Recent Updates on Income Tax, GST, and Corporate Law – 29 January 2025
Income Tax
Update 1: CBDT Notification No. 10/2025 – Key Amendments for Venture Capital Funds, Finance Companies, Retail Schemes, and ETFs in IFSCs
The Ministry of Finance, via the Central Board of Direct Taxes (CBDT), has introduced pivotal amendments to the Income Tax Rules, 1962. Through Notification No. 10/2025, dated January 27, 2025, the Income-tax (Second Amendment) Rules, 2025, have been brought into effect from the date of their publication in the Official Gazette. These changes introduce fresh guidelines for venture capital funds (VCFs), finance companies, retail investment schemes, and exchange-traded funds (ETFs), specifically tailored for operations within International Financial Services Centres (IFSCs). Follow the link to Download the Notification-https://incometaxindia.gov.in/communications/notification/notification-10-2025.pdf
Update 2: ITAT Surat Deletes Addition made on Account of Cash Deposits during Demonetization
In the case of Jehan Percy Variava Vs ITO (ITA No. 612/SRT/2024), the ITAT Surat deleted addition made on account of undisclosed cash deposits during demonetization period after observing that assessee has substantiate means of income for depositing cash.
The ITAT held that the AO made addition of cash deposit in absence of any details filed by the assessee. Detailed statements to explain agricultural income were filed before CIT (A). The bank accounts wherein cash were deposited are joint accounts with father and mother. There was total deposit of Rs.24,07,000/- which was duly explained before CIT (A). During previous AYs, assessee along with his co-owners consistently disclosed agricultural income in ITR-2A. Thus, the assessee has sufficient earnings to substantiate the cash deposits. The CIT(A) also accepted that, but only due to accidental omission, he failed to deliver clear finding in final decision. Thus, the Appeal was partly allowed in favour of assessee.
Update 3: US President proposes abolishing income tax & Tax foreign nations to enrich American citizens
US President Donald Trump on Monday proposed abolishing income tax for US citizens, aiming to boost disposable income for individuals and families, as he described the move as a step toward restoring America to the “system that made us richer”. Trump argued that the period from 1870 to 1913 was the wealthiest in US history, when a tariff-based economic system was in place. He highlighted that the country generated “enormous” revenue through import tariffs during that era.
Goods & Services Tax (GST)
Update 1: GST Exemption available to payment aggregators in relation to settlement of an amount, up to Rs.2000 in a single transaction, transacted through credit card, debit card, charge card or other payment card services
In a recent update, as recommended by the 55th GST Council, the CBIC, vide its Circular No. 245/02/2025-GST, clarified that GST exemption under Sl. No. 34 of notification No. 12/2017-CTR dated 28.06.2017 is available to RBI regulated Payment Aggregators (PAs) in relation to settlement of an amount, up to two thousand rupees in a single transaction, transacted through credit card, debit card, charge card or other payment card services, as PAs fall within the definition of ‘acquiring bank’ given in the Explanation to the said exemption entry. It is also clarified that this exemption is limited to payment settlement function only, which involves handling of money, and does not cover Payment Gateway (PG) services.
Update 2: No GST on penal charges being levied by Regulated Entities (REs) such as banks & NBFCs
As recommended by the 55th GST Council, the CBIC, vide its Circular No. 245/02/2025-GST, clarified that no GST is payable on the penal charges levied by Regulated Entities like banks and NBFCs, in compliance with RBI directions dated 18.08.2023, for non-compliance with material terms and conditions of loan contract by the borrower.
Corporate Law
Update 1: MCA Imposes Penalty on Private Limited Company and its Directors for Non-Filing of Financial Statements for 5 Consecutive years u/s 137(3) of Companies Act
Complaints from the Reserve Bank of India (RBI) were received that this company has not filed its financial statements since incorporation, which it was supposed to file by virtue of Section 137(1) of the Companies Act. The adjudicating authority reached the conclusion that the company was liable for penal action as per Section 137(3) of the Companies Act, 2013. Section 137 (3) of the Companies Act deals with the imposition of a penalty when a company fails to file its financial statements.
Thus, the penalty was imposed on both the company and its directors. This order was issued by Sitaram, Registrar of Companies & Adjudicating Officer, Chhattisgarh.
Update 2: MCA imposes Penalty on listed company for failure to appoint Woman Director
In a recent order of adjudication passed under Section 454 by the Ministry of Corporate Affairs (MCA), the Registrar of Companies (ROC) imposed a penalty of Rs. 3.13 lakhs on a listed company for its failure to appoint a woman director within the stipulated 3 months time period according to Section 149(1) of the Companies Act, 2013. In this case, the company, TPI India Limited, has been registered under the provisions of the Companies Act, 1956. By virtue of Section 149 of the Companies Act, at least one woman director should be included in the panel of the board of directors of a listed company.
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