case Analysis – 2

This case analysis pertains to a company, Uttam Galva Steel Ltd. whose name was appeared in the sec­ond list of loan defaulters, issued by Reserve Bank of India on 30th August 2017. Since, by now we know that this company has already defaulted in repayment of borrowings from banks in the year 2017 and therefore, this case analysis has been taken, to convey my readers that, it is likely in cases of addition to plant & machinery not resulting into increased production, to face the liquidity crunch. As substantial amount of investment into plant and machineries or any fixed assets, uses the resources in the nature of funds. These funds are either borrowed funds (from banks, financial institutions etc) or from internal accruals. In either case it is use of substantial funds and thus, has bearing on the life of company, as in this old case, which has already gone under bankruptcy, and that is why selected to explain the issue in the hand.

The Note No.11 of the Audited Financial Statements for FY 2016, the details of fixed assets and depreciation as on 31st March, 2016 has been provided. The details are as per Box 4:

Box 4

Note – 11 Fixed Assets & Depreciation as on 31st March, 2016

(₹ in crores)

Particulars	Gross Block				Depreciation				Net Block
	Cost 01.04.2015	Additions	Deduction	Cost 31.03.2016	Upto 01.04.2015	For the Year Ended 31.03.2016	Deduction Adjustment	Total Depreciation	As at 31.03.2016	As at 31.03.2015
(A) Tangible Assets
Land	315.14	–	–	315.14	–	–	–	–	315.14	315.14
Building & Site Development	834.06	16.78	–	850.84	169.89	30.52	–	200.40	650.44	664.18
Flats & Office Premises	4.93	–	–	4.93	0.45	0.08	–	0.53	4.40	4.48
Plant & Machinery	4,848.65	437.31	–	5,285.96	1,220.04	192.13	–	1,412.16	3,873.80	3,628.61
Furniture & Fixture	37.23	0.02	–	37.25	14.46	3.83	–	18.29	18.96	22.77
Office Equipment	4.02	0.22	–	4.25	3.48	0.16	–	3.64	0.61	0.55
Computers	12.75	1.17	–	13.93	9.52	1.51	–	11.03	2.90	3.24
Vehicles	10.69	0.23	0.64	10.28	4.94	0.87	0.44	5.37	4.91	5.75
Housing Complex	40.70	–	–	40.70	3.39	0.65	–	4.05	36.65	37.31
TOTAL (A)	6,108.18	455.73	0.64	6,563.27	1,426.16	229.75	0.44	1,655.47	4,907.80	4,682.03
(B) Intangible Assets
Computer Software	23.39	–	–	23.39	4.70	4.68	–	9.38	14.01	18.68
Total (B)	23.39	–	–	23.39	4.70	4.68	–	9.38	14.01	18.68
Total (A+B)	6,131.57	455.73	0.64	6,586.66	1,430.86	234.42	0.44	1,664.85	4,921.81	4,700.71
Previous Year	5,240.74	1,246.72	355.86	6,131.57	1,233.54	205.38	8.07	1,430.86	4,700.71	–

Analysis

• From the analysis of the fixed assets, it is clear that in FY 2016, there is an addition to Plant & Machinery of ₹ 437 crore and as a result, the closing gross block of Plant & Machinery is ₹ 5,286 crores as on 31st March 2016.
• As explained hereinabove in Chart 1 under the head “How to analyse” addition to fixed assets, the corresponding effects of addition to fixed assets need to be looked into. Therefore, one needs to find out what is the increase in sales as a result of addition to plant & machinery.

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Case Details: Uttam Prakash vs. Union of India - [2026] 186 taxmann.com 4 (Rajasthan)

Judiciary and Counsel Details

• Sanjeev Prakash Sharma, Actg. CJ. & Mrs Shubha Mehta, J.
• Jaideep Malik, Adv. for the Petitioner.
• Shiv Prakash Dhanera, Adv., Rohan Mittal, Kuldeep Singh Rathore, AAAGs & Ms Mahi Yadav, AAG for the Respondent.

