Circular no. HO/17/11/24(1)2026-DDHS-POD1/I/5967/2026; Dated: 27.02.2026

The Securities and Exchange Board of India (SEBI) has modified Chapter IX of the NCS Master Circular relating to the appointment of third-party reviewers or certifiers for green debt securities. The changes aim to align the framework for green debt securities with the operational norms prescribed for ESG debt securities (other than green debt securities) under SEBI’s circular dated June 05, 2025.

Background and Need for Alignment

Chapter IX of the NCS Master Circular currently prescribes requirements for appointing a third-party reviewer/certifier for initial and ongoing disclosures relating to green debt securities.

Subsequently, SEBI issued a circular on June 05, 2025, specifying an operational framework for ESG debt securities (excluding green debt securities), including:

• Initial disclosure requirements

• Continuous disclosure requirements

• Appointment of an independent third-party reviewer/certifier

To ensure consistency across ESG-labelled instruments such as green bonds, social bonds, and sustainability bonds, SEBI has revised the provisions applicable to green debt securities.

Mandatory Appointment of Independent Reviewer/Certifier

Under the revised framework, issuers of green debt securities must appoint an independent third-party reviewer or certifier to confirm that:

• The issuance complies with regulatory definitions of green debt securities, and

• Disclosure requirements prescribed by SEBI are duly met.

This requirement applies to both initial issuance and ongoing disclosure obligations.

Independence and Eligibility Criteria

The independent reviewer or certifier must meet strict independence and competency standards:

• Must be independent of the issuer, its directors, senior management, and key managerial personnel

• Must be remunerated in a manner that prevents conflicts of interest

• Must possess relevant expertise in evaluating ESG debt securities and related disclosures

These conditions are intended to ensure objective and credible certification.

Disclosure of Scope of Review

The scope of review to be conducted by the independent third-party reviewer/certifier must be clearly specified in the offer document for the green debt securities.

This will enable investors to understand the extent and nature of external validation supporting the issuance.

Effective Date

The revised provisions modifying Chapter IX of the NCS Master Circular will apply with immediate effect.

Objective of the Revision

The modification seeks to:

• Harmonise requirements across green, social, and sustainability-linked debt securities

• Strengthen credibility and transparency of ESG-labelled instruments

• Ensure independent verification of compliance with regulatory definitions and disclosures

• Enhance investor confidence in ESG debt markets

The revised framework reinforces SEBI’s commitment to robust governance and transparency in the growing ESG debt securities market.

Click Here To Read The Full Circular

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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 illustrations. This week’s edition explores the challenges non-financial listed companies face in adopting Ind AS, focusing on issues like equity reconciliation, profit adjustments, policy alignment, and the application of new standards in the first year of adoption.

Introduction

The adoption of Indian Accounting Standards (Ind AS) in India marked a significant shift from the traditional Indian GAAP framework, aimed at aligning financial reporting with global best practices. To ensure a smooth transition, the implementation was carried out in phases, allowing companies, auditors, regulators, and stakeholders to gradually adjust to the new standards. This phased approach addressed key issues such as net worth thresholds, mandatory and voluntary adoption, interim and annual reporting requirements, and first-time adoption disclosures. The roadmap also emphasises transparency through reconciliations, detailed disclosures, and consistent application of accounting policies, ensuring that users of financial statements can clearly understand the impact of moving to Ind AS.

By providing insights on these key areas, this document aims to guide companies, auditors, and stakeholders in understanding the process, challenges, and compliance requirements associated with transitioning from Indian GAAP to Ind AS.

1. Phased Roadmap for the Implementation of Ind AS in India

The implementation of Indian Accounting Standards (Ind AS) in India was carried out in phases to ensure a smooth transition from the existing Indian GAAP. This phased approach allowed regulators, companies, auditors, and users of financial statements to progressively adapt to the new reporting framework.

In Phase I, the mandatory adoption of Ind AS became effective for accounting periods starting on or after 1st April 2016. This phase applies to companies whose equity or debt securities were listed on, or in the process of being listed on, any recognised stock exchange in India or internationally. It also applied to unlisted companies with a net worth of ₹500 crore or more. For these entities, the first Ind AS financial statements were to be prepared for the year ending 31st March 2017, with the date of transition being 1st April 2015.

