Statutory compliance in 2026 is no longer a periodic filing exercise; it is a real-time data integration challenge. With the full implementation of the Income Tax Act 2025 and GST 2.0, Chartered Accountants must navigate a landscape defined by “Precision Compliance.” This step-by-step guide in statutory compliance provides a technical roadmap for practitioners to manage risk and optimize client capital.
For any West Bengal entrepreneur, compliance failures lead to immediate credit freezes. As a CA, your role is to ensure that statutory defaults do not hinder a client’s ability to secure a business loan or leverage their property for expansion.
1. Income Tax: Transition to the 2025 Act
Legal Provision: The Income Tax Act 2025 (effective April 1, 2026) introduces the “Tax Year” concept and renumbers all major forms (e.g., Form 130 replacing Form 16).
Applicability: Applies to all taxpayers, with a specific focus on high-salary earners (₹15–25 Lakh) who can now leverage expanded HRA and education allowances.
Example: An employee in a Pune or Bengaluru IT hub now qualifies for 50% HRA exemption, significantly reducing taxable income under the Old Regime.
Common Error: Using old form numbers (like 26AS) instead of the new Form 168 (Annual Tax Passbook) in client communications.
Practical CA Tip: Update your payroll software immediately to reflect the new Draft Income Tax Rules 2026 limits. The ₹3,000/month education allowance is a major tax-saving tool for clients.
Client Impact: Increases net take-home pay, improving the client’s Debt Service Coverage Ratio (DSCR) for a business loan upto 1 crore.
2. GST: Real-Time Interest & Credit Sequence
Legal Provision: GSTN Advisory No. 649 and Section 50 mandate auto-calculated interest based on the net cash liability, factoring in the Electronic Cash Ledger (ECL) balance.
Applicability: Mandatory for all GSTR-3B filers from the January 2026 tax period onwards.
Example: A manufacturer buying machinery who deposits cash in the ECL on the due date but files the return 5 days late will now only pay interest on the shortfall, not the total liability.
Common Error: Attempting to manually edit interest downward in Table 5.1 of GSTR-3B; the portal has made this field non-editable for downward revisions.
Practical CA Tip: Advise clients to maintain a “Tax Buffer” in their ECL. If liquidity is tight, refinancing high-interest short-term debt into a 10% loan against property is cheaper than paying the 18% p.a. GST interest.
Client Impact: Reduces unnecessary tax outflow. Clean GST records are vital for secured overdraft approvals.
3. TDS/TCS: The Punctuality Trap (Section 234E)
Legal Provision: Section 234E imposes a mandatory fee of ₹200/day for late filing of TDS/TCS statements, capped at the total tax amount.
Applicability: All deductors/collectors filing quarterly returns (Forms 24Q, 26Q, 27Q).
Example: A developer in Howrah filing Q3 TDS returns 15 days late faces an auto-levied fee of ₹3,000, which must be paid before the return is accepted.
Common Error: Failing to pay the 234E fee via Challan ITNS 281 before filing, leading to the return being flagged as “Defective” on the TRACES portal.
Practical CA Tip: Implement automation in daily operations for TDS. Use a system that reconciles bank payments with TDS liability 5 days before the month-end.
Client Impact: Prevents GST demand notices and negative remarks in mortgage loan eligibility reports.
4. Companies Act: MSME-1 and Significant Beneficial Ownership (SBO)
Legal Provision: Sections 77-87 (Charge Management) and Section 90 (SBO) require companies to disclose all charges on assets and individuals who hold ultimate control.
Applicability: All Private Limited and Public companies registered with the MCA.
Example: A logistics firm expanding its warehouse in North 24 Parganas must file Form CHG-1 within 30 days of creating a mortgage for a LAP.
Common Error: Delaying charge registration. Beyond 30 days, ad-valorem fees apply; beyond 120 days, the company requires Central Government condonation.
Practical CA Tip: Ensure the KMC mutation process name matches the MCA records exactly. Any mismatch can stall the creation of a “Charge” by the bank, delaying the business loan upto 1 crore disbursal.
Client Impact: Proper charge management ensures the company remains “Bankable” for top 5 banks and NBFCs.