Facts of the Case

The petitioner challenged the order passed by the appellate authority rejecting his appeal on the ground of limitation. The petitioner contended that the original order was merely uploaded on the common portal and was not communicated by email, phone, or any other mode prescribed under the statutory framework. The petitioner submitted that he was deprived of the opportunity to contest the order and that he ought to have been granted an effective chance to present his case, particularly on the date on which he had submitted his reply to the show cause notice (SCN). The appellate authority, however, rejected the appeal, holding that the delay was beyond the condonable period. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that while the appellate authority’s view regarding the lack of power to condone delay beyond the period prescribed under Section 107 of the CGST Act was legally sustainable, the circumstances of the case could not be ignored where the petitioner was not properly informed of the original order. The Court observed that a petitioner cannot be left remedy-less merely due to procedural lapses in communication of the order, especially when statutory provisions under Section 169 of the CGST Act and Rajasthan GST Act, mandate proper service. It was held that the delay deserved to be condoned in the interest of justice. Accordingly, the Court directed revival of the appeal and its consideration on merits by the appellate authority in accordance with law.

List of Cases Reviewed

• Tecnimont (P.) Ltd. v. State of Punjab [2019] 111 taxmann.com 263/29 GSTL 737 (SC) (para 6) followed

List of Cases Referred to

• Eagle Trans Shipping and Logistics India (P.) Ltd. v. Union of India [D.B. Civil Writ Petition No. 15466 of 2025, dated 6-11-2025] (para 5)
• Tecnimont (P.) Ltd. v. State of Punjab [2019] 111 taxmann.com 263/29 GSTL 737 (SC) (para 6).

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Editorial Team – [2026] 186 taxmann.com 273 (Article)

Taxmann presents Practical Insights on Ind AS and SAs, a weekly series exclusively for Accounts and Audit Module subscribers of Taxmann.com, focusing on the practical application of Ind AS and Standards on Auditing through structured, issue-based analysis.

Each week features a focused topic with real-world relevance. This edition explores the exceptions and exemptions available under Ind AS 101, particularly the practical relaxations provided to entities transitioning from previous GAAP to Ind AS. The discussion explains why retrospective application is not always feasible, the distinction between mandatory exceptions and optional exemptions, and the specific modifications introduced in the Indian context.

1. Introduction

Transitioning from previous GAAP to Ind AS is not merely an accounting exercise; it represents a fundamental shift in the way financial information is recognised, measured, and presented. Since Ind AS is principle-based and significantly aligned with IFRS, applying these standards for the first time can often require extensive retrospective adjustments, reassessment of historical transactions, and reconstruction of accounting information that may not have been maintained under earlier reporting frameworks.

To address these practical challenges, Ind AS 101 provides a structured transition framework for first-time adopters. While the standard is built on the general principle that Ind AS should be applied retrospectively as if the entity had always followed these standards, strict retrospective application is not always practicable or economically justified. Accordingly, Ind AS 101 introduces certain exceptions and exemptions that reduce implementation complexity while still ensuring that the resulting financial statements provide meaningful and reliable information.

These relaxations broadly fall into two categories. Certain provisions prohibit retrospective application in specific situations where hindsight could distort financial reporting or where retrospective reconstruction may not produce reliable information. At the same time, the standard also permits optional exemptions that provide practical relief from applying some requirements retrospectively.

In addition to incorporating several transition provisions from IFRS literature, Ind AS 101 also contains India-specific modifications designed to align the transition framework with domestic accounting practices and regulatory considerations. Understanding these exceptions and exemptions is therefore critical for entities adopting Ind AS for the first time, as these provisions significantly influence opening balances, comparative information, and future financial reporting outcomes.