Phase II began with accounting periods starting on or after 1st April 2017. Under this phase, the application of Ind AS became mandatory for all listed companies and companies in the process of listing, excluding those listed on the SME exchange, regardless of net worth. For unlisted companies, Ind AS applied to those with a net worth of ₹250 crore or more but less than ₹500 crore. Entities under this phase prepared their first Ind AS financial statements for the year ending 31st March 2018, with the transition date set as 1st April 2016.

This phased implementation ensured that the transition to Ind AS was gradual, providing time for necessary adjustments to be made by all involved parties.

Also See – Practical Insights on Ind ASs and SAs – An Overview of Transitioning Framework Under Ind AS 101

2. Determination and Computation of Net Worth for the Purpose of Ind AS Applicability

Net worth is defined under section 2(57) of the Companies Act, 2013. It represents the aggregate of paid-up share capital, all reserves created out of profits and securities premium account after deducting accumulated losses, deferred expenditure and miscellaneous expenditure not written off.

The purpose of this definition is to measure the real financial strength of the company based on capital and retained earnings.

While computing net worth for Ind AS applicability, certain items are specifically excluded because they do not represent realised financial capacity. These exclusions include revaluation reserves, write-back of depreciation and reserves created out of amalgamation.

Net worth for applicability purposes is computed strictly on the basis of standalone financial statements and not consolidated financial statements. The computation is carried out under the existing accounting framework applicable at that time, typically Indian GAAP, because the decision regarding applicability precedes the adoption of Ind AS. The practical challenges companies face in determining and maintaining Ind AS applicability based on net worth thresholds are as follows:

2.1 Whether a Subsequent Reduction in Net Worth Below ₹500 Crore Affects Ind AS Applicability Once Triggered?

If a company had a net worth of ₹500 crore or more as at 31 March 2014, the threshold condition is considered to have been met on that audited reporting date. Accordingly, Ind AS adoption becomes mandatory in accordance with the implementation phase prescribed for that category of companies.

Once this trigger is activated, the requirement to apply Ind AS continues in subsequent years. A later reduction in net worth below ₹500 crore does not reverse or invalidate the initial applicability.

2.2 Whether Projected or Anticipated Net Worth Affects Ind AS Threshold Determination?

If an unlisted company’s net worth reaches ₹250 crore or more as at 31 March of a financial year, Ind AS becomes mandatory from 1 April of the immediately following financial year.

The determining factor is the audited net worth as at the reporting date. Projections, expected growth, or anticipated reductions in net worth are not considered. Once the prescribed threshold is met on the audited balance sheet date, adoption of Ind AS becomes compulsory.

2.3 Should Capital Reserve Arising From a Government Grant Be Included in Net Worth for Determining Ind AS Applicability?

Where a company has received a government grant in the nature of promoter’s contribution and has recognised it as a capital reserve in accordance with AS 12, Government Grants a question arises whether such capital reserve should form part of net worth for the purpose of determining Ind AS applicability.

For this purpose, reference is made to the definition of “net worth” under the Companies Act, 2013, which includes paid-up share capital and all reserves created out of profits and securities premium, after deducting accumulated losses and certain specified items. The Act does not specifically exclude capital reserves arising from promoter contributions.

Accordingly, where a government grant is in substance a promoter’s contribution and has been credited to capital reserve, such reserve is generally considered as part of net worth for assessing Ind AS applicability, unless specifically excluded under the applicable legal provisions. The assessment must be aligned with the statutory definition and the substance of the transaction.

2.4 Whether Net Worth for Ind AS Applicability Is Computed Under Indian GAAP or Ind AS?

A common issue is whether net worth for assessing Ind AS applicability should be computed under Indian GAAP or under Ind AS. In practical terms, the evaluation is made based on the accounting framework currently followed by the company at the relevant reporting date. After determining whether the threshold criteria are met, the company then applies Ind AS from the prescribed date of adoption.

2.5 Determination of Ind AS Applicability for Companies in Existence as at 31 March 2014

A company that was in existence as at 31 March 2014 determines Ind AS applicability based on its net worth as on that date. If the prescribed threshold was met on that audited balance sheet date, Ind AS becomes applicable in accordance with the relevant phase of implementation.

2.6 Determination of Ind AS Applicability for Companies Not in Existence as at 31 March 2014

A company that was not in existence as at 31 March 2014 determines Ind AS applicability based on the first audited financial statements in which its net worth meets the prescribed threshold. Once the threshold is crossed on an audited reporting date, Ind AS becomes applicable from the immediately following financial year.

