GST Changes from 1 November 2026: Four Reliefs That Can Help Businesses Unlock Cash and Avoid Costly Mistakes

 Post-sale discounts, credit notes, GST refunds and export reliefs explained in simple language

By CA Surekha S Ahuja

A dealer earns a year-end rebate, but the original invoices do not mention it. A manufacturer has GST credit accumulating faster than it can use it. An exporter is waiting for a refund. A small business has filed its claim but is still waiting for the next step.

For businesses struggling with margins and working capital, these are not minor compliance issues. They affect the money available for stock, salaries, suppliers and growth.

From 1 November 2026, important GST amendments bring relief in these areas. Businesses gain greater flexibility in granting post-supply discounts, eligible inverted-duty refunds receive an express statutory basis for provisional processing, and the minimum refund restriction is removed for specified goods-export claims. Separate procedural changes aim to make refund processing faster.

The real benefit depends on understanding which restrictions have disappeared, which conditions remain and what action businesses should take.

At a glance: what becomes easier?

The problem	The relief	What you must still do
A post-sale discount was not agreed in advance or linked to specific invoices	Those two conditions are removed from the relevant discount provision	Issue the appropriate GST credit note and ensure the recipient reverses attributable ITC
Eligible ITC is accumulating under an inverted duty structure	Revised refund computation and provisional processing for eligible claims	Establish eligibility and reconcile the refund calculation
A goods-export refund falls below ₹1,000	The minimum restriction is removed for the specified category of goods exported with payment of tax	Satisfy the other applicable refund requirements
A refund application is waiting for acknowledgement	The prescribed acknowledgement period for relevant applications reduces from 15 days to 10 days	File a complete application and monitor the applicable procedure

1. Post-sale discounts: businesses can reward customers more flexibly

The old problem

A manufacturer offers a dealer a rebate based on annual purchases. The dealer achieves the target, but the rebate was not agreed in the manner previously required or cannot be linked to specific invoices.

Under the earlier Section 15(3)(b), excluding a post-supply discount from taxable value required an agreement entered into at or before the time of supply, specific linkage to the relevant invoices, and reversal of the attributable ITC by the recipient.

What changes from 1 November?

The agreement-timing and specific invoice-linkage requirements are removed.

A qualifying post-supply discount can therefore be excluded from taxable value even if the earlier conditions are not met. However, the supplier must issue a credit note in accordance with Section 34, and the recipient must reverse the ITC attributable to the discount in accordance with the law.

Example: A distributor earns a year-end rebate after achieving a purchase target. Under the amended provision, the absence of the earlier agreement or specific invoice linkage does not, by itself, prevent the rebate from qualifying.

The solution: Decide how each discount will be settled.

• A GST credit note may be used where the statutory conditions for reducing taxable value and output tax can be met.

• A financial or commercial credit note can settle the commercial concession without reducing output GST.

A financial credit note does not, by itself, reduce GST liability.

Who benefits? Manufacturers, wholesalers, dealers, distributors and businesses operating volume-based or performance-linked incentive schemes.

2. Credit notes: do not lose the benefit by missing the deadline

The amendment to Section 34(1) expressly recognises qualifying post-supply discounts as a ground for issuing credit notes. But the reporting deadline and the conditions for reducing output tax remain critical.

For relevant credit notes relating to FY 2025-26 supplies, the statutory cut-off is 30 November 2026 or the date of furnishing the relevant annual return, whichever is earlier.

A rebate recorded in the accounts is not enough. An internally prepared credit note is not the same as a credit note reported within the prescribed period.

Action before the deadline:

1. List all pending FY 2025-26 GST credit notes.

2. Check whether the relevant annual return has already been furnished.

3. Reconcile the credit notes with invoices, returns and the sales ledger.

4. Follow up with recipients on attributable ITC reversal.

5. Retain evidence supporting the tax adjustment.

IMS can help track document actions where applicable, but portal acceptance alone does not establish that every statutory condition has been met.

3. Inverted-duty refunds: more eligible ITC and a faster provisional route

The problem: A business pays more GST on eligible inputs than it collects on outward supplies. ITC accumulates, locking up money that could otherwise fund operations.

Two separate changes matter.

First: eligible input-services ITC. From 1 November 2026, qualifying input-services ITC availed on or after that date is included in the revised Net ITC computation for inverted-duty refunds under Rule 89(5), subject to the prescribed formula and conditions.

This is not a general refund for services taxed at a higher rate than outward supplies. The inverted-duty structure must still be established by comparing the tax rate on inputs with the rate on outward supplies.

Second: provisional refunds. The amendment to Section 54(6) expressly extends the provisional-refund framework to eligible inverted-duty claims. Under the risk-based process, 90% of the claimed amount is intended to be provisionally sanctioned for eligible claims, subject to the applicable conditions and exclusions.

For eligible claims, the system-based provisional refund order is to be generated within three working days of acknowledgement, including deemed acknowledgement, under the prescribed procedure.

This is not a guarantee that every applicant will qualify or receive payment without verification.

What about capital-goods ITC?

That is a later change. Eligible capital-goods ITC is brought into the prescribed refund computation from 1 April 2027, with attribution over 60 months and subject to the applicable rules. It must not be included as an entitlement available from November 2026.

The solution: Reconcile GSTR-1, GSTR-3B and GSTR-2B with the electronic credit ledger. Separate eligible input-goods and input-services ITC, apply the amended formula and check the relevant exclusions before filing.

4. Goods-export refunds: relief for small claims

The problem: An exporter has an eligible IGST refund on goods exported with payment of tax, but the amount is below ₹1,000.

The amendment to Section 54(14) removes the minimum refund restriction for this specified category of goods exports. Eligible claims should no longer be rejected merely because the refund falls below that minimum.

The change is specific to the stated category. It should not automatically be extended to LUT-based export refunds, export-of-services claims or unrelated refund applications.

The solution: Identify small outstanding IGST refund claims for goods exported with payment of tax. Reconcile export invoices, shipping bills and GST returns, and assess the claims under the amended provision.

The minimum-amount relief does not remove the need to establish the export or satisfy the other applicable refund conditions.

5. Refund processing: shorter acknowledgement time, but no promise of instant payment

The related CGST Rules amendments introduce several procedural improvements.

• Acknowledgement: The prescribed period for acknowledgement or communication of deficiencies in relevant refund applications reduces from 15 days to 10 days. Deemed acknowledgement applies where the prescribed action is not taken within the applicable period.

• Provisional refunds: The risk-based process provides for 90% provisional sanction for eligible zero-rated and inverted-duty claims, subject to prescribed conditions. For eligible claims, the system-based provisional refund order is to be generated within three working days of acknowledgement.

• Excess cash-ledger balances: Eligible excess balances in the electronic cash ledger can be refunded through an automated process, subject to applicable adjustments and conditions.

These mechanisms are different. A refund of excess cash in the electronic cash ledger is not the same as a refund of accumulated ITC, and provisional sanction is not final sanction of every claim.

The substituted FORM GST RFD-01 and specified related documentation changes take effect from 1 December 2026. Businesses should prepare for these separately from the changes effective on 1 November.

Important dates

Date	What to do
1 November 2026	Apply the amended statutory provisions and the relevant Rules from their respective commencement dates
30 November 2026	Report relevant FY 2025-26 credit notes by this date or the earlier date of furnishing the relevant annual return
1 December 2026	Follow the substituted RFD-01 requirements where applicable
1 April 2027	Apply the prescribed capital-goods ITC refund provisions to eligible credit from this date, subject to the Rules

A practical checklist for businesses

• Giving discounts? Review rebate schemes and decide between a GST credit note and a financial credit note.

• Have pending credit notes? Protect the statutory reporting deadline and follow up on recipient ITC reversal.

• Have accumulated ITC? Recalculate eligible inverted-duty refunds under the amended formula.

• Export goods with payment of tax? Review small eligible refund claims.

