Regulatory Referencer

I. DIRECT TAX: SPOTLIGHT

1. Guidance for application of the Principal Purpose Test (PPT) under India's Double Taxation Avoidance Agreements — Circular No. 1/2025 dated 21st January, 2025

2. Rule 114DA(1) amended to substitute Form No. 49C and to provide that the said Form be filed within eight months from the end of the financial year — Income-tax (Fourth Amendment) Rules, 2025- Notification No. 14/ 2025 dated 7th February, 2025

II. FEMA READY RECKONER

RBI amends receipt and payment norms for trade transactions between two ACU residents:

The RBI has amended FEMA Notification No. 14(R), the Manner of Receipt and Payment Regulations. It has been now been provided that payment from a resident in the territory of one participant country to a resident in the territory of another participant country for a trade transaction should be through the ACU mechanism, or as per the directions issued by RBI to Authorised Dealers. Here, participant country means Member countries of ACU other than Nepal and Bhutan. Thus, the requirement is now restricted only to residents of these countries and not to suppliers located in these countries. Proviso meant for suppliers to India who are residents of countries other than countries