Volume #15 | IssueNo. 295/2023 | December 2023
The Heart of the Matter!
Welcome 2024 ! It is unbelievable that we are just a year short of completing a quarter century. Incredible transformations have taken place in this period at such a never-before exponential pace, that many a times we are left gasping for breath ! Sometimes in amazement, sometimes in anxiety, sometimes in fear, sometimes catching up, sometimes in despair, sometimes in joy and at times unable to even fathom what the changing world means to us !!
In all of this, what remains constant is human bonding and the deep relationships that we forge with each other. Relationships must be seeded, nurtured and carefully grown over the years. They cannot be built by having friends on social media whom we cannot recognise when we meet. They may be a platform to connect but to grow, it takes efforts and years. Well, having said this, for me personally 2023 was a year of leveraging relationships built over the years.
Someone said “The bond that links your true family is not one of blood, but of respect and joy in each other’s life.” Whether for the huge office renovation project that we undertook in 2023, or for the new areas of professional practice that we expanded into, or the just concluded wedding in the family, all that I had to do was dip into my network of trusted friends and family. And lo and behold, the builder was found, architect identified and the office was transformed into a unique green working space that all of us are proud of. Same with the professional friends who extended a collaborative hand for taking up new assignments. Wedding is a huge project that could be executed flawlessly as an eco-friendly initiative, thanks to the neighbourhood flower decorators, client turned waste management partners and green champions, caterers and music artistes that were traced back to old connections and even the domestic support staff that rose to the occasion.
The ‘people power’ that I enjoy gives me strength and courage to face life’s challenges and I vow to give it back in equal measure to others. But remember, as Rumi said “Our greatest strength lies in the gentleness and tenderness of our heart.” I am incredibly grateful to the affection and support received from a wide spectrum of people that made 2023 a memorable one for me. Have you paused and reflected, what or who made the year gone by a memorable one for you ?
On the professional front, it is pertinent to note that during 2023, the regulators were extremely active giving corporate India enough fodder to strategise and act. As well as to carry content in the 12 issues of Samhita ! Just between MCA, SEBI and RBI we carried about 65 notifications / circulars / regulations. Compliance expectations are only getting higher for sure. Here’s a quick recap of important ones that we carried from 284th to 295th issue during 2023:
- 45 forms released in MCA V3 and Several Rules Amended
- Strike off of companies centralized
- Guidelines on Default Loss Guarantee in Digital Lending market
- PMLA Rules introduced for Practising Professionals
- Disclosure of material events and information under regulation 30 of SEBI LODR
- Voluntary delisting of non-convertible securities
- Dematerialisation of securities
- SBO compliance for LLPs
- Valuation norms under Angel Tax Provisions
- Mandatory linking of PAN with Aadhaar
- Changes in insolvency process for corporate
- Karnataka Stamp Act Amendment Bill
For any previous issues of Samhita and the readers’ feedback, please visit
Warm wishes for a memorable and fulfilling New Year 2024!
Karnataka Stamp Act Amendment Bill
A Bill to amend the Karnataka Stamp Act, 1957 has been passed by the Legislative Council on December 12, 2023. The Bill has been introduced with a view to enhance the rate of Stamp Duty for most cases and make a separate provision regarding levy of Stamp Duty on Bank Guarantee. This paves way for increase in the revenue of the state government. These amendments will become effective as and when it is approved by the Legislative Assembly.
Highlights of the Bill are carried in a brief note, which can be accessed from the link below.
The RBI vide its notification dated December 19, 2023 has imposed restrictions on Banks, Financial Institutions and NBFCs [collectively known as “Regulated Entities” (REs)] for making investments in Alternative Investment Funds (AIFs) which are effective immediately. The restrictions imposed by RBI are as follows:
- REs shall not make investments in any scheme of AIFs which has made Downstream Investments (DI) either directly or indirectly in a Debtor Company of the RE. Debtor Company for this purpose means any Company to which the RE currently or previously had a loan or investment exposure anytime during the preceding 12 months.
- Where the RE is already an investor in an AIF and the AIF makes a DI in any such Debtor Company, then the RE shall liquidate its investment in the AIF within 30 days from the date of such DI by the AIF.
- Where the RE is already an investor in an AIF which has made DI in the Debtor Company, then the RE shall liquidate such investments within 30 days of this circular. REs have been directed to advise the AIFs suitably on this matter immediately.
In the event of REs being unable to liquidate their investment within the prescribed time limit, they shall make 100% provision on such investments.
- Investment by REs in the subordinate units of AIF schemes which have adopted ‘priority distribution model’ shall be subject to full deduction from RE’s capital funds. [Priority Distribution Model- where one class of investors (other than sponsor/manager) share loss more than pro rata to their holding in the AIF vis-à-vis other classes of investors/unit holders, since the latter has priority in distribution over former.
SEBI vide notifications dated December 21, 2023 has replaced the term ‘Social Audit’ with ‘Social Impact Assessment’ in the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 (LODR). Pursuant to the same, the requirement for audit of annual impact report of a Social Enterprise registered on Social Stock Exchange or which has raised funds through Stock Exchange prescribed under SEBI LODR, is now substituted with the concept of assessment by a Social Impact Assessment Firm employing Social Impact Assessor.
DGFT vide Trade Notice dated December 26, 2023 has informed that the transition period for mandatory filing of applications for Non-Preferential Certificate of Origin(CoO) through e-CoO, online platform is extended till December 31, 2024. The exporters and Non-Preferential CoO Issuing Agencies will have an option to use the online system. However, the existing system of processing applications in manual/paper mode will be permitted during this interim period.
Owing to technical issues, several returns for AY 2018-19, 2019-20 & 2020-21 filed validly under Section 139 or 142(1) or 119 of the Income Tax Act, 1961 could not be processed under Section 143(1) of the Act. Due to this, tax payers are unable to receive legitimate refund. Considering these issues, the CBDT vide order dated December 01, 2023 has extended the timeline for processing such returns and send intimation to the assessee concerned to January 31, 2024. The said relaxation is not available for the following:
- returns selected in scrutiny
- returns remain unprocessed where either demand is shown as payable in the return or is likely to arise after processing it
- returns remain unprocessed for any reason attributable to the assessee
GSTN is introducing two-factor authentication (2FA) for taxpayers to strengthen the login security on GST portal. The pilot rollout has been done for the state of Haryana and is working seamlessly. The 2FA will be rolled out for Punjab, Chandigarh, Uttarakhand, Rajasthan and Delhi in 1st phase. In 2nd phase, it is planned to be rolled out for all other states across India.
Quote of the day
"If you love someone, you are always joined with them - in joy, in absence, in solitude, in strife."
Disclaimer: The contents of this Newsletter are only a summary and has not dealt with any issue in detail. Any action taken or proposed to be taken must be in consultation with professionals and not merely based on the articles / news updates. S. C. Sharada & Associates disclaims all liability on action taken without professional advice.