• Waiting for a refund? Check acknowledgement, deficiency communication and return reconciliation.

• Using ERP or accounting software? Update the relevant credit-note and refund workflows.

CA S. Ahuja Perspective

For a business struggling with tight margins, money locked in GST is money unavailable for operations. A rebate that cannot be correctly reflected in GST creates avoidable disputes. A missed credit-note deadline can cost the expected tax benefit. An inadequately reconciled refund claim can delay recovery even when the underlying entitlement exists.

The November changes offer genuine relief, but the benefit will depend on implementation.

Review the discount. Reconcile the credit. Recalculate the refund. Protect the deadline.

The real measure of GST reform is not the number of amendments announced. It is whether businesses can use the revised law to recover eligible money, reduce avoidable compliance friction and put cash back to work.

NRI & OCI Guide: Recovering Unclaimed Indian Shares and Dividends—From Claim to Repatriation

Part 2 of the series on recovering old Indian investments

By CA Surekha S Ahuja

An NRI family discovers that shares inherited from a parent are worth ₹35 lakh. The IEPF claim succeeds. But the original shareholder and spouse are both deceased, succession documents are incomplete, and the family wants to bring the recovered value abroad.

The claim is approved. Yet the family may still face three hurdles: proving who is legally entitled to the investment, receiving the shares or dividends correctly, and establishing the permitted route for transferring the money overseas.

Recovery is not complete merely because the claim succeeds. The investment must reach the rightful beneficiary through the correct legal, banking and tax route.

Part 1 covered how to trace forgotten investments and initiate recovery through IEPF. This part focuses on what happens next.

1. Inheritance: establish who is entitled to claim

For many NRI and OCI families, succession is the real obstacle. The original shareholder and spouse may both have died, heirs may live in different countries, a will may be missing, or names may differ across old share records and current identity documents.

A nominee is not automatically the beneficial owner of the entire investment. Nomination may facilitate transmission, but ultimate entitlement depends on the applicable succession law, the will, if any, and the facts of the case.

Depending on the circumstances, the company, registrar and transfer agent (RTA), or IEPF Authority may require death certificates, proof of relationship, a will, probate or other court documentation, a succession certificate, legal-heir evidence, indemnities or declarations.

No single document resolves every succession case. Where successive holders have died, establish the complete chain of succession and identify the persons entitled to claim. Obtain the receiving authority’s specific requirements before arranging overseas notarisation or initiating court proceedings.

SEBI’s 2025 circular introduced the reporting code “TLH” for transmission from nominee to legal heir, effective from 1 January 2026. This reporting change does not remove the underlying requirements for establishing entitlement and completing transmission.

2. Recovery: shares and dividends follow different routes

Once entitlement is established, the next steps depend on what is being recovered.

If the claim concerns shares:

1. Complete the IEPF claim requirements and follow through on the release of the securities.

2. Confirm the appropriate demat account with the depository participant and authorised dealer bank.

3. Complete the required demat credit or transmission.

4. If a sale is intended, verify the permitted sale route and applicable conditions before selling.

5. Establish the tax treatment and permitted route for remitting the sale proceeds.

An NRI-designated NRO non-PIS demat account may be relevant, but the correct arrangement depends on the investor’s status and the nature of the holding.

If the claim concerns unpaid dividends:

1. Establish the entitlement and complete the claim process.

2. Confirm the amount approved and the bank account into which payment will be made.

3. Check the relevant dividend period and applicable tax treatment.

4. Establish the permitted account and overseas remittance route, including any required documentation.

The distinction matters: shares must be released and credited before any subsequent sale, whereas dividends are monetary receipts. IEPF approval does not, by itself, complete demat transmission, a share sale or overseas remittance.

3. FEMA and tax: establish the permitted remittance route

The permitted route depends on the holder’s status, the nature and source of funds, the account in which they are held and the applicable rules.

The USD 1 million annual remittance-of-assets facility applies to specified eligible cases, including certain remittances involving NRI/PIO status, inherited assets, legacy and NRO balances. It is not an automatic entitlement for every OCI holder or every type of receipt. Confirm eligibility, applicable limits and supporting documents with the authorised dealer bank before remittance.

Tax compliance must be assessed separately. For remittances made on or after 1 April 2026, Form 145 replaces Form 15CA and Form 146 replaces Form 15CB, subject to the applicable rules and exemptions.

Under Rule 220 of the Income-tax Rules, 2026, the reporting route depends on factors including taxability, amount and whether the prescribed Assessing Officer’s certificate or accountant’s certificate is required.

Do not assume that every remittance requires both forms—or that inherited funds are automatically exempt from reporting or tax. The tax treatment of the underlying income must be examined separately; the date on which an old investment is recovered does not, by itself, determine its tax treatment.

4. The inheritance-to-repatriation roadmap

Treat the process as five distinct gates. Keep evidence at every stage and do not assume that completing one automatically completes the next.

Gate	Action	Evidence to retain
1. Establish inheritance	Identify the rightful claimant and resolve succession, nominee and documentation issues.	Death certificates, succession documents, proof of relationship and required declarations
2. Recover the asset	Complete the IEPF or company claim and follow through on release of shares or payment of dividends.	Claim outcome, correspondence and release/payment confirmation
3. Receive correctly	For shares, complete demat credit or transmission. For dividends, confirm receipt in the appropriate bank account.	Demat statement or bank credit evidence
4. Clear tax and FEMA requirements	Establish the source of funds, tax treatment, permitted account and sale/remittance route. Confirm applicable limits, certificates and exemptions.	Transaction records, tax working and required remittance documents
5. Repatriate and close	Complete the permitted remittance through the authorised dealer bank and preserve the transaction trail.	Bank confirmation, remittance advice and supporting records

Before instructing the bank to remit, ask it to confirm the applicable route, limits and outstanding documents in writing. Resolve succession gaps before incurring costs on repeated filings or overseas document authentication.

CA S.Ahuja perspective

Old investments often remain inaccessible not because the assets have disappeared, but because succession, account arrangements and remittance requirements were never brought together.

For NRI and OCI families, the route is clear: establish entitlement, recover the asset, receive it correctly, complete the applicable tax and FEMA checks, and remit only through a permitted route.

The objective is not merely to recover forgotten shares or dividends. It is to ensure that the investment reaches the rightful beneficiary lawfully, with ownership established and every step documented.

Unclaimed Shares and Dividends: How to Find, Trace and Recover Forgotten Investments Through IEPF

The certificates may be missing, the investor may have died, and the folio number may be unknown. Here is how families can trace old investments and pursue recovery.

By CA Surekha S Ahuja
27 October 2026

Your father bought shares decades ago. Your mother remembers receiving dividends, but the payments stopped. The certificates are missing, the company may have changed its name, and nobody knows the folio number.

Could the investment still be recovered?

Possibly. But the first task is not filing a claim. It is establishing what the investor owned, locating the records, identifying where the shares or dividends are held and proving who is entitled to claim them.

The recovery process begins with a search—not a form.

1. First establish where the investment is held

What you discover	What to do next
Shares and unpaid dividends remain with the company	Approach the company or its Registrar and Transfer Agent (RTA) for the applicable payment or transmission procedure.
Dividend has moved to IEPF, but shares have not	Establish the dividend entitlement and follow the applicable IEPF claim process for that amount.
Shares have been transferred to IEPF	Establish the claimant's entitlement and follow the IEPF recovery procedure.
The registered shareholder has died	Establish who can claim under the applicable nomination, joint-holder, transmission and succession requirements.
The company, certificate and folio are unknown	Reconstruct the investment history before filing.
An earlier claim was rejected or remains pending	Identify the specific deficiency and the action required to resolve it.

Do not assume every old investment has moved to IEPF. Equally, a failed online search does not prove that no investment exists.

2. When do unpaid dividends and shares move to IEPF?

Sections 124 and 125 of the Companies Act, 2013, govern the relevant unpaid-dividend and Investor Education and Protection Fund framework.

