Compliance Updates

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Company Law Updates

Amendments to Accounting Standard (AS) 22, under the Companies (Accounting Standards) Rules, 2021

The Ministry of Corporate Affairs (“MCA”) introduced amendments to the Companies (Accounting Standards) Rules, 2021, with a focus on Accounting Standard 22 – Accounting for Taxes on Income. These amendments are designed to align India’s accounting framework with the Organization for Economic Co-operation and Development’s “Pillar Two model rules”, which seeks to ensure that multinational enterprises pay a minimum level of tax regardless of where they operate.

Under Section 133 of the Companies Act, 2013, companies will now be required to provide specific disclosures relating to deferred tax assets and liabilities that arise due to “Pillar Two taxes”. This measure enhances transparency and consistency with international tax standards.

The amendments take effect immediately for certain provisions, while detailed disclosure requirements apply from reporting periods beginning 1 April 2025.

Introduction of the Companies Compliance Facilitation Scheme, 2026

MCA has extended the deadline for companies to file their FY 2024–25 Financial Statements and Annual Returns [e- Forms MGT-7, MGT-7A, AOC-4, AOC-4 CFS, AOC-4 NBFC (Ind AS), AOC-4 CFS NBFC (Ind AS), AOC-4 (XBRL)] on the MCA V3 portal until 31 January 2026, with no additional fees, considering the large filing volume and stakeholder challenges.

Ease of Doing Business: Directors/Designated Partners KYC filing now once in 3 (three) years.

The MCA has announced the Companies Compliance Facilitation Scheme, 2026, which will be operational from 15 April 2026 and will remain in force up to 15 July 2026. This scheme provides a one‑time relief opportunity for companies to regularize their pending statutory filings at significantly reduced costs.

Under the aforesaid scheme, the eligible companies can file pending annual filings by paying only 10% (ten percent) of the total additional fees payable on account of delays. Further, inactive companies are given the option to either apply for strike‑off or apply for dormant status at a nominal fee.

Company secretarial (cs) compliance for Private limited companies

Below is a summary of the compliances that need to be adhered to in the next quarter (April – June 2026):

FEMA Updates

FEMA (Export & Import of Goods and Services) Regulations, 2026

The Reserve Bank of India (“RBI”) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, which will come into effect on 1 October 2026, replacing the earlier 2015 regulations. These new regulations aims to simplify, consolidate, and modernize FEMA regulations for imports and exports.

Key features of the new regulations:

• Unified Framework: The regulations provide a single, consolidated structure governing both exports and imports of goods and services, reducing fragmentation and ambiguity in compliance. The new regulations provide additional flexibility for businesses managing cross-border trade and intercompany flows.
• Principle‑Based Approach: Moving away from prescriptive rules, the framework emphasizes principle‑based regulation, offering greater flexibility and clarity for businesses. Tighter consequences for delayed imports and unrealized exports.
• Delegation to Banks: A substantial portion of decision‑making and verification responsibilities, previously centralized with the RBI, has now been delegated to Authorized Dealer Category‑I banks.
• Ease for Micro, Small, and Medium Enterprises (“MSMEs”): By streamlining processes and lowering compliance hurdles, the regulations are particularly beneficial for MSMEs engaged in cross‑border trade.

Amendment in External Commercial Borrowing (ECB) Framework

The RBI’s amended External Commercial Borrowing (ECB) framework, effective 16 February 2026, marks a major shift toward a principle-based, market-aligned regime. Eligibility of borrowers is widened to LLPs and distressed entities, and lender norms are opened to include non‑residents and International Financial Services Centre institutions etc. Borrowing limits have also been significantly raised with financial institutions enjoying greater flexibility.

Key reforms include a uniform Minimum Average Maturity Period (MAMP) of 3 (three) years, with shorter terms allowed for manufacturing firms under capped amounts. The all-in-cost ceiling has been removed, leaving borrowing costs to be determined by market forces.

Further, ECB proceeds can now be used for land acquisition, industrial parks, and construction projects with trunk infrastructure, though restrictions on agriculture remain. Reporting has also been simplified, shifting from monthly filings to event-based submissions within 7 (seven) days of drawdown or servicing.

Overall, the new framework aims to ease business operations while ensuring prudential safeguards remain intact.

Labour and Employment Updates

Maternity Rights Upheld: 3 Month Age Bar under Section 60(4) Removed

On 17 March 2026, the Supreme Court of India in Hamsaanandini Nanduri v. Union of India (2026 INSC 246) held that the 3 (three)‑month age limit to the extent prescribed under Section 60(4) of the Code on Social Security, 2020 is discriminatory and violative of Articles 14 and 21 of the Constitution. The Court ruled that adoptive and commissioning mothers are entitled to 12 (twelve) weeks of maternity benefit from the date the child is handed over, irrespective of the child’s age.