2.7. Does the Net Worth Reported in the First Audited Reporting Period Trigger Ind AS Applicability?

For companies preparing their first audited financial statements, the net worth reported in those statements is used to determine Ind AS applicability.

2.8. How Is Net Worth Determined for Ind AS Applicability When a Company Follows a Different Financial Year?

Where a company follows a financial year other than April–March, the relevant net worth for assessing Ind AS applicability is determined based on the audited financial statements for the financial year ending immediately before the reference date specified in the implementation roadmap.

For Example, If the roadmap specifies 31 March 2014 as the reference date and a company follows a January–December financial year, it will rely on its audited financial statements for the year ended 31 December 2013.

The net worth reported as at 31 December 2013 will be considered for determining whether the prescribed Ind AS threshold has been met.

2.9. Is Net Worth for Ind AS Applicability Tested Only Once?

Applicability of Ind AS is not a one-time assessment. Companies that do not meet the prescribed threshold initially are required to evaluate their net worth at every annual reporting date. Once the threshold is satisfied on any audited reporting date, Ind AS becomes applicable from the immediately succeeding financial year.

2.10. Does Ind AS Continue to Apply Even if Net Worth Subsequently Declines?

Once Ind AS becomes applicable to a company, the requirement continues even if its net worth subsequently declines below the prescribed threshold.

The framework operates on a “once triggered, always applicable” principle. A later reduction in net worth does not permit a return to Indian GAAP, unless a specific regulatory relaxation is granted and formally approved.

Click Here To Read The Full Article

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Case Details: S. Rajendran vs. Deputy Commissioner of Income-tax [2026] 183 taxmann.com 685 (SC)

Judiciary and Counsel Details

• Pamidighantam Sri Narasimha & Atul S. Chandurkar, JJ.
• Sajan Poovayya, Rajiv Shakdher, Krishnan Venugopal, Krishnan Venugopal, Sr. Advs., Bharadwajaramasubramaniam R., Diwaagar R.S., Priyadarshi Banerjee, Rishabh Singhle, Ms Leelavathi P., Ms Shrinithi S.R., Gokulnath S., Ms Vibha Shyam, Ms Raksha Agrawal, Harshvardhan Sharma, B. Dhanaraj, G. Ananda Selvam, Habib Muzaffar, Karan Khetani, Jonathan Ivan Rajan, Ms Sangamithra Loganathan, Krishnan Agarwal, Ms Elamathi M.S., Harnoor Singh, Labeeb Faaeq, Ms Nandini Kaushik, Siddharth Venugopal, Ms Umang Motiyani, Ms Prakriti Rastogi, Ms Aryama Singh Rajput, Advs., Sujoy Chatterjee, Anand Dilip Landge & Shivendra Singh, AORs for the Petitioner.
• S. Dwarakanath, A.S.G., Rajat Nair, Zoheb Hussain, Mrs. Gargi Khanna, Mrs. Madhulika Upadhyay Aor, Shashank Bajpai, Rajat Vaishnaw, Prabhakar Yadav, H. Siddharth Bhandari, Mudit Bansal, S. Vijay Adithya, Abhyudey Kabra, K. Gowtham Kumar, Vishwaditya Sharma, Ms Deeksha Gupta, Ms Harsha Tripathi, Ms Kanishka Singh, Subornadeep Bhattacharjee, K. Shiva, Rohan Dewan, Ms Aakriti Priya, Udayaditya Banerjee, Ms Suganya T.S., Parikshit Pitale, Krishnan Agarwal, Ms Elamathi M.S., Harnoor Singh, Labeeb Faaeq, Ms Nandini Kaushik, Siddharth Venugopal, Ms Umang Motiyani, Ms Prakriti Rastogi, Ms Aryama Singh Rajput, Advs., Raj Bahadur Yadav, Ms Madhulika Upadhyay, Balaji Srinivasan, Shivendra Singh, P.S. Sudheer, Ms Aanchal Tikmani, AORs & P.B. Suresh, Sr. Adv. for the Respondent.

Facts of the Case

A search was conducted under section 132 of the Income-tax Act. The search revealed that the promoters of the corporate debtor had transferred their 100 per cent shareholding to the beneficial owner, V, through an intermediary, for a consideration paid in demonetised high-value currency notes. Proceedings were initiated under the Prohibition of Benami Property Transactions Act, 1988 (Benami Act), and provisional attachment orders were passed attaching the immovable properties of the corporate debtor.