• Unpaid dividend: If a declared dividend remains unpaid or unclaimed for 30 days, the company must transfer it to the Unpaid Dividend Account within the next seven days.

• Dividend transferred to IEPF: Amounts remaining unclaimed in the Unpaid Dividend Account for seven years are transferred to IEPF, together with applicable accrued interest.

• Shares transferred to IEPF: Shares on which dividend has remained unpaid or unclaimed for seven consecutive years or more are subject to transfer under the applicable statutory provisions, including relevant exceptions.

The seven-year rule does not mean every old shareholding automatically moves to IEPF. The dividend history and company records must be checked.

3. How to trace physical shares when the certificate and folio are missing

The most difficult case is often one in which the original shareholder has died and the family has no certificate, folio number, PAN or company name.

There is no single public database that guarantees discovery of every historical physical shareholding. Use the following sequence.

Step 1: Search family records

Check old files, bank lockers, personal papers and records held by other family members. Look for:

• Physical share certificates, including damaged certificates and photocopies.

• Dividend warrants, dividend advice slips and old bank statements showing dividend credits.

• Income-tax returns, wealth-tax records, personal balance sheets and net-worth statements.

• Company letters, annual reports, AGM notices and investment correspondence.

• Old broker statements, demat statements and records of the deceased's spouse or joint holders.

One old dividend warrant may reveal the company name, folio number and shareholder particulars needed to begin the search.

Step 2: Record every available clue

From any surviving document, extract the shareholder's name, company name, folio number, certificate number, distinctive numbers, number of shares, face value and old registered address.

Do not discard a certificate because the company name looks unfamiliar. The issuer may have changed its name, merged or transferred its records to a successor entity.

Step 3: Search IEPFA's online facility

Start with the official IEPFA Portal Login and Search Facility.

The search facility provides three routes:

1. Search by PAN

2. Search by basic information, such as name and date of birth

3. Search by company name with Demat ID or folio number

For a deceased shareholder, try the available basic particulars and name variations where the search form allows them. If PAN or folio details are missing, do not stop at the first unsuccessful search.

A failed search is not conclusive. The investment may still be held by the company, may be recorded under different particulars, or may require a search of historical records.

Step 4: Ask the company or RTA to trace historical records

Once a possible issuer is identified, write to its investor-relations team or RTA. Supply every available clue, including the shareholder's name, former address, approximate investment period and any certificate or dividend reference.

Request written confirmation of:

• Whether a historical folio or shareholding exists.

• The number of shares and available certificate particulars.

• The unpaid-dividend history.

• Whether shares or dividends have been transferred to IEPF.

• Whether the company changed its name, merged or transferred records to a successor entity.

• The applicable procedure for establishing entitlement and pursuing recovery.

If the RTA insists on a folio number, explain that the family is trying to trace that very number. Ask whether a historical search can be conducted using the shareholder's name and former address.

Step 5: Trace a former company or successor entity

Use the name appearing on an old certificate, dividend warrant or letter to trace the issuer's corporate history. Check available company master data through the Ministry of Corporate Affairs and identify the successor company or current RTA, where applicable.

If the company is under liquidation or has been dissolved, investigate the relevant corporate or liquidation records to establish who holds the historical records and which recovery route remains available.

Step 6: If the family has no documents at all

Reconstruct the investor's history using bank records, tax records, former employers, business papers, broker correspondence and family information.

Ask relatives whether the investor regularly received dividends or maintained an investment relationship with a broker. Search IEPFA using the available particulars. If a possible issuer emerges, approach its RTA for a historical-record search.

Practical tip: Maintain a tracing register recording each name searched, company contacted, response received, folio identified and next action. This is particularly useful where several family members may have held shares in different companies.

4. The shareholder has died: a legal-heir certificate may provide a simpler route

Finding an investment and proving the right to recover it are separate steps. Families should not assume that a succession certificate or probate is invariably the only route.

The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2024, notified as G.S.R. 552(E) dated 9 September 2024, amended Schedule II to recognise a legal-heir certificate issued by a revenue authority not below the rank of Tahsildar having jurisdiction, as an alternative to the specified court or tribunal documentation in the applicable transmission process.

Where this route is used, the prescribed supporting documents include:

• A notarised indemnity bond from the claimant to whom the securities are to be transmitted.

• A no-objection certificate from the other legal heirs, confirming relinquishment of their rights to the transmission claim, with the attestation required under the applicable rules.

This can offer a practical alternative to obtaining a succession certificate or other court-issued documentation. The claimant should verify the applicable Schedule II requirements and the company's current document checklist before proceeding.

The correct route still depends on the registered holding, nomination, claimant's status and facts of the succession.

• Joint holding: Establish the registered holders and the procedure applicable after the death of one holder.

• Registered nominee: Obtain the death certificate and follow the applicable transmission and claim requirements.

• No nomination: Establish the appropriate legal-heir route and supporting evidence.

• Multiple heirs: Obtain prescribed no-objection documents or other evidence, where applicable.

• Disputed succession: Obtain appropriate legal advice before filing.

Being a child or spouse does not, by itself, establish entitlement to claim securities registered solely in another person's name.

Keep the two processes separate: transmission establishes who is entitled to the securities; the IEPF refund process deals with the shares or amounts transferred to the Fund. Complete the applicable transmission and verification requirements rather than treating the claim form as a substitute for succession documentation.

5. Lost certificates, mismatched names and other obstacles

Problem	Practical action
Original physical certificate is lost	Ask the company or RTA for the applicable lost-security procedure and prescribed supporting documents.
Name or signature does not match	Reconcile the original records with current identity documents and follow the prescribed correction or verification procedure.
Address has changed	Provide the required evidence and complete the applicable record-update procedure.
Old bank account is closed	Establish the bank particulars required for the claim and verify them before submission.
Dividends were never received	Obtain the company's dividend history and identify which amounts remain with the company and which have moved to IEPF.
Company cannot locate the folio	Supply historical clues and request a search of older records.
Company changed its name or merged	Trace the corporate history and identify the successor company or current RTA, where applicable.
Claim was rejected or returned	Identify the specific defect and follow the prescribed correction or resubmission process.
Claim remains pending	Track the SRN, contact the designated IEPF Nodal Officer and request written confirmation of the outstanding action.

What changed for lost physical securities?

The 2024 amendment also revised the documentary requirements for lost or misplaced securities, including omission of the earlier surety-affidavit item from Schedule III.

This does not mean that a lost certificate can simply be ignored. The claimant must still follow the applicable lost-security procedure and provide the evidence required for the particular case, including prescribed declarations, indemnities or other supporting documents.

6. Before filing Form IEPF-5, reconcile the entitlement

A frequent cause of delay is filing without reconciling the claim with the company's records.

Ask the company or RTA for an entitlement letter or written confirmation of the shares and amounts transferred to IEPF, where applicable. Reconcile:

• Company name and relevant corporate particulars.

• Shareholder name and folio or demat details.

• Number of shares transferred.

• Dividend amounts and relevant years.

• Whether the claim covers shares, amounts or both.

• The claimant's identity and basis of entitlement.

The substituted Form IEPF-5 took effect on 6 October 2025 under the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2025, notified as G.S.R. 733(E) dated 1 October 2025.

The revised form includes a field relating to an entitlement letter issued by the company or bank and covers claims involving transmission. Check the live form and its instructions to establish what is required for the particular case.

7. Form IEPF-5: filing and document submission

Once the investment and claimant have been identified, follow the current official procedure.

Step 1 — Prepare the supporting documents. Depending on the case, these may include identity and PAN particulars, an entitlement letter where applicable, bank proof, a demat Client Master List, evidence of shareholding, prescribed indemnity and declaration documents, and death or succession documents where relevant.

Step 2 — File the current Form IEPF-5. Access the applicable filing facility through the Ministry of Corporate Affairs portal and follow the latest form instructions.