2. General Principle of Retrospective Application Under Ind AS 101

Ind AS 101 is fundamentally based on the concept of retrospective application. This means that an entity adopting Ind AS for the first time is generally required to prepare its opening Ind AS Balance Sheet as though the applicable Ind AS requirements had always been in force.

Under this approach, assets and liabilities are recognised, derecognised, measured, and classified in accordance with Ind AS from the transition date itself. Comparative financial information is also restated so that the financial statements become fully comparable and consistent with the Ind AS framework.

However, while retrospective application enhances comparability and consistency, practical implementation may become extremely complex in certain situations. Historical information may not be readily available, earlier transactions may have been structured differently under previous GAAP, and some accounting assessments may require hindsight if reconstructed retrospectively. In such cases, forcing full retrospective application could reduce reliability instead of improving financial reporting quality.

Recognising these practical limitations, Ind AS 101 incorporates a combination of mandatory exceptions and optional exemptions.

3. Mandatory Exceptions from Retrospective Application

Certain areas under Ind AS 101 prohibit retrospective application altogether. These are commonly referred to as mandatory exceptions. The objective behind these restrictions is to prevent entities from reconstructing past judgments using information that became available only after the relevant reporting period.

In substance, these exceptions ensure that first-time adoption does not involve the use of hindsight in a manner that could distort the economic reality reflected in earlier financial statements.

The mandatory exceptions are primarily contained in specific paragraphs of Ind AS 101 and Appendix B to the standard. These provisions restrict retrospective application in selected areas where reconstruction of historical accounting information may either be impracticable or inconsistent with faithful representation.

The rationale behind these exceptions is particularly important. Financial reporting should reflect conditions and expectations that existed at the relevant reporting dates rather than outcomes known subsequently. If entities were permitted to reassess historical estimates or recognition decisions using later information, the resulting financial statements could lose neutrality and comparability.

Accordingly, mandatory exceptions act as safeguards that preserve the integrity of the transition process.

4. Optional Exemptions Available to First-Time Adopters

Alongside mandatory exceptions, Ind AS 101 also grants several optional exemptions that ease the burden of transition. These exemptions provide entities with practical relief from reconstructing historical accounting information in situations where the costs and complexity of retrospective application may outweigh the benefits.

Unlike mandatory exceptions, these exemptions are elective in nature. Entities may choose whether to apply them depending on operational feasibility, availability of historical data, and the expected impact on financial reporting.

Many of these exemptions are derived from IFRS 1 and incorporate transition provisions that originally existed within other IFRS standards and interpretations. Instead of requiring entities to separately navigate historical transitional guidance contained across multiple standards, Ind AS 101 consolidates these reliefs into a single transition framework.

This approach simplifies implementation while ensuring consistency in first-time adoption practices.

Click Here To Read The Full Article

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Notification No. S.O. 2314(E); Dated: 08.05.2026

The Ministry of Labour and Employment has notified the appointment of:

• Chief Labour Commissioner (Central), and
• Deputy Chief Labour Commissioners (Central)

as Appellate Authorities under the Industrial Relations Code, 2020.

1. Statutory Basis

• The notification has been issued under Section 32 of the Industrial Relations Code, 2020

2. Territorial Jurisdiction

• The notification specifies the territorial jurisdiction of the respective regional offices
• Covers various States and Union Territories

3. Role of Appellate Authorities

The appointed authorities will:

• Hear and decide appeals under the Industrial Relations Code
• Ensure proper adjudication and administrative review mechanisms

4. Supersession of Earlier Notification

• The present notification supersedes the earlier notification issued in 2016

5. Objective of the Notification

The move aims to:

• Strengthen implementation of the Industrial Relations Code, 2020
• Provide structured appellate mechanisms
• Enhance administrative clarity and labour governance

6. Conclusion

The notification operationalises the appellate framework under the Industrial Relations Code by formally designating appellate authorities and defining their territorial jurisdiction for effective dispute resolution and regulatory administration.