Meanwhile, the corporate debtor underwent the Corporate Insolvency Resolution Process (CIRP) and was later ordered into liquidation under the IBC Act. The liquidator challenged the provisional attachment before the NCLT, contending that the properties formed part of the liquidation estate and that the moratorium under section 14 of the IBC barred such attachment. The NCLT dismissed the application, and the matter reached the Supreme Court.

Supreme Court Held

The Supreme Court held that the Benami Act is concerned with identifying and extinguishing benami holdings through a confiscatory mechanism. At the same time, the IBC is directed toward the resolution and liquidation of a corporate debtor’s assets within a time-bound framework. The Act also establishes a distinct adjudicatory hierarchy and demarcates jurisdictional boundaries. Section 45 bars the jurisdiction of civil courts in respect of matters that the authorities or the Appellate Tribunal are empowered to determine. Section 46 provides for appeals to the Appellate Tribunal against orders of the Adjudicating Authority, with a further appeal to the High Court on questions of law.

Section 53 prescribes stringent punishment for benami transactions entered into to defeat the law, avoid statutory dues or defraud creditors. While section 60 clarifies that the provisions of the Act are in addition to, and not in derogation of, any other law, section 67 confers overriding effect in the event of inconsistency. The legislative scheme thus discloses a complete code. It was argued that in the present case, the IBC, being the later and more comprehensive insolvency legislation, must govern in the event of a conflict.

However, the property sought to be included in the liquidation estate had been provisionally attached for being a benami property, which cannot be overlooked. The Benami Act is a complete and self-contained code governing identification, provisional attachment, adjudication and confiscation of benami property, supported by a distinct appellate hierarchy. Exclusive jurisdiction over such determinations is conferred upon authorities constituted under the Benami Act. The IBC neither displaces this statutory mechanism nor empowers the NCLT to reopen findings rendered thereunder. Insolvency proceedings cannot be utilised to convert property held for another into distributable assets for creditors. The IBC contemplates distribution of the debtor’s estate, not assets impressed with a trust or held on behalf of a third party.

Accordingly, the Court held that the section 14 moratorium does not bar sovereign attachment under the Benami Act and applies only to creditor recovery actions where the corporate debtor has a beneficial interest. The appellants’ invocation of the IBC to challenge the attachment was misconceived and amounted to an abuse of process, and the appeals were therefore dismissed with exemplary costs.

List of Cases Reviewed

• Order of NCLAT, Chennai in CAAT (CH) (I)-292-2022 order dated 18-8-2022
• CAAT (CH) (I)-188-2022 order dated 13-3-2023 (para 26) affirmed
• State Bank of India v. Union of India [2026] 183 taxmann.com 418 (SC) (para 20.7)
• Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56 (SC) (para 20.7) followed

List of Cases Referred to

• Kiran Shah v. Enforcement Directorate 2022 SCC OnLine NCLAT 2 (para 13.1)
• Innoventive Industries Ltd. v. ICICI Bank Ltd. [2017] 84 taxmann.com 320/143 SCL 625 (SC) (para 14.2)
• Solidaire India Ltd. v. Fairgrowth Financial Services Ltd. [2001] 30 SCL 59 (SC) (para 14.3)
• Bacha F. Guzdar v. CIT (1954) 2 SCC 563 (para 14.8)
• Indian Overseas Bank v. Radhey Infra Solutions (P.) Ltd. [2025] 179 taxmann.com 328 (SC)/[2025] 190 SCL 712 (SC) (para 14.9)
• Kailash Assudani v. CIT [2017] 87 taxmann.com 361 (Madhya Pradesh) (para 17.7)
• Swiss Ribbons (P) Ltd. v. Union of India [2019] 101 taxmann.com 389 (SC)/[2019] 152 SCL 365 (SC) (para 18.1)
• Embassy Property Developments (P.) Ltd. v. State of Karnataka [2019] 112 taxmann.com 56 (SC)/[2020] 157 SCL 445 (SC) (para 18.2)
• State Bank of India v. Union of India [2026] 183 taxmann.com 418 (SC) (para 20.1)
• Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta [2021] 125 taxmann.com 150 (SC)/[2021] 167 SCL 241 (SC) (para 20.4)
• Controller of Estate Duty, Lucknow v. Aloke Mitra (1981) 2 SCC 121 (para 21).