• IEPF Authority

• Ministry of Corporate Affairs

Step 3 — Upload documents and retain the acknowledgement. Legal heirs, successors, administrators and nominees must follow the applicable requirements for uploading self-attested scanned copies of the prescribed Schedule II documents with Form IEPF-5. Send physical documents in original or other prescribed form only where the current rules, company instructions or claim-specific procedure require them.

Retain the Service Request Number (SRN), acknowledgement and proof of any required dispatch.

Step 4 — Complete verification. The company verifies the claim and submits the prescribed verification report to the Authority. Respond promptly to any deficiency or resubmission request.

Step 5 — Track recovery to completion. Maintain a dated record of the SRN, documents submitted, communications and status. After approval, verify that the eligible amount has been credited or that the shares have been transferred, as applicable.

Filing Form IEPF-5 does not guarantee approval. Incomplete evidence, inconsistent particulars or unresolved entitlement issues can delay or prevent recovery.

8. If the company is not responding

Use a documented escalation process:

1. Write to the RTA with the folio or available historical particulars.

2. If unresolved, contact the company's IEPF Nodal Officer using the details published by the company.

3. Refer to the SRN, dates, documents submitted and precise outstanding issue in each follow-up.

4. If the matter remains unresolved, use the applicable official grievance or escalation mechanism.

Ask what remains outstanding, who must act and which document or correction is required. Avoid sending original documents unless the applicable instructions require them, and retain proof of dispatch.

9. Search across unclaimed financial assets—not just shares

Families may have forgotten bank deposits, insurance proceeds, mutual fund investments or other financial assets alongside old shares.

The Finance Ministry's Common Landing Portal for Unclaimed Financial Assets provides a single starting point for accessing search facilities across multiple categories:

Search Unclaimed Financial Assets

For bank deposits specifically, the Reserve Bank of India's UDGAM portal provides a search facility for unclaimed deposits maintained by participating banks:

RBI UDGAM Portal

These portals help locate possible assets; they do not replace the relevant institution's claim, identity-verification or succession procedure.

10. Create a recovery file for each shareholder

Maintain one file containing:

• Shareholder's name and available identity details.

• Company name, former name and RTA contact details.

• Folio number, certificate particulars or DP ID and Client ID.

• Old certificates, dividend warrants, statements and correspondence.

• Company confirmation and entitlement particulars.

• Claimant's identity, legal-entitlement and succession documents, where relevant.

• Form IEPF-5 acknowledgement and SRN.

• Supporting documents and proof of any required dispatch.

• Verification, deficiency and resubmission communications.

• Final proof of payment or share transfer.

This record is particularly important where the original shareholder has died or the family is tracing multiple investments.

A final practical caution: the IEPFA portal is expected to change

The Ministry of Corporate Affairs reported in August 2026 that the planned Integrated IEPFA Portal 2.0 rollout was scheduled for November 2026. Proposed features include a pre-filled Form IEPF-5 and an entitlement-search facility. These are planned features, not a guarantee that every feature will be live on a particular date. <Cite refs={["turn127118search0"]}/>

Before filing, check the official IEPFA and MCA websites for the live search facility, current form and latest instructions. Do not rely solely on screenshots or filing steps from an older version of the portal.

CA S.Ahuja perspective

Forgotten investments are often not lost through one major event. They become difficult to recover through a series of small gaps: a forgotten folio, a changed company name, a missing certificate, an outdated bank account or an unresolved succession issue.

The correct sequence is:

Trace the investment → confirm where it is held → reconcile the entitlement → establish who can claim → complete the applicable filing and verification → track recovery to completion.

For families, this is also an opportunity to review old physical certificates, demat statements, dividend records and succession documents before another generation loses track of the investment.

The objective is not merely to file Form IEPF-5. It is to establish the entitlement correctly and recover what is legally due.

Cloud Accounting Is Only the Beginning: The Financial Discipline Startups Need to Grow Safely

 From automated bookkeeping to reliable numbers, cash-flow visibility and profitable growth

By CA Surekha S Ahuja

A startup can have cloud accounting, a competent accountant and rising revenue—and still make an expensive business mistake.

It may expand before cash flows can support it, mistake sales growth for profitable growth, commit funds before achieving critical milestones or make decisions using reports built on incomplete or incorrectly classified data.

Cloud accounting makes financial information accessible. It does not automatically make that information reliable, explain its business implications or tell a founder what to do next.

For young startups, the real opportunity lies in combining technology with sound financial controls, decision-oriented MIS and regular access to experienced financial guidance.

When growth consumes more cash than it generates

Consider a startup reporting a quarterly accounting profit of ₹5 lakh. During the same period, its growing receivables and inventory absorb an additional ₹15 lakh in working capital, after accounting for the increase in supplier credit.

The business is profitable, but growth has absorbed substantially more cash than its reported profit. Other cash flows will affect the final cash position, yet the working-capital movement alone warrants attention.

A founder looking only at revenue and profit might accelerate expansion. An experienced finance professional would examine collection periods, inventory movement, customer margins, supplier terms and projected cash requirements before assessing whether the business can safely take the next step.

Profitability tells the founder whether the business is earning. Cash-flow analysis helps establish whether it can finance what comes next.

That distinction can determine whether growth strengthens a startup or puts pressure on its ability to meet existing commitments.

Five financial blunders that startups can prevent

1. Expanding before cash is available

More sales can require additional inventory, staff, marketing and customer credit before the resulting cash is collected. Without forecasting this requirement, growth can create a funding gap even when the business is profitable.

2. Mistaking revenue for commercial success

A large order or fast-growing customer is not necessarily a profitable opportunity. Discounts, delivery costs, servicing requirements, credit periods and collection risk can materially alter the economics of a sale.

3. Spending ahead of milestones

A startup may recruit, increase fixed costs or enter a new market assuming that a funding round, customer contract or revenue target will materialise. If the milestone is delayed, the commitments remain.

Major spending should therefore be linked to measurable milestones, available funding and realistic downside scenarios—not optimism alone.

4. Trusting reports without validating the numbers

Automated entries and bank feeds reduce manual work, but they do not guarantee correct classification, complete records or accurate inventory and receivable balances. Errors can flow into dashboards and forecasts, making unreliable information appear authoritative.

Reconciliations, supporting documentation, review of unusual transactions and clear responsibility for data quality remain essential.

5. Treating cloud access as a substitute for data security

Who can view financial records, approve payments, alter vendor details or export sensitive information? What happens when an employee leaves, credentials are compromised or access to the platform is disrupted?

Startups should assess the provider's security and backup arrangements, use multi-factor authentication where available, apply role-based access, review permissions periodically and maintain appropriate recovery procedures. Cloud hosting alone does not guarantee security or continuity.

Three capabilities must work together

Cloud accounting provides efficiency. It can simplify transaction recording, invoicing, bank feeds and access to reports, reducing repetitive processing.

Accounting controls establish reliability. Reconciliations, supporting evidence, review of material transactions and investigation of discrepancies help establish whether the numbers can be trusted.

MIS and professional financial analysis guide decisions. They connect profitability, cash flow, working capital, budgets, risks and business milestones to the choices management must make.

A report can be timely yet unsuitable for a decision if the underlying data is unreliable or its commercial implications have not been analysed.

The objective is not simply to produce more reports. It is to understand what the figures mean for the business before committing its money.

Young startups need financial experience—not necessarily a full-time CFO

An early-stage startup may not justify a full-time Chief Financial Officer. But relying solely on bookkeeping and periodic financial statements can leave founders making consequential decisions without adequate financial analysis.

A practical alternative is to combine cloud accounting with regular access to an experienced CFO, finance adviser or Chartered Accountant whose expertise matches the startup's needs.

A structured weekly or fortnightly financial review should focus on decisions and emerging risks, not merely whether the accounts are updated.

