NICAI Update
CA Raj Chawla
Quotes of the day:
1. Relations are insurance policies against loneliness. They need to be renewed with regular premium paid with communication, feelings, love and care.
2. Don’t wake up with the Regret of what you Couldn’t Accomplish Yesterday. Wake up while Thinking about what you will be Able to Achieve Today.
NICAI Update
I. CBDT has issued this notification prescribing the *procedure, format and standards for generation of Unique Identification Number (UIN)* for declarations filed in *Form No. 121* and reporting requirements by the payer.
1. When is Form 121 relevant?
Applicable where no TDS is required under Section 393(6) of the Income-tax Act, 2025
Payee furnishes declaration in Part A of Form 121 to payer
PAN is mandatory in such declaration
2. Key Responsibility of Payer
Accept declaration in paper or electronic form
Verify and digitize (if received physically)
Generate UIN for each declaration
Report details in Part B of Form 121
3. Structure of UIN (26 Characters)
UIN will consist of 3 parts:
Sequence Number (10 characters) Starts with “D” + 9 digits
Tax Year (6 digits) - Example: 2026-27 → 202627
TAN of Payer (10 characters)
4. Important Points on UIN Generation
Separate UIN for each declaration
Single running series for all declarations (paper + electronic)
Sequence resets every year for each TAN
5. Filing of Part B (Critical Compliance)
Payer must file Part B of Form 121
To be submitted quarterly on income-tax portal
Mandatory even if no TDS is deducted
6. Effective Date
Applicable from 01 April 2026.
II. The Corporate Laws (Amendment) Bill, 2026, brings significant changes to the LLP Act, 2008, and the Companies Act, 2013. Let's break it down:
LLP Act, 2008 - 2026 Amendment
1. _IFSC LLP Framework: India Going Global_
- LLPs can now operate as "Specified IFSC LLPs" with global reporting standards
- Need forex accounting expertise, IND AS/IFRS alignment, and multi-currency reporting systems
- Huge advisory scope in cross-border fund structuring and global investment vehicles.
2. _Trust to LLP Conversion: Powerful Restructuring Tool_
- Applicable to SEBI/IFSCA regulated trusts
- Critical evaluation areas: tax impact, GST angle, and stamp duty implications
- Use case: AIFs, investment platforms, and structured funds can reorganise efficiently.
3. _Compliance & Penalty Reform: Clarity with Accountability_
- Mandatory professional certification
- Fixed penalty regime introduced (e.g., ₹10,000 for minor non-compliances)
- Shift from interpretation-based compliance to evidence-based compliance
III. Companies Act, 2013 - 2026 Amendment
1. _Decriminalisation & Penalty Framework_
- Multiple offences shifted from criminal liability to civil penalties
- Introduction of structured penalties with caps
- Litigation exposure reduces, but focus shifts to faster adjudication timelines and strong compliance systems.
2. _Threshold Rationalisation: High Impact Change_
- CSR applicability threshold increased from ₹5 Cr profit to ₹10 Cr profit
- Small Company thresholds doubled (PUC ₹10 Cr to ₹20 Cr, Turnover ₹100 Cr to ₹200 Cr)
- Many mid-sized companies will exit CSR obligations and high compliance burden.
3. _NFRA: Stronger Regulatory Oversight_
- Enhanced enforcement, penalty, and debarment powers
- Mandatory auditor filings and penalties up to ₹1 Cr for firms
- Increased scrutiny on listed entities and large unlisted companies.
IV. Other key changes include:
- Meetings & Governance Flexibility: AGMs/EGMs allowed in physical, virtual, or hybrid mode
- Buyback & Capital Flexibility: Two buybacks permitted in a year
- IFSC Companies: Books and share capital allowed in foreign currency
- DIN Compliance Tightened: Mandatory periodic KYC for Directors
- Board Report: Enhanced accountability with mandatory explanations for auditor's qualifications/remarks.
V. Follow the CA Raj Chawla NICAI Update Channel on WhatsApp to get the latest ICAI news, announcements, professional updates, and important notificationsinstantlyLink :https://whatsapp.com/channel/0029Vb6q4i8LNSZwQ3bbxY2j
With best regards
CA (Dr) Raj Chawla
B.Com (Hons), FCA, FCS, FCMA, LLB
MIMA, DISA, MICA, Phd, ASA (Aust), CMP (USA)
712, New Delhi House
27,Barakhamba Road, New Delhi-110001
Ph. Off. 011-43581083
Cell: 98110-81083