The post IBC Cannot Override Benami Act Attachment – NCLT Lacks Jurisdiction | SC appeared first on Taxmann Blog.

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Case Details: Kudos Facililty Services vs. State of Andhra Pradesh [2026] 183 taxmann.com 604 (Andhra Pradesh)

Judiciary and Counsel Details

• R. Raghunandan Rao & T.C.D. Sekhar, JJ.
• M. Ravindra for the Petitioner.

Facts of the Case

The petitioner, a registered dealer engaged in supply of manpower services, was subjected to assessment proceedings for the tax period 2019-20. A pre-show cause notice in Form GST DRC-01A and a show cause notice in Form GST DRC-01 were issued alleging discrepancies in returns. As no objections were filed, an assessment order dated 12.06.2024 was passed and uploaded on the GST portal. The petitioner preferred an appeal, which was rejected. Thereafter, recovery proceedings were initiated by issuance of attachment notice in Form GST DRC-16. Challenging the assessment order and consequential proceedings, the petitioner filed a writ petition contending that the assessment order did not contain a Document Identification Number (DIN) and that the pre-show cause notice and show cause notice were invalid for want of signatures.

High Court Held

The High Court held that the petitioner was aware of the assessment proceedings and had failed to explain the delay in approaching the Court. The assessment order contained an auto-generated Reference Number (RFN), which is generated only upon digital signing of the order while uploading it on the GST portal. The Court observed that show cause notices and summary of assessment orders issued electronically cannot be generated without digital signatures, and affixture of such digital signature automatically results in generation of a unique identification number. Therefore, presence of the RFN/reference number was sufficient to establish valid authentication. The contention regarding absence of DIN or signature was rejected, and the writ petition was dismissed in favour of the Revenue.

List of Cases Reviewed

• Pedda Masthan Enterprises v. Asstt. Commissioner (ST) [2026] 183 taxmann.com 108 (Andhra Pradesh) (para 11), followed

List of Cases Referred to

• Pedda Masthan Enterprises v. Asstt. Commissioner (ST) [2026] 183 taxmann.com 108 (Andhra Pradesh) (para 11).

The post Absence of DIN Not Fatal if RFN Generated | HC appeared first on Taxmann Blog.

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Case Details: Biju Pappachan vs. Income-tax Officer - [2026] 183 taxmann.com 485 (Bangalore-Trib.)

Judiciary and Counsel Details

• Keshav Dubey, Judicial Member & Waseem Ahmed, Accountant Member
• Ms Akshatha Prasad, A.R. for the Appellant.
• Ganesh R Ghale, D.R. for the Respondent.

Facts of the Case

Assessee, a retired defence personnel, received pension and post-retirement benefits. The case was reopened on the ground that the assessee had not filed his return. In response to the notice, the assessee filed his return declaring a deduction under section 10(10) on account of death cum retirement gratuity and under section 10(10A) on account of the commuted value of pension.

The Assessing Officer (AO) treated the deductions as unexplained and added the same under the head ‘Salary’. AO also invoked the provisions of section 115BBE by stating that it applied to the aforesaid additions. The aggrieved assessee filed the instant appeal before the Tribunal.

ITAT Held

The Tribunal held that the AO was unjustified in disallowing the exemptions claimed by the assessee and adding them to his salary, especially when it was, in fact, completely exempt from income tax. AO affirmed that, in the absence of necessary documentary evidence, the deduction claimed by the assessee on account of death cum retirement gratuity and commuted value of pension remains unexplained. However, the AO received the salary certificate (Form 16) from the Air Force.

It is surprising to note that on the one hand, the AO himself disallowed the deduction and added the same under head salary, and on the other hand, invoked the provision of section 115BBE, which is completely unacceptable. Section 115BBE can only be invoked in the case of income tax referred to in sections 68 to 69D and not in the case of additions under the head ‘Salary’.

List of Cases Referred to

• Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC) (para 6.1)
• People Education & Economic Development Society v. ITO [2006] 100 ITD 87 (Chennai) (TM) (para 6.3)
• CIT v. K.S.P. Shanmugavel Nadar [1987] 30 Taxman 133/153 ITR 596 (Madras) (para 6.4).