Review area	The question management should answer
Cash and collections	What is available, what must be paid, and when are receipts realistically expected?
Profitability	Which products and customers generate adequate returns after associated costs?
Milestones	Are revenue, collections, margins and funding progressing as planned?
Financial exposure	What happens if a major receipt is delayed, sales fall short or costs rise?
Data reliability	Have material balances been reconciled and significant exceptions investigated?
Action	What must change, who is responsible and when will the outcome be reviewed?

A concise monthly MIS should bring together profitability, working capital, budget versus actual performance, milestone progress and the financial outlook. Where growth is rapid or cash is tight, a rolling 13-week cash-flow forecast can help identify pressure before it becomes urgent.

The frequency of review should reflect the startup's stage, cash position, complexity and risk. The value lies in challenging assumptions, identifying deviations early and changing course while options remain available.

A virtual or fractional CFO can provide access to senior financial expertise without the immediate cost of a full-time executive. The arrangement works best when the startup maintains reliable records and the adviser understands its business model, financial position and growth plans.

The CA Sahuja Perspective

Cloud accounting should free up time for financial thinking—not create the illusion that software alone can manage a business.

For a young startup, the winning combination is technology to process, controls to validate, security to protect, MIS to interpret and experienced financial judgment to guide action.

Founders should not wait until cash runs short, a milestone is missed or funding becomes urgent before seeking experienced financial guidance. Regular financial discussions can help them assess whether their ambitions are supported by the business's actual performance, financial capacity and risk exposure.

The dream belongs to the founder. Turning it into a sustainable business requires ambition, execution and disciplined financial decisions.

The real test is not how quickly a startup produces its financial reports. It is whether its information is reliable, its spending is aligned with milestones and its growth converts into sustainable profit and cash flow.

MCA Extends Annual Filing Timelines for FY 2025–26: AOC-4 by 31 December, MGT-7 by 31 January

 Relief from additional filing fees—but no extension of the statutory AGM deadline.

By CA Surekha S Ahuja

The Ministry of Corporate Affairs (MCA), through General Circular No. 05/2026 dated 24 October 2026, has granted companies additional time to file specified annual financial statements and returns for FY 2025–26 without payment of additional fees.

The relief provides a valuable window to complete annual compliance, but its scope is specific: the AGM deadline remains unchanged, and the circular does not grant a blanket waiver of statutory defaults.

Revised filing deadlines

Forms	Purpose	Extended deadline
AOC-4, AOC-4 (CFS), AOC-4 (XBRL), AOC-4 NBFC (Ind AS), AOC-4 CFS NBFC (Ind AS)	Financial statements and applicable variants	31 December 2026
MGT-7 and MGT-7A	Annual returns	31 January 2027

The applicable form depends on the company's status and reporting requirements.

What the relief means—and what it does not

1. No additional fees within the extended window

The specified forms for FY 2025–26 may be filed by the respective extended dates without additional fees.

2. The AGM deadline is unchanged

Paragraph 3 expressly clarifies that the circular does not extend the statutory time for holding an AGM. Companies that have missed the applicable AGM timeline remain liable under the relevant provisions of the Companies Act, 2013.

3. Late filing beyond the relaxation can attract additional fees

Under paragraph 4, filings made after the relaxation period will attract applicable fees, including additional fees, calculated from the original statutory due dates.

4. The relief is form-specific

It should not be treated as a blanket extension for every MCA filing, a general amnesty for defaults or a waiver of other statutory obligations.

What companies should do now

Use the additional time to:

• Finalise accounts, reconciliations and statutory audits.

• Complete the necessary board and shareholder approvals.

• Verify the applicable AOC-4 variant and MGT-7/MGT-7A requirement.

• Check AGM compliance separately.

• File well before the extended deadlines to avoid last-minute errors and portal-related delays.

CA Sahuja Perspective

The MCA's announcement offers practical relief from additional filing fees, but filing relief is not the same as statutory compliance relief.

Companies should use the extended window to complete accurate annual filings while independently addressing any AGM default or other outstanding obligation.

Official reference: MCA General Circular No. 05/2026 dated 24 October 2026, Relaxation of additional fees and extension of time for filing of Financial Statements and Annual Returns under the Companies Act, 2013.

Ministry of Corporate Affairs — Official Website

This update is based on the cited circular. Companies should assess their individual compliance position under the applicable law.

Commercial Debit Note under GST: 14 Cases, Format & Entries

 Commercial Debit Note under GST: 14 Situations, Correct GST Treatment, Format and Accounting Entries

By CA Surekha S Ahuja

A supplier delivers goods worth ₹10 lakh. The buyer discovers a shortage, defective items or an overcharge of ₹80,000.

The buyer raises a debit note.

The accounts team records the recovery. The supplier adjusts the balance. Both move on.

But one question can change the tax treatment: Is this merely a commercial adjustment—or does it require a GST document and a corresponding tax adjustment?

A commercial debit note does not, by itself, reduce the supplier’s GST liability or create an additional GST credit for the buyer. Confusing it with a statutory GST debit note or credit note can lead to incorrect returns, disputed input tax credit (ITC), and avoidable reconciliation problems.

This guide explains the distinction and how to handle 14 common business situations.

1. Commercial debit note vs GST debit note: the essential distinction

Particulars	Commercial debit note	GST debit note
Who generally issues it?	Buyer to supplier, to claim an amount or record an adjustment	Supplier to recipient
Purpose	Commercial recovery, shortage, overcharge or contractual adjustment	To correct an invoice where taxable value or tax charged was lower than payable
GST effect by itself	No automatic change in GST liability or ITC	May affect the supplier’s tax liability and recipient’s ITC, subject to the law
GST return reporting	Not reported as a statutory GST debit note merely because it is called a debit note	Reported under the applicable GST reporting requirements
Main legal reference	Underlying contract, transaction and accounting records	Section 34(3) of the CGST Act and applicable rules

Remember: The document’s title does not determine its GST treatment. Its purpose, the underlying transaction and the statutory conditions do.

Section 34(3) of the CGST Act deals with a supplier-issued debit note where the taxable value or tax charged in the original invoice is less than the value or tax payable. A buyer’s commercial debit note is not a substitute for that document.

Read Section 34 of the CGST Act.

2. The 14 situations: what should the business do?

No.	Situation	Correct approach
1	Goods returned to supplier	Document the return. Determine whether the supplier will issue a GST credit note or the buyer must account for the return as a separate supply under the applicable facts and law. Do not reverse or adjust GST twice.
2	Short supply	Record the shortage and claim the contractual amount. Reconcile the original invoice, goods received and payment. ITC depends on the actual receipt and applicable statutory conditions.
3	Damaged or defective goods	Preserve inspection reports, photographs, rejection notes and correspondence. Establish whether goods are returned, retained at a reduced price or compensated separately.
4	Supplier overcharged the buyer	Seek correction of the invoice and applicable GST treatment. A buyer-issued commercial debit note alone does not correct the supplier’s GST invoice or tax liability.
5	Post-sale discount	A commercial or financial credit note may adjust the amount payable without reducing the supplier’s GST liability. Apply the relevant conditions and guidance in CBIC Circular No. 251/08/2025-GST.
6	Liquidated damages for supplier delay	Examine the contract and the real nature of the payment. Compensation for breach is not automatically consideration for a taxable service. Apply Circular No. 178/10/2022-GST.
7	Buyer paid an expense on supplier’s behalf	Recover the amount with supporting evidence. Rule 33 treatment as a pure-agent exclusion is available only when all prescribed conditions are met.
8	Advance, deposit or settlement adjustment	Reconcile the original payment and contractual obligation. A debit note cannot, by its label alone, determine the GST consequences of the adjustment.
9	Post-supply price reduction	Identify whether the reduction is merely commercial or qualifies for a GST value reduction under the applicable statutory conditions. Do not assume that every price reduction permits tax adjustment.
10	Supplier reimburses buyer’s expenses	Establish whether this is a genuine recovery, part of the consideration for the original supply or payment for a separate supply. The label “reimbursement” is not decisive.
11	Cheque dishonour charges	Review the underlying arrangement and the nature of the charge. Apply the principles in Circular No. 178/10/2022-GST rather than treating every recovery as automatically taxable or exempt.
12	Buyer breaches contract; damages or earnest money are forfeited	Examine the contractual facts and substance of the payment. A penalty or forfeiture is not automatically taxable merely because money is retained.
13	Exempt or non-GST transaction	Record the commercial adjustment correctly, but do not levy GST merely because a debit note is raised. Check whether any separate taxable supply exists.
14	Statutory dues or third-party costs recovered	Identify who incurred the liability, whose obligation it was, and whether the recovery forms part of the value of another supply or represents a separate supply.