Haryana Exempts Online Registered Shops from Timings Rules

The Haryana Labour Department’s notification dated 5 February 2026 grants online registered shops and commercial establishments an exemption from Section 9 (opening and closing hours) and Section 10 (close day) of the Haryana Shops and Commercial Establishments Act, 1958, subject to key conditions including separate approval for employing women in night shifts, adherence to maximum limits of 48 (forty-eight) hours per week and 10 (ten) hours per day (with a 12 (twelve) hour cap including rest), overtime payment at twice the normal wage rate, a mandatory 30 (thirty) minute break after 6 (six) hours, full compliance with applicable labour laws, and mandatory display of the notification at employee access points.

Madras HC Affirms Continuity of Labour Tribunals Under Industrial Relations Code, 2020

In United Labour Federation v. Union of India 2026 and Anr. LLR 135 (decided on December 9, 2025), the Madras High Court, held that existing Labour Courts and Industrial Tribunals constituted under the Industrial Disputes Act, 1947 will continue to adjudicate both pending and new cases until tribunals are constituted under the Industrial Relations Code, 2020.

Environmental Laws Updates

Supreme Court Rules NGT Can Use Project Cost to Determine Environmental Compensation

The Supreme Court of India, in M/s. Rhythm County v. Satish Sanjay Hegde (2026 INSC 102), upheld the environmental compensation imposed by the National Green Tribunal, ruling that the Tribunal can use project cost or turnover to determine compensation even without a fixed statutory formula. The Court held that such compensation is valid so long as it is rational, proportionate, and based on established environmental principles like “polluter pays.”

Ministry of Environment, Forest and Climate Change (MoEFCC) introduces Uniform, Industry Friendly Consent Framework

The Ministry of Environment, Forest and Climate Change (“MoEFCC”), through its notifications dated 23 January 2026, has amended the Uniform Consent Guidelines under the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act, 1974, thereby introducing a streamlined consent framework applicable across all States and Union Territories. The amendments provide that Consent to Operate shall remain valid until expressly cancelled, with regulatory oversight maintained through periodic inspections, eliminating the requirement for repetitive renewals.

The prescribed processing period for Red Category industrial consents has been reduced from 120 (one hundred and twenty) to 90 (ninety) days. Further, Micro and Small Enterprises situated in notified industrial estates are deemed to have been granted Consent to Establish upon submission of a self certified application, and site specific environmental assessments may now replace rigid siting criteria. Additionally, a uniform definition of ‘capital investment’ has been incorporated in Schedule II to ensure consistency and remove ambiguity in fee determination.

Environmental Clearance Exemption for Common Effluent Treatment Plants

The MoEFCC, through its notification dated 28 January 2026, has exempted Common Effluent Treatment Plants from the requirement of obtaining prior Environmental Clearance under the Environment Impact Assessment Notification, 2006, thereby streamlining regulatory approvals for such facilities while retaining oversight under other applicable environmental norms.

Consumer Law Updates

Tamil Nadu Warehousing Policy, 2026

The Tamil Nadu Warehousing Policy, 2026, together with the Tamil Nadu Circular Economy Investment Policy, 2026, was released on 13 January 2026. While the policy framework places significant emphasis on the agriculture sector, it also extends incentives and support to allied sectors such as technology, healthcare, and engineering, with the objective of promoting integrated infrastructure development and sustainable industrial growth across the State.

Bureau Indian Standards

Bureau of Indian Standards (Conformity Assessment) Amendment Regulations, 2026

The Bureau of Indian Standards (Conformity Assessment) Amendment Regulations, 2026, notified on 25 February 2026, require annual advance payment of license and certification fees, with non payment attracting suspension or cancellation. The amendment introduces 10 (ten) conformity assessment schemes with license validity of up to 5 (five) years and grants an 80% (eighty percent) processing fee concession to MSMEs and startups until 31 May 2029.

Aluminium and Aluminium Alloy Products (Quality Control) Order, 2026

The Aluminium and Aluminium Alloy Products (Quality Control) Order, 2026, issued on 11 March 2026 under Section 16 of the Bureau of Indian Standards Act, 2016, mandates BIS certification and Standard Mark for 17 (seventeen) categories of aluminium products. It provides phased compliance timelines for different enterprises, allows exemptions for export-only goods and limited R&D imports, and imposes penalties for non-compliance under the Bureau of Indian Standards Act, 2016.

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