Click Here To Read The Full Notification

The post Govt. Appoints Appellate Authorities Under IR Code 2020 appeared first on Taxmann Blog.

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Circular No. HO/38/44/12(3)2025-MIRSD-TPD1/I/10705/2026; Dated: 07.05.2026

The Securities and Exchange Board of India (SEBI) has discontinued the Investor Risk Reduction Access (IRRA) platform with immediate effect.

1. Reason for Discontinuation

• Stock exchanges highlighted that the IRRA platform had become structurally redundant

This follows implementation of several enhanced resilience and risk management frameworks across market infrastructure.

2. Developments Leading to the Decision

SEBI noted the introduction of:

• Enhanced Business Continuity Planning and Disaster Recovery (BCP-DR) requirements
• Stronger cyber resilience frameworks
• The Market Security Operations Centre (M-SOC) framework
• Improved mechanisms for handling technical glitches and disruptions

3. Directions to Stock Exchanges

Exchanges have been advised to review and strengthen the Contingency Pool Trading facility

This is intended to ensure continued operational resilience and investor protection

4. Regulatory Objective

The move reflects SEBI’s effort to:

• Rationalise overlapping systems
• Rely on upgraded and integrated cybersecurity and continuity frameworks
• Enhance overall market infrastructure efficiency

5. Conclusion

SEBI’s discontinuation of the IRRA platform signals confidence in the strengthened resilience architecture of market infrastructure institutions, while continuing focus on robust contingency and risk management mechanisms.

Click Here To Read The Full Circular

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Editorial Team – [2026] 186 taxmann.com 275 (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. Switzerland Extends Withholding Tax Exemption for Too-Big-to-Fail (TBTF) Instruments Until 2031

On April 30, 2026, the Swiss Federal Department of Finance announced an extension of the withholding tax exemption on interest arising from financial instruments issued by systemically important (“too-big-to-fail” or TBTF) banks.

The extension of the withholding tax exemption provisions will enable banks to continue issuing TBTF instruments in Switzerland on competitive terms, thereby supporting financial stability. However, these provisions will remain effective only until December 31, 2031. This interim extension will provide the legislature with an opportunity to adopt permanent regulations within the framework of the Federal Council’s draft legislation on banking stability. In its draft law, the Federal Council will propose the introduction of provisions with indefinite validity.

Since January 1, 2013, the Federal Withholding Tax Act has contained temporary exemption provisions for interest on TBTF instruments, such as bail-in bonds and write-off bonds. These provisions have been extended twice, most recently until December 31, 2026.

On December 19, 2025, Parliament approved the extension of the derogation provisions. As the referendum period expired unused on April 17, 2026, the extension of the exemption provisions will come into force on January 1, 2027.

Source – Dept. of Finance

2. Belgium–Liechtenstein Double Taxation Agreement Signed

On 4 May 2026, during the 8th European Political Community Summit in Yerevan, Prime Minister Brigitte Haas and Prime Minister Bart De Wever signed a Double Taxation Agreement (DTA) between Liechtenstein and Belgium.

The agreement aims to eliminate double taxation and provide a clear tax framework for individuals and legal entities engaged in cross-border activities. It is aligned with OECD international standards and incorporates the OECD/G20 BEPS Project measures to curb tax evasion and tax avoidance.

The DTA covers income and property taxes and provides that no withholding tax shall apply on intra-group dividends, inter-company loans, or royalties to encourage cross-border investment. It also contains provisions relating to asset structures, investment funds, pension funds, exchange of information, mutual assistance in tax collection, and a mutual agreement procedure with an arbitration clause for resolving complex double taxation disputes.

The agreement is expected to strengthen the economic and investment relationship between Liechtenstein and Belgium by enhancing legal certainty and promoting bilateral cooperation.