These are common fact patterns, not automatic tax classifications. The supporting contract, invoice, evidence and actual conduct determine the correct treatment.

3. Three cases where a wrong entry can become a GST problem

Case A: The supplier issues a commercial credit note for a discount

A supplier invoices goods at ₹5,00,000 plus GST and later gives the buyer a commercial credit note for ₹50,000.

If the supplier does not reduce the taxable value and output tax through a statutory GST credit note, the commercial credit note does not, by itself, reduce the supplier’s GST liability. Under the clarification in Circular No. 251/08/2025-GST, the recipient is not required to reverse otherwise eligible ITC merely because such a financial or commercial credit note has been issued.

The original invoice, tax payment, credit note and ledger reconciliation should still be retained.

The mistake to avoid: Reducing output tax or reversing ITC solely because a commercial credit note appears in the books.

Read Circular No. 251/08/2025-GST.

Case B: The buyer claims liquidated damages for delay

A supplier misses a delivery deadline. The contract provides for damages of ₹1 lakh, and the buyer raises a commercial debit note.

The debit note records the claim; it does not settle the GST question.

Circular No. 178/10/2022-GST clarifies the GST treatment of liquidated damages, compensation and penalties. A payment arising from a breach is not automatically consideration for a service of tolerating the breach. The actual contractual arrangement and nature of the payment must be examined.

The mistake to avoid: Applying GST—or assuming that GST cannot apply—merely from the words “penalty”, “damages” or “deduction”.

Read Circular No. 178/10/2022-GST.

Case C: The buyer returns goods

A buyer returns defective goods and raises a commercial debit note for the value claimed.

The parties must establish how the return is being accounted for. Depending on the facts and applicable law, the supplier may issue a GST credit note, or the return may need to be treated as a separate supply by the buyer. The relevant invoices, movement records, tax treatment and ledger entries must agree.

The mistake to avoid: Treating the buyer’s commercial debit note as sufficient evidence that the supplier’s output tax and the buyer’s ITC have automatically been adjusted.

4. A practical decision tree before issuing a debit note

Step 1 — What is the buyer claiming?

• Shortage, damage, overcharge or contractual recovery: Prepare a commercial debit note supported by evidence.

• Correction of the supplier’s taxable value or tax charged: Ask whether the supplier must issue the relevant statutory GST document.

• A separate supply by the buyer: Assess the buyer’s own GST invoicing and tax obligations.

Step 2 — Does the adjustment change the original supply’s taxable value or tax?

• No: Record the commercial adjustment without assuming a GST reduction.

• Yes: Check the statutory route, eligibility conditions, time limits and applicable reporting requirements.

Step 3 — Is the amount damages, a reimbursement or a price reduction?

Examine the contract, actual events, supporting records and applicable GST guidance. The accounting description alone is not conclusive.

Step 4 — Do the records agree?

Reconcile the debit note, original invoice, goods receipt or return, supplier confirmation, payment and GST return treatment wherever relevant.

If any answer remains unclear, hold the GST adjustment until the transaction is properly classified.

5. Commercial debit note format

A commercial debit note should clearly identify the claim and its supporting transaction. The following is a practical format; it is not a prescribed GST debit-note format.

COMMERCIAL DEBIT NOTE

• Debit Note No.: [●]

• Date: [●]

• Buyer’s name, address and GSTIN: [●]

• Supplier’s name, address and GSTIN: [●]

• Original invoice number and date: [●]

• Purchase order or contract reference: [●]

• Reason for debit: [Short supply / damage / overcharge / contractual recovery / other]

• Description of goods or services: [●]

• Quantity or amount affected: [●]

• Amount claimed: ₹[●]

• GST treatment and basis, where relevant: [●]

• Supporting documents: [Inspection report / delivery record / correspondence / contract clause]

• Net adjustment claimed: ₹[●]

Declaration: This document records a commercial claim or adjustment. It is not, merely by being issued, a statutory GST debit note under Section 34(3) of the CGST Act.

The wording should be adapted to the actual transaction. Do not describe a disputed or unverified amount as an admitted liability.

6. Illustrative accounting entries

Entries depend on the transaction, the accounting policy and whether the amount is accepted or disputed. These examples are not universal journal-entry instructions.

Example 1: Buyer records an accepted commercial recovery of ₹10,000

Illustrative buyer entry:

• Supplier / payable account — Debit ₹10,000

• Relevant expense, purchase adjustment or recovery account — Credit ₹10,000

The credit account must reflect the substance of the transaction. A purchase-price adjustment, damages claim and reimbursement may require different treatment.

Example 2: Supplier accepts the commercial claim

Illustrative supplier entry, where the amount is properly recognised as a reduction in the amount receivable:

• Relevant sales adjustment, expense or claim account — Debit ₹10,000

• Buyer / receivable account — Credit ₹10,000

Do not automatically adjust output GST in either entry. Any tax adjustment must follow the applicable statutory route and conditions.

Example 3: Claim remains disputed

Do not treat the amount as an accepted settlement merely because the buyer has issued a debit note. Assess recognition, disclosure and recoverability under the applicable accounting framework and the facts.

7. The pre-issue checklist for accounts teams

Before posting or accepting a commercial debit note, confirm:

• The original invoice, purchase order and relevant contract are identified.

• The reason and amount of the claim are supported by records.

• The supplier has been notified, and acceptance or dispute status is recorded.

• The document is correctly distinguished from a statutory GST debit note or credit note.

• ITC and output tax have not been changed merely because a commercial document was issued.

• Any return of goods, price reduction, damages or reimbursement has been separately analysed.

• The ledger, payment adjustment and GST return treatment are consistent.

• The document and supporting evidence are retained for audit and reconciliation.

8. Common questions

Does a commercial debit note attract GST?

Not merely because it is issued. The GST outcome depends on the underlying transaction. A separate taxable supply or an amount forming part of the value of a supply may have GST consequences.

Can a buyer issue a GST debit note to increase the supplier’s tax?

A buyer’s commercial debit note is not the supplier-issued statutory debit note contemplated by Section 34(3). Where the original supplier invoice understates taxable value or tax, the supplier must examine the appropriate statutory correction.

Does a commercial debit note reduce the supplier’s output GST?

No, not by itself. A commercial claim or adjustment does not automatically reduce output tax.

Must the recipient reverse ITC when a commercial credit note is issued?

Not solely because a commercial or financial credit note has been issued. Circular No. 251/08/2025-GST clarifies the treatment of such discounts where the supplier does not reduce the original GST liability. The recipient must still satisfy the normal ITC conditions.

Are liquidated damages always outside GST?

No blanket conclusion should be drawn. Circular No. 178/10/2022-GST explains that damages or penalties arising from breach are not automatically consideration for a taxable service. The facts and contractual substance remain important.

Can a commercial debit note be used for every adjustment between buyer and supplier?

No. It may document a commercial claim, but it cannot replace a required tax invoice, statutory debit note or credit note, or the correct treatment of a separate supply.

CA S. Ahuja perspective

A debit note is easy to issue. Correctly classifying the transaction behind it is the real work.