5. Audit Risk: Section 44AB & Clause 44
Legal Provision: Section 44AB mandates tax audits for businesses with turnover exceeding ₹1 Crore (or ₹10 Crore if 95% of transactions are digital). Clause 44 requires a breakup of total expenditure into GST-registered and non-registered entities.
Applicability: All entities crossing the specified turnover thresholds.
Example: A manufacturer in Duttapukur must prove that their industrial shed expansion costs were paid to GST-compliant vendors to claim full ITC.
Common Error: Inaccurate reporting in Clause 44, leading to a penalty & risk area in GST audit later.
Practical CA Tip: Advise clients to use TReDS platforms for payments. This automates the data trail needed for Clause 44 reporting and improves CIBIL score fast.
Client Impact: A clean audit report is a prerequisite for refinancing industrialists looking to consolidate high-interest debt into a LAP.
6. Real Estate Compliance: Thika Tenancy & Mutation
Legal Provision: The West Bengal Thika Tenancy Act (updated 2026) allows for taller buildings and heritable rights, provided the Occupancy Certificate is maintained.
Applicability: Properties in specific zones of Howrah and North Kolkata.
Example: A business owner seeking a loan on Thika property must first secure an NOC from the Thika Controller.
Common Error: Assuming a “Thika Rent Receipt” is enough for a bank mortgage. Banks require a registered Lease Deed or NOC Factor.
Practical CA Tip: For clients in these zones, structuring business assets for long-term growth starts with property title cleanup. Ensure the boundary wall demarcation is documented before calling for a free property valuation.
Client Impact: Unlocks “Dead Capital” into active working capital.
7. Strategic Financial Engineering: Refinancing to Optimize Compliance
A core part of this step-by-step guide in statutory compliance is managing the cost of compliance. If a client is drowning in high-interest unsecured debt, they will inevitably skip tax payments.
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Refinance Unsecured to Secured: Move 18% business loans to 9.5% loan against property.
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Utilize Tax Shields: Interest on a secured business loan used for expansion is 100% tax-deductible under Section 37(1).
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Consolidate Debt: Use a Maximum loan amount for LAP with a 15-year tenure to lower monthly EMIs, freeing up cash for timely TDS and GST payments.
Frequently Asked Questions (FAQs)
1. What is the biggest compliance change for CAs in 2026?
The transition to the Income Tax Act 2025 and the new “Tax Year” nomenclature is the most significant shift. CAs must help clients navigate renumbered forms and expanded deduction limits.
2. Is mutation mandatory for a mortgage loan in Kolkata?
Yes. No top-tier bank will disburse a secured business loan without a completed KMC mutation and latest tax receipts.
3. How do I calculate the Section 234E late fee?
The fee is ₹200 per day of delay, starting from the day after the due date, capped at the total TDS amount for that statement.
4. Can I claim tax benefits on a loan against property?
Yes, but only for business or residential construction use. Check the loan against property tax benefits guide for Section 37(1) vs. Section 24(b) rules.
5. What is ‘Advisory No. 649’ in GST?
It is a system enhancement that auto-calculates interest in GSTR-3B while giving the benefit of any cash balance in the Electronic Cash Ledger.
6. Can a Thika property be used for warehouse expansion?
Yes, but it requires a specific NOC from the Thika Controller. This is a high-growth area in North 24 Parganas.
7. What is the ‘NOC Factor’ in bank disbursals?
A No Outstanding Certificate ensures the property has no tax liens, which is a mandatory check for top 5 banks.
8. Does ‘Industry Status’ for logistics affect taxation?
Yes. It allows logistics firms to access cheaper business loans and specific industrial tax exemptions.
9. How do I improve a client’s CIBIL score for a large loan?
Focus on improving CIBIL score fast by clearing small unsecured debts and ensuring no statutory defaults are reported.
10. Can I get a loan without a sanctioned building plan?
While difficult with banks, some NBFCs provide LAP without a sanction plan if the property has a long-standing KMC mutation.
Final Summary: Precision Compliance for Growth
A step-by-step guide in statutory compliance in 2026 is about more than just avoiding penalties—it is about building a “Fundable Profile.” By mastering the new income tax forms, GST interest logic, and property mutation rules, CAs ensure their clients can access the capital needed to scale.
Stay updated, automate your workflows, and always align tax planning with debt optimization.
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