The post Section 115BBE Not Applicable on Additions Under Salary Head | ITAT appeared first on Taxmann Blog.

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1. Facts

Tech-Serve Solutions Limited (hereinafter referred to as “the Company”) provides integrated software implementation and annual maintenance services to corporate customers. During the financial year, the company entered into a contract with “Metro Infrastructure Authority”, a government-owned entity, to implement a customised enterprise management system, including one year of post-implementation support.

The total contract price is ₹12,00,000, payable within 60 days of installation. The company has historically entered into similar contracts with government and quasi-government customers. Although contracts specify fixed pricing, past experience indicates that final settlement amounts are frequently renegotiated due to budgetary approvals and administrative delays. In several previous contracts with similar customers, the company accepted reduced payments to secure timely collection. For the current contract, management expects to agree to a reduction of approximately ₹3,00,000 during settlement negotiations, based on past practice.

The company completed the installation of the system and raised an invoice for the full contractual amount. The contract price reflects the company’s standard pricing structure, and the company does not ordinarily offer post-sale discounts at contract inception.

However, Metro Infrastructure Authority is currently facing financial constraints and has a history of delayed payments to vendors. While the customer has acknowledged the liability, payment remains outstanding at the reporting date. Based on past recovery experience with financially stressed government customers, the company estimates that approximately 20% of receivables from such customers may ultimately not be recovered due to collection risk rather than pricing adjustments.

How should the company determine the amount of revenue to be recognised at the time of software implementation under Ind AS 115, particularly in assessing whether the expected reduction in consideration represents an implicit price concession affecting the transaction price or a credit loss to be recognised separately?

2. Relevant Provisions

Ind AS 115 – Revenue from Contracts with Customers

Para 9(e) of Ind AS 115

An entity shall account for a contract with a customer that is within the scope of this Standard only when all of the following criteria are met:

…

(e) it is probable that the entity will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity shall consider only the customer’s ability and intention to pay that amount of consideration when it is due. The amount of consideration to which the entity will be entitled may be less than the price stated in the contract if the consideration is variable because the entity may offer the customer a price concession.

Para 51 of Ind AS 115

An amount of consideration can vary because of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, or other similar items. The promised consideration can also vary if an entity’s entitlement to the consideration is contingent on the occurrence or non-occurrence of a future event.

Para 126AA of Ind AS 115

An entity shall reconcile the amount of revenue recognised in the statement of profit and loss with the contracted price showing separately each of the adjustments made to the contract price, for example, on account of discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, etc., specifying the nature and amount of each such adjustment separately.

Para 107 of Ind AS 115

If an entity performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, the entity shall present the contract as a contract asset, excluding any amounts presented as a receivable. A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has transferred to a customer. An entity shall assess a contract asset for impairment in accordance with Ind AS 109. An impairment of a contract asset shall be measured, presented and disclosed on the same basis as a financial asset that is within the scope of Ind AS 109.

Click Here To Read The Full Story

The post Ind AS 115 | Transaction Price in Govt Contracts with Renegotiation appeared first on Taxmann Blog.

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Editorial Team – [2026] 183 taxmann.com 722 (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. Sri Lanka Introduces Revised Criteria and Tax Concessions for Strategic Development Projects

Sri Lanka’s Ministry of Finance has issued Regulations under the Strategic Development Projects Act, No. 14 of 2008 (originally published in Gazette No. 2474/66 dated 8 February 2026). The Regulations prescribe the eligibility conditions for recognition as a Strategic Development Project and specify the applicable tax concessions.

The eligibility framework is divided into three categories/sectors, with the corporate income tax holiday (exemption) periods as follows:

Category A – Infrastructure, Services & Utilities, and Tourism and Leisure (excluding casinos and any form of betting and gaming)

• 6-year holiday – Investment exceeding USD 50 million up to USD 150 million and creation of at least 100 local jobs.
• 8-year holiday – Investment exceeding USD 150 million up to USD 300 million and creation of at least 100 local jobs.
• 10-year holiday – Investment exceeding USD 300 million and creation of at least 100 local jobs.

Category B – Manufacturing

• 5-year holiday – Investment exceeding USD 50 million up to USD 100 million and creation of at least 250 local jobs.
• 8-year holiday – Investment exceeding USD 100 million up to USD 150 million and creation of at least 250 local jobs.
• 10-year holiday – Investment exceeding USD 150 million and creation of at least 250 local jobs.