For every commercial debit note, the accounts team should answer three questions before posting:

1. What exactly is being recovered or adjusted?

2. Does the adjustment change the GST treatment of the original supply, or is it a separate transaction?

3. Which document, evidence and return treatment support that conclusion?

A well-supported commercial debit note protects the business’s contractual position. A wrongly classified one can create a mismatch between the books, GST returns and the counterparty’s records.

The control that matters is simple: never let an accounting document decide the GST treatment. Let the transaction and the law decide it.

Buying Property From an NRI: The New TDS Route Is Simpler. The Risk Is Still the Buyer’s.

 A buyer’s story, a decision tree and the compliance steps every buyer should follow before paying a non-resident seller

By CA Surekha S Ahuja

The property was finalised. The price was negotiated. The bank was ready to release the money.

Then came one question from the buyer’s accountant:

“Are we deducting TDS at 1%—or is the seller a non-resident?”

The buyer had assumed that buying a property from an NRI was no different from buying one from a resident Indian. The agreement was ready, and the payment schedule had been discussed. Nobody had yet examined the seller’s tax-residency status, the applicable deduction rate or the procedure for depositing and reporting the tax.

That oversight can turn an otherwise straightforward property purchase into a tax-compliance problem for the buyer.

From 1 October 2026, the process has become more convenient for eligible buyers. A resident individual or HUF purchasing immovable property from a non-resident can use Form 141, Schedule E, through the income-tax e-filing portal without obtaining a TAN solely for this transaction.

But the distinction is crucial: simpler filing does not mean lower TDS, automatic tax-rate certainty or freedom from the buyer’s responsibility.

Here is how to get the transaction right.

1. One-page decision tree: Which TDS route should the buyer follow?

Use this decision tree before making an advance, paying an instalment or crediting the sale consideration.

START
  |
  v
Is the seller a resident of India for income-tax purposes?
  |
  +-- YES --> Examine the resident-seller TDS provisions.
  |           Where applicable, use Form 141, Schedule B.
  |           Do not use Schedule E.
  |
  +-- NO --> Treat the transaction under the applicable
              non-resident property-transfer provisions.
              |
              v
       Is the buyer a resident individual or HUF?
              |
              +-- YES --> Consider Form 141, Schedule E
              |           from 1 October 2026.
              |           No TAN is required solely for
              |           this eligible transaction.
              |
              +-- NO --> Schedule E is not available.
                          Follow the applicable TAN-based
                          TDS and reporting procedure.
              |
              v
       Has the correct TDS rate and amount been determined?
              |
              +-- NO --> Review the seller's status, nature
              |           of capital gain, PAN, applicable
              |           rate and any valid lower/nil
              |           deduction determination.
              |
              +-- YES --> Record the basis and calculation.
              |
              v
       Is payment being made in instalments or to multiple
       buyers/sellers?
              |
              +-- YES --> Map each payment, buyer's share,
              |           seller's share and reporting
              |           requirement before payment.
              |
              +-- NO --> Proceed with the documented
                          deduction and reporting plan.
              |
              v
       Deduct at the applicable time; deposit and report
       within the deadline for the chosen route; preserve
       proof of payment and filing; issue the TDS certificate.

Decision-tree caution: The route depends on the actual facts and applicable law. Do not assume that a seller’s NRI label, overseas bank account or passport alone settles tax residency. Equally, do not assume that Form 141 Schedule E determines the correct rate for you.

2. Form 141: What changed from 1 October 2026?

The Income-tax Rules were amended to introduce the revised procedure. For an eligible resident individual or HUF buying immovable property from a non-resident, Schedule E of Form 141 provides a route through the buyer’s PAN-based e-filing login without requiring a TAN solely for that transaction.

Buyer and seller	Compliance route to examine
Resident individual/HUF buying from a non-resident	Form 141, Schedule E, if the conditions are met
Company, firm, LLP or other buyer not eligible for Schedule E, buying from a non-resident	Applicable TAN-based TDS procedure
Buyer purchasing from a resident seller	Applicable resident-seller provisions; Schedule B of Form 141 where relevant

The new facility is a filing-route change, not a blanket change in the tax treatment of a non-resident seller’s property transfer.

3. Do not apply the resident-seller rate automatically

One of the costliest mistakes is to apply the familiar 1% TDS rate associated with certain resident-seller property transactions to a purchase from a non-resident.

A non-resident seller’s transaction must be examined under the applicable provisions for payments to non-residents. The rate and amount of deduction depend on the legal character of the payment, the seller’s circumstances, the applicable rates and any valid determination or certificate.

Before fixing the payment amount, examine:

• The seller’s tax-residency status for the relevant period.

• The nature of the gain and the applicable tax provisions.

• The consideration and other facts relevant to the deduction.

• The seller’s PAN and other prescribed particulars.

• Whether a valid lower- or nil-deduction certificate or determination applies.

In the absence of an applicable determination authorising a lower deduction, the buyer should not simply deduct tax on an assumed net gain or use a resident-seller rate. The amount to be withheld must be determined under the governing provisions for the actual transaction.

Where appropriate, the seller may seek a lower or nil deduction certificate under section 395(1), and the buyer may seek a determination under section 395(2). These routes should be considered early enough to avoid delaying the payment or creating a short-deduction exposure.

Practical rule: Settle the TDS position before the payment date—not after the sale deed has been registered and the money has left the buyer’s account.

4. When must TDS be deducted?

TDS timing is not postponed merely because the sale deed is registered later or the balance payment is scheduled for another date.

The buyer should identify the applicable trigger—credit or payment, whichever is earlier under the relevant provision—and document the deduction for each payment or credit.

For an instalment-based transaction, prepare a payment schedule showing:

• The amount and date of each instalment.

• The portion attributable to each buyer and seller.

• The TDS calculation and amount deducted.

• The filing and deposit deadline for each deduction.

Do not assume that an advance paid before registration can be ignored for TDS purposes.

5. Schedule E filing and the deadline

For an eligible transaction reported through Form 141, Schedule E, the filing and payment must be completed within 30 days from the end of the month in which tax is deducted.

For example, where deduction takes place on 21 October 2026, the 30-day period from the end of that month ends on 30 November 2026.

Do not confuse this with the deadlines applicable to the separate TAN-based quarterly statement route. Where Schedule E is not available, the buyer must follow the applicable deposit and reporting requirements for that route.

Keep the challan, filed statement, acknowledgement and TDS certificate available for the buyer’s records and the seller’s tax-credit reconciliation.

6. Multiple buyers or sellers: Do not treat the transaction as one undivided payment

Joint ownership can complicate both deduction and reporting.

Where there are multiple buyers: Each deductor must file separately for their own share of the transaction, following the applicable procedure. The form also requires the prescribed particulars of the buyers and their respective shares.

Where there are multiple sellers: A single Form 141 may cover multiple deductees only when the prescribed conditions are met, including the same deductee category and the same month of deduction. A resident seller and a non-resident seller cannot simply be combined in the same form; the applicable schedules and procedures must be followed separately.

Before making payment, reconcile the sale deed, ownership shares, payment instructions and TDS reporting plan. A mismatch between the registered ownership and the amounts reported can create avoidable questions later.

7. Verify the seller’s details before filing

The buyer should obtain and verify the information required for the applicable form and rate determination. Depending on the transaction, this may include:

• Seller’s name, PAN and address.

• Non-resident status and prescribed overseas particulars.

• Tax Residency Certificate and Tax Identification Number, where required.

• Sale consideration, ownership share and payment details.

• Relevant lower- or nil-deduction certificate or determination, if obtained.

Missing or invalid PAN and other prescribed particulars can trigger higher-rate consequences under the applicable provisions. Do not wait until the last day to discover that the seller’s information is incomplete.

8. What can go wrong for the buyer?

A buyer who fails to deduct tax, deducts less than required or misses the applicable deposit or reporting deadline may face consequences under the Income-tax Act, including interest, fees, penalties or other proceedings where the statutory conditions are met.

