April 2025 Newsletter: GST Roadmap, TDS on Partner Remuneration & Key Financial Compliance Updates

The April 2025 edition of CoralMetrix's "Crack the Code" newsletter provides a comprehensive guide for businesses entering the new financial year. Covering GST compliance planning, the newly introduced TDS provisions on partner remuneration, mutual fund industry reforms, professional tax amendments, and the FY 2025–26 compliance calendar, this edition serves as a practical roadmap for business owners, finance teams, and tax professionals.

GST Compliance Roadmap for FY 2025–26

As organizations begin a new financial year, reviewing GST compliance processes becomes critical. The newsletter outlines key procedural and compliance actions that businesses should undertake to avoid future risks and ensure smooth operations.

Key GST Action Points

Businesses should review and address:

• Goods Transport Agency (GTA) declarations and charge mechanism options.

• Letter of Undertaking (LUT) filings for exporters and SEZ suppliers.

• Composition Scheme eligibility and CMP-02 filing requirements.

• Dynamic QR Code compliance for large B2C taxpayers.

• GST refund timelines and pending claims.

• Credit note and debit note reporting.

• E-invoicing applicability and invoice numbering systems.

• HSN code reporting obligations.

• GST reconciliations across returns, books, e-invoices, and e-way bills.

• Input Tax Credit (ITC) reconciliation and validation.

A proactive compliance review at the beginning of the year can significantly reduce notices, mismatches, and audit challenges later.

Section 194T: TDS on Partner Remuneration

One of the most significant tax developments covered in this edition is the introduction of Section 194T of the Income Tax Act, effective from 1 April 2025.

What Has Changed?

Partnership firms and LLPs will now be required to deduct TDS at 10% on payments made to partners in the form of:

• Salary

• Remuneration

• Commission

• Bonus

• Interest

The provision applies when total payments exceed ₹20,000 in a financial year. TDS must be deducted at the earlier of payment or credit to the partner's account.

Why This Matters

The government introduced this provision to:

• Improve tax compliance.

• Prevent under-reporting of partner income.

• Strengthen advance tax collection.

• Increase transparency in partnership taxation.

Firms and LLPs should update accounting systems and internal processes to ensure compliance from FY 2025–26 onward.

Major Changes in the Mutual Fund Industry

The newsletter highlights several reforms introduced by SEBI aimed at improving investor protection, transparency, and efficiency within the mutual fund sector.

Key Reforms Include

• Introduction of Specialized Investment Funds (SIFs).

• Enhanced risk disclosure requirements.

• Faster deployment timelines for New Fund Offers (NFOs).

• DigiLocker integration for investment records.

• Improved transparency in commission structures.

• Stronger safeguards against mis-selling.

These measures are expected to create a more investor-friendly environment while promoting responsible distribution and better financial decision-making.

Karnataka Professional Tax Amendment

An important update for employers and salaried employees is the revision of Professional Tax rates under the Karnataka Tax on Professions, Trades, Callings and Employments Act. The revised provisions become effective from 1 April 2025.

Revised Tax Structure

• ₹200 per month for most months.

• ₹300 for the month of February.

• Annual professional tax liability increases from ₹2,400 to ₹2,500 for employees earning ₹25,000 or more per month.

Organizations should update payroll systems to accommodate these changes.

Compliance Calendar 2025–26

One of the most practical sections of the newsletter is the Financial Year 2025–26 Compliance Calendar, providing month-wise reminders for important GST, TDS, ROC, Income Tax, and statutory filing obligations. The calendar serves as a valuable planning tool for businesses and finance professionals.

CoralMetrix Industry Highlights

The April edition also showcases several key initiatives and achievements:

• Gift & Legacy Planning webinar covering wealth transfer and succession strategies.

• Participation in India Family Business Summit 2025.

• Women's Day panel discussion on GST perspectives for women entrepreneurs.

• Successful inauguration of the new CoralMetrix office in Bengaluru.

• Announcement of the upcoming Income Tax Filing FY 2024–25 webinar.

These initiatives reflect CoralMetrix's continued commitment to education, advisory excellence, and industry engagement.

Conclusion

April 2025 marks the beginning of several important compliance changes and regulatory developments. Businesses that proactively prepare for GST requirements, implement new TDS obligations, understand evolving investment regulations, and maintain compliance discipline will be better positioned for sustainable growth and reduced regulatory risk.

Read More

Read the complete newsletter for detailed GST compliance guidance, Section 194T analysis, mutual fund reforms, professional tax updates, and the full FY 2025–26 compliance calendar.