Category C – Agriculture; Educational, Technological Establishments; and Information Communication Technology

• 5-year holiday – Investment exceeding USD 50 million up to USD 100 million and creation of at least 50 local jobs.
• 8-year holiday – Investment exceeding USD 100 million up to USD 150 million and creation of at least 50 local jobs.
• 10-year holiday – Investment exceeding USD 150 million and creation of at least 50 local jobs.

Projects that satisfy the prescribed eligibility conditions are also exempt from Customs Import Duty (CID), Value Added Tax (VAT), Ports and Airports Development Levy (PAL), and CESS (under the Sri Lanka Export Development Act) on the import of capital goods and construction materials during the project implementation period.

For this purpose, the “project implementation period” means the period commencing from the date specified in the agreement between the Board of Investment of Sri Lanka and the project enterprise and ending on the date of commencement of commercial operations as certified by the Board of Investment.

Source – The Strategic Development Projects Act, No. 14 of 2008

2. Hong Kong Budget 2026-27 – Key Tax Measures

On 25 February 2026, Hong Kong Financial Secretary Paul Chan presented the 2026-27 Budget, proposing several tax changes. Key measures include:

• A 100% reduction of salaries tax, personal assessment tax, and profits tax for YA 2025/26, capped at HKD 3,000 per case.
• Rates concessions for domestic and non-domestic properties for the first two quarters of 2026/27, capped at HKD 500 per property.
• Increase in basic and single parent allowance to HKD 145,000 and married person’s allowance to HKD 290,000.
• Child allowance raised to HKD 140,000.
• Higher allowances for maintaining dependent parents/grandparents and increased elderly residential care deduction ceiling to HKD 110,000.
• Stamp duty on residential properties above HKD 100 million increased to 6.5%.
• Expanded tax concessions for family offices, funds, REITs, Corporate Treasury Centres, and intra-group restructuring.
• Implementation of the Crypto-Asset Reporting Framework and revised Common Reporting Standard within two years.
• Introduction of preferential tax packages for targeted enterprises and enhanced concessions for the maritime sector.
• Refinement of IP tax regime and exploration of incentives for gold trading institutions.

Additionally, Hong Kong has implemented the Pillar Two global minimum tax, expected to generate about HKD 15 billion annually from 2027-28.

Source – Budget.gov

Click Here To Read The Full Article

The post [World Tax Updates] Sri Lanka Concessions | Hong Kong Budget and More appeared first on Taxmann Blog.

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Case Details: Priti Builders vs. Deputy Commissioner of State Tax, Bally and Salkia Charge - [2026] 183 taxmann.com 407 (Calcutta)

Judiciary and Counsel Details

• Om Narayan Rai, J.
• Debasish Ghosh & Tanmay Hazra for the Petitioner.
• Ms Tanmoy Chakraborty & Saptak Sanyal for the Respondent.

Facts of the Case

The petitioner underwent a search and seizure at its business premises, with documents, books, and the CPU confiscated. Despite requesting copies of the seized records and the return of the CPU to prepare a defence, access was denied. A show cause notice (SCN) and personal hearing were issued, but the petitioner missed the hearing and reiterated the request in writing. The jurisdictional officer confirmed the demand without providing the materials or conducting a meaningful hearing, depriving the petitioner of a fair opportunity to contest. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that, under Section 74 read with Sections 67 and 75 of the CGST Act and the West Bengal GST Act, the denial of access to the seized documents and the CPU violated the principles of natural justice. The Court observed that the petitioner was unable to effectively contest the demand or pursue a proper appeal in the absence of these materials. Accordingly, the impugned order was not to be given effect and was to be treated as an additional SCN. The Court directed the authorities to supply the seized records or copies, including the CPU, and to continue the proceedings only after affording a meaningful personal hearing.

The post HC Orders Supply of Seized Records | Treats Order as SCN appeared first on Taxmann Blog.

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Case Details: New India Assurance Co. Ltd. vs. Rekha Chaudhary - [2026] 183 taxmann.com 680 (SC)

Judiciary and Counsel Details

• Aravind Kumar & Prasanna B. Varale, JJ.
• Salil Paul, Sahil Paul, Sandeep Dayal, Ms Kanupriya Mehta, Ms Jyoti, Advs. & Ms Manjeet Chawla, AOR for the Appellant.
• Ashish Pandey, AOR for the Respondent.