Source – Government Principality of Liechtenstein

Click Here To Read The Full Article

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Case Details: Deputy Commissioner of Income-tax vs. Kantar GDC India (P.) Ltd. - [2026] 185 taxmann.com 876 (Hyderabad-Trib.)

Judiciary and Counsel Details

• Ravish Sood, Judicial Member & Madhusudan Sawdia, Accountant Member
• Ms Ananya Kapoor, Adv. for the Appellant.
• Dr Narendra Kumar Naik, CIT-DR for the Respondent.

Facts of the Case

The assessee company was engaged in providing market research and data processing services. During the transfer pricing assessment, the TPO adjusted interest on delayed receivables from Associated Enterprises (AEs). For this purpose, the TPO allowed a 60-day credit period and applied SBI short-term deposit rates to compute the interest adjustment.

On appeal, the CIT(A) directed the AO/TPO to benchmark the interest using LIBOR plus 200 basis points instead of SBI deposit rates. The CIT(A) also allowed a credit period of 120 days while computing interest on outstanding receivables from AEs.

Aggrieved by the relief granted by the CIT(A), the Revenue preferred an appeal before the Tribunal. During the course of the hearing, the assessee submitted an alternative plea that, if the 120-day credit period was not accepted, a 90-day period should at least be allowed, drawing support from section 92CE read with Rule 10CB, which deals with secondary adjustments.

ITAT Held

The Tribunal upheld the application of LIBOR plus 200 basis points for benchmarking delayed receivables. However, it was observed that the determination of a reasonable credit period depends on the facts of each case and cannot be uniformly fixed at either 90 days or 120 days merely based on earlier decisions or statutory provisions operating in a different context.

The Tribunal further noted that, in earlier assessment years, the assessee had disputed only the rate of interest adopted by the TPO and had never challenged the credit period allowed by the department. According to the Tribunal, this indicated that the assessee had accepted the credit period adopted in those years. Accordingly, the AO/TPO was directed to follow the same credit period as accepted in AY 2013-14, rather than granting 120 days as a matter of course.

On the assessee’s reliance upon section 92CE read with Rule 10CB, the Tribunal clarified that those provisions apply specifically to secondary adjustments and repatriation of excess money held by AEs. Therefore, the 90-day timeline prescribed therein could not be imported into the normal transfer pricing provisions for determining the credit period in cases involving delayed receivables.

List of Cases Reviewed

• Kantar GDC India (P.) Ltd. v. Dy. CIT [2024] 164 taxmann.com 25 (Hyderabad – Trib.) (Para14) Followed

List of Cases Referred to

• Kantar GDC India (P.) Ltd. v. Dy. CIT [2024] 164 taxmann.com 25 (Hyderabad – Trib.) (para 7)
• DGS Technical Services (P.) Ltd. v. Dy. CIT [2025] 180 taxmann.com 266 (Hyderabad – Trib.) (para 8)
• TNS India (P.) Ltd. v. Asstt. CIT, Circle-2 (3), Hyderabad [2017] 77 taxmann.com 356/162 ITD 556 (Hyderabad – Trib.) (para 9)
• TNS India (P.) Ltd. v. Dy. CIT, Circle-2 (3), Hyderabad [2015] 57 taxmann.com 165/40 ITR(T) 125 (Hyderabad – Trib.) (para 9)
• TNS India (P.) Ltd. v. Dy. CIT, Circle- 2 (3), Hyderabad [2015] 56 taxmann.com 268/69 SOT 22 (Hyderabad – Trib.) (para 9)
• TNS India (P.) Ltd. v. Asstt. CIT [2023] 156 taxmann.com 1002 (Hyderabad – Trib.) (para 9)
• OSI Systems (P.) Ltd. v. Dy. CIT [2021] 126 taxmann.com 233 (Hyderabad – Trib.) (para 10)
• Value Labs Technologies v. ITO [IT Appeal No. 1919 (Hyd) of 2017, dated 5-4-2019] (para 15).

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