Weekly
Regulatory Brief

The Bankers' Books Evidence Act, 2026, which received Presidential assent on 13 August 2026 and replaces the 1891 Act of the same name, will commence on 1 October 2026. The new Act is technology-neutral: a banker's book now includes records kept in physical, electronic, digital, virtual and cloud-based form, and certification may be by manual, digital or electronic signature. Courts must record a special cause in writing before summoning a bank official where the bank is not a party, and the Central Government may extend the framework to specified financial-sector entities.

The Directorate of Income Tax (Systems) has notified the format, procedure and guidelines for SFT-2517 under s.508(1) of the Income-tax Act, 2025 read with rule 237(6) of the Income-tax Rules, 2026. The statement carries capital gains on transfer of listed securities so the figures can pre-fill the return. Every depository under s.2(1)(e) of the Depositories Act, 1996 must file it, half-yearly: the half ending 30 September is due by 31 October and the half ending 31 March by 30 April. Depositories must also give the same data to the account holder for reconciliation against Form 168.

The companion notification covers SFT-2518, capturing capital gains on transfer of units of mutual funds, to be filed by the Registrar and Share Transfer Agent registered with SEBI. Same statutory basis and the same half-yearly calendar as SFT-2517, so the first statement under the 2025 Act is due by 31 October 2026. The RTA must also pass the information to the investor for Form 168 reconciliation. Expect mutual fund gains to arrive pre-filled; switches and SWP redemptions are where reported cost most often goes wrong.

GSTN has removed the portal validation that blocked an appeal where the demand order showed NIL or Zero. Where liability is disputed but the taxpayer had already paid before the order issued, an appeal in Form GST APL-01 can now be filed against that order. This closes a gap first flagged on the portal in April 2026 and is worth revisiting for any appeal abandoned on this ground, subject to limitation.

Acting on a Supreme Court order dated 4 August 2026, the RBI has issued draft Reserve Bank of India (Know Your Customer) Amendment Directions, 2026 for public comment. They amend the "Operations of Bank Accounts and Money Mules" instructions in the KYC Directions, 2025 and prescribe the SOP a bank must follow before placing a temporary debit hold on an account or amount linked to money-mule activity or cyber-enabled fraud. The consolidated draft covers all commercial banks (including SFBs, payments banks, RRBs and local area banks) and urban cooperative banks; final directions will issue separately for each class. Comments are due by 2 October 2026 via Connect 2 Regulate or e-mail.

FIU-IND has issued non-compliance notices under s.13 of the PMLA, 2002 to fifteen offshore Virtual Digital Asset Service Providers: Weex, Blofin, Rezorex, Bitunix, DigiFinex, Toobit, XT.com, Latoken, WOO X, Pionex, ChangeNow, SimpleSwap, Fixedfloat, WhiteBIT and Guardarian. As nodal officer under s.79(3)(b) of the IT Act, 2000 read with rule 3(1)(d) of the IT (Intermediary Guidelines) Amendment Rules, 2025, the Director has also ordered their applications and URLs taken down. VDA service providers, onshore or offshore, have had to register with FIU-IND as reporting entities since March 2023.

As part of the RBI's review of every FEMA circular issued since 1 June 2000, seven A.P. (DIR Series) circulars that had ceased to be operative through later amendment, redundancy, overlap or supersession are withdrawn. Five concern ECB policy, one the MTSS sub-agent list and one investment in tax-free secured redeemable non-convertible bonds. Nothing is revived and no new obligation arises; the value is housekeeping, so any standing FEMA or ECB opinion citing them should be re-pointed.

The RBI (Priority Sector Lending - Targets and Classification) Third Amendment Directions, 2026 [RBI/2026-27/256] change one date. The Second Amendment of 7 August 2026 had let banks exclude advances made against fresh FCNR(B) deposits of three to five years, and NRE term deposits of three years or more, from Adjusted Net Bank Credit where those deposits were mobilised up to 30 September 2026. That end date is now brought back to 31 August 2026, so the concession has already closed.

The International Taxation Committee has issued the Handbook on Residential Status for NRIs - Tax and FEMA Aspects, a July 2026 edition running to 165 pages, now on the ICAI Publication Portal. The useful part is Chapter 2, which works through s.6(1) to s.6(8), s.6(13) and s.6(14) of the Income-tax Act, 2025 as questions and answers and gives an old-to-new mapping table for every limb, so the 182-day and 60-day / 365-day tests, the employment-departure and visiting-PIO carve-outs, the Rs 15 lakh threshold, the foreign-bound-ship day count, deemed residency and the not-ordinarily-resident conditions can each be traced from the 1961 provision to its 2025 successor. Chapter 10 sets out the four combinations that arise when income-tax residence and FEMA residence diverge. A companion Handbook on Safe Harbour Rules (82 pages) sits alongside it.

Notification No. 118/2026 [S.O. 5003(E)] specifies the Secretary, ITE and C, Government of Andhra Pradesh under s.258(1)(b) of the Income-tax Act, 2025, and a companion Order under s.258(1) of the same date directs the DGIT (Systems) to furnish the information. The state supplies Aadhaar or PAN and a tax year; the Department answers Yes, No or Not Available against an agreed income threshold rather than disclosing income figures, and reports non-availability where Aadhaar is not linked to PAN. Exchange terms and data deletion are to be fixed by a memorandum of understanding.

TRACES is issuing LDC and NDC for Tax Year 2026-27 under the Income-tax Act, 2025, on Form 13 applications filed up to 31 March 2026. Where an old section maps to several new ones (the portal cites 194A and 194J(b)), the certificate has been mapped to every relevant new-Act section. Check the section on each client's certificate against the actual nature of payment before applying the lower rate, rather than assuming a clean one-to-one carry-over.

Correction requests for Schedule A, B, C and D (Cash) of Form No. 141 are available on TRACES. The correction facility for Schedule D (Kind) is not yet live and is stated to be coming shortly. A deductor with an error in Schedule D (Kind) should hold the correction rather than attempt a workaround through another schedule.

No MCA circular, notification or public notice issued in the 7 - 12 September window; the latest remains General Circular No. 4/2026 of 31 August 2026 extending CCFS-2026 to 15 September. CBIC issued no GST notification, circular, instruction or order in the window, so the only GST movement was the portal advisory at item 04. Also noted, no action: RBI's Local Area Banks CRR and SLR Second Amendment Directions (11 September) and two updates to the UNSC sanctions lists under s.51A of the UAPA, 1967 (7 September). SEBI's 9 and 10 September circulars on commodity-derivatives position limits, and its consultation papers on MII governance and the consolidated account statement, are capital-markets items with no audit or practice angle. On watch: the CCFS-2026 window shuts on 15 September. The 57th GST Council meeting, listed for 12 September, is widely reported to have been put back to 7 October 2026, with the officers' meeting on 5 and 6 October; the GST Council Secretariat has not published that memorandum on its website, so treat the new date as indicative until it appears officially.