The seller’s promise to pay the tax later does not, by itself, remove the buyer’s compliance obligation.

Nor should the buyer assume that registration of the sale deed, payment through a bank or the use of an e-filing form proves that the correct tax has been deducted.

Where funds are to be remitted outside India, FEMA and banking documentation should also be examined separately. Income-tax TDS compliance and the permissibility or documentation of a remittance are related transaction issues, but one does not automatically satisfy the other.

CA S.Ahuja Perspective

The new Schedule E route removes one procedural hurdle for eligible individual and HUF buyers. It does not remove the need to determine the seller’s status, calculate the correct deduction, document each payment and meet the applicable deadline.

Before signing off on a purchase from an NRI, a buyer should be able to answer three questions:

1. Have we selected the correct TDS route?

2. Can we support the rate and amount deducted with the applicable law and documents?

3. Have we assigned responsibility for every deduction, deposit, filing and certificate?

If any answer is uncertain, resolve it before releasing the money.

The safest property transaction is not merely one in which the sale deed is registered. It is one in which the buyer can also defend the TDS treatment adopted.

Your Business Has 10 Heads of Ravana. Which One Is Eating Your Wealth?

Vijaya Dashami Special | A 20-day business health check for promoters — from Dussehra to Diwali

By CA Surekha S Ahuja | Casahuja.com

Ravana burns in one evening. Business wealth doesn't.

It erodes slowly—through decisions postponed, warning signs explained away and problems everyone sees but nobody owns.

Record turnover, unpaid suppliers. Rising profits, rising debt. Decades of growth, yet the business still depends on one person. A tax issue ignored until the notice arrives.

From the outside, the business looks successful. Inside, the value on paper may be far greater than the wealth actually being created.

This Dussehra, find the heads before they find you. By Diwali, start defeating them.

The 10 heads of Ravana inside your business

1. Profit without cash

The profit and loss account shows a profit. The bank account disagrees. Cash is trapped in receivables, inventory and unadjusted advances.

Test: Can you explain, with numbers, where your profit went?

Act: Review operating cash flow, receivable ageing and inventory every month. Assign responsibility for releasing blocked cash.

2. Growth that destroys value

More branches, more orders, more borrowing, thinner margins. Turnover is not wealth. Profitable, cash-generating growth is.

Test: Before expanding, do you know the additional capital required, the margin earned and when the cash will return?

Act: Approve no major expansion without a funding plan, realistic cash-flow projections and an assessment of expected returns.

3. Customers using you as their bank

You pay employees and suppliers, then wait months for customers to pay. You are financing their business with yours.

Test: Which customers are consuming the most of your cash through overdue payments?

Act: Set customer-wise credit limits, weekly collection targets and escalation rules. A promise to pay is not a payment.

For eligible micro and small enterprises, delayed-payment provisions may also have income-tax consequences for the buyer. The applicable statutory conditions and exceptions must be checked before relying on this as leverage.

4. Borrowing that hides the real problem

Another loan. A bigger overdraft. More money from the promoter. The pressure eases, then returns—often larger.

Test: Is the borrowing covering a temporary timing gap or a recurring operating deficit?

Act: Prepare a rolling 13-week cash-flow forecast. Diagnose the cause before borrowing more.

5. Costs nobody owns

Excess stock, idle capacity, rework, freight and unnecessary overheads. Harmless individually, they can collectively eat away the margin.

Test: Can your finance team explain why margins have changed and which costs are growing fastest?

Act: Identify the major cost leakages, assign responsibility and measure actual savings—not merely proposed cuts.

6. One customer, one supplier, one person

Stability that rests on a single relationship is fragility in disguise.

Test: What happens if your largest customer stops buying tomorrow?

Act: Measure customer and supplier concentration, develop alternatives, document critical processes and build a second line of management.

7. Controls that exist only on paper

The same person initiates, approves and records transactions. Reconciliations remain pending. Stock differences are explained away.

Test: Could an unauthorised payment or inventory loss go unnoticed for months?

Act: Separate duties, set approval limits, reconcile independently and verify inventory physically. Investigate exceptions instead of normalising them.

8. Compliance deferred until the notice

A missed deadline, unsupported expense or incorrect tax position may look insignificant until interest, penalties, disallowances or litigation follow.

Test: Do you know your unresolved tax exposures, upcoming deadlines and the evidence supporting material tax positions?

Act: Maintain a compliance calendar with named responsibility and a separate register of unresolved issues, potential liabilities and corrective deadlines.

9. Family disputes waiting to happen

Ownership, management roles, remuneration, succession and exit expectations remain informal because nobody wants an uncomfortable conversation.

Then a founder retires, a shareholder dies or the next generation takes control—and the business becomes the battlefield.

Test: Could the business continue smoothly if a key shareholder were no longer available?

Act: Review ownership records, succession arrangements, decision-making authority and shareholder agreements with appropriate professional advice.

10. The promoter as bottleneck

Every decision waits for one person. Managers report activities rather than results. Financial information arrives too late to influence decisions.

The promoter remains busy, but the business cannot grow beyond the promoter's personal capacity.

Test: Can your business function effectively for 30 days without your daily intervention?

Act: Build a monthly management information system covering cash, receivables, inventory, margins, debt, compliance and major business risks. Delegate defined decisions and review measurable outcomes.

The 20-day challenge: Identify the Ravana. Act before Diwali.

Vijaya Dashami is the day to identify what is weakening your business. Diwali is your deadline to demonstrate that corrective action has begun.

Do not attempt to solve every problem in 20 days. Identify the three weaknesses posing the greatest threat to your cash, profitability or business continuity and act on them.

Days 1–5 | Identify. Review the ten warning signs. Select your three highest-priority risks and quantify their financial or operational impact.

Days 6–10 | Assign. Name a responsible person for each risk. Set a measurable target, a deadline and the authority needed to act.

Days 11–15 | Execute. Begin collections, address avoidable working-capital blockages, correct control weaknesses and act on overdue compliance issues.

Days 16–20 | Verify. Compare results with the starting position. Record what improved, what remains unresolved and which decisions require the promoter's intervention.

Risk area	What to measure	Diwali target
Overdue receivables	Cash collected against the recovery plan	Demonstrable collection progress
Excess inventory	Value of slow-moving or avoidable stock	Measurable reduction or a documented disposal plan
Funding pressure	Forecast cash gap	A credible, funded cash-flow plan
Cost leakage	Actual savings against the baseline	Verified savings or corrective action
Compliance exposure	Open issues and approaching deadlines	Documented action on priority exposures
Promoter dependency	Decisions delegated and completed	Reduced unnecessary escalation

Do not count meetings held. Count what changed.

Some problems will take longer than 20 days to resolve. That is acceptable. What is not acceptable is reaching Diwali without ownership, a deadline or evidence of progress.

The Diwali test is simple: What has improved, what risk has reduced, and what remains to be done?

CA S. Ahuja Perspective

The most dangerous business risks are rarely hidden. They sit in plain sight—in the ageing report, the rising debt, the unexplained margin decline, the unsigned agreement or the unresolved compliance issue.

They survive because the promoter is busy with the next order, the next expansion or the next funding round.

But growth and strength are not the same thing.

The real test is whether your business can generate sustainable cash, earn adequate returns, meet its obligations, withstand disruption and protect the wealth its owners have worked to create.

This Vijaya Dashami, do not ask only how much your business has grown.

Ask what could destroy that growth—and which decision you have been postponing.

You do not need to defeat all ten heads today. You do need to stop ignoring them.

By Diwali, make sure at least one of your business's most dangerous weaknesses is being decisively addressed.

Because the real victory is not burning an effigy for one evening.

It is protecting the value you have built, one business decision at a time.

Casahuja.com | Practical tax, finance and business advisory for promoters and enterprises.