Facts of the Case

In the instant case, the deceased employee was a commercial driver employed by the respondent 4/employer. The deceased collapsed and died while driving the employer’s insured vehicle.

The Respondents 1 to 3, legal heirs of the deceased, filed a claim petition before the Commissioner. The Commissioner found an employer-employee relationship, held that death occurred during and in the course of employment, and fixed compensation at about Rs. 7.37 lakhs along with 12% interest from the date of the incident.

It was noted that the vehicle was covered by a valid commercial vehicle insurance policy issued by the appellant-insurance company. Further, the Commissioner allowed the respondent no. 4 to secure indemnification of compensation from the insurer and issued a show-cause notice to the respondent no. 4 proposing a penalty under Section 4A(3)(b) of the Employees’ Compensation Act, 1923, for default in payment within one month of the amount falling due.

Further, it was noted that, as the employer neither appeared nor replied, the Commissioner imposed a 35% penalty of about Rs. 2.58 lakhs on the employer for the delay without justification.

The claimants appealed to the High Court, seeking an enhancement of compensation and challenging the fixation of primary liability on the employer rather than on the insurer. The High Court declined enhancement but set aside the Commissioner’s orders to the extent they imposed primary liability on the employer and fastened liability for compensation, interest, and penalty on the appellant–insurer. Thereafter, an appeal was made before the Supreme Court.

Supreme Court Held

The Supreme Court observed that the liability to pay a penalty under Section 4A(3)(b) of the Employees’ Compensation Act, 1923, is solely on the employer and cannot be fastened upon the insurer.

Further, the Supreme Court observed that the High Court erred in directing the appellant-insurer to bear a penalty in addition to compensation and interest.

The Supreme Court held that the impugned order was to be set aside to the extent it imposed liability to pay a penalty on the appellant-insurer, and that said liability was to be fastened upon the employer.

List of Cases Reviewed

• Order of the Delhi High Court in F.A.O No. 147 of 2021 dated 21.05.2025 (para 25) set aside
• Ved Prakash Garg v. Premi Devi 1997 taxmann.com 2061 (SC)/1997 (8) SCC 1 (para 23) followed

List of Cases Referred to

• Ved Prakash Garg v. Premi Devi 1997 taxmann.com 2061 (SC) (para 10)
• Fulmati Dhramdev Yadav v. New India Assurance Co. Ltd. [2023] 9 taxmann.com 1546 (SC) (para 16)
• Sheela Devi v. Oriental Insurance Company Limited [2025] 4 taxmann.com 2014 (SC) (para 24).

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Press Release No.14/2026, Dated: 26.02.2026

The Securities and Exchange Board of India (SEBI) has cautioned investors against unregistered entities offering ‘account handling’ services that promise risk-free profits in demat and trading accounts.

1. Modus Operandi of Unregistered Entities

SEBI has observed that certain individuals and entities are approaching investors with offers to manage their trading accounts and generate assured returns. These entities typically:

• Seek access to investors’ demat and trading account login credentials
• Execute trades on behalf of investors
• Claim a share in the profits generated
• Do not assume any responsibility for losses incurred

Such arrangements expose investors to financial risks, misuse of account credentials, and potential regulatory violations.

2. Risks to Investors

Investors who share their account access details with unregistered entities risk:

• Unauthorised trading and financial losses
• Misuse of personal and financial information
• Lack of legal recourse in case of disputes or losses
• Exposure to fraudulent or manipulative trading practices

SEBI has emphasised that promises of risk-free or guaranteed profits are misleading and should be treated with caution.

3. SEBI Advisory to Investors

SEBI has advised investors to:

• Not share login credentials of demat or trading accounts with any third party
• Deal only with SEBI-registered intermediaries such as brokers and investment advisers
• Use only authentic and verified trading applications
• Verify the registration status of intermediaries on SEBI’s official website before engaging their services

4. Conclusion

The advisory aims to protect investors from fraudulent account-handling schemes and to encourage engagement only with authorised and regulated intermediaries. Investors are urged to remain vigilant and avoid sharing sensitive account information with unregistered or unknown persons.

Click Here To Read The Full Circular

The post SEBI Warns Against ‘Account Handling’ Stock Market Scams appeared first on Taxmann Blog.

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