MM TAX CLUB

In a significant step towards strengthening India’s cooperative banking ecosystem, the Reserve Bank of India (RBI), in consultation with the Government of India, has announced a series of reforms aimed at improving financial health, governance, digital inclusion, and credit flow to cooperative institutions.

Priority Sector Boost for Cooperative Societies

One of the key announcements is that loans sanctioned by banks to the National Cooperative Development Corporation (NCDC) on or after January 19, 2026, for on-lending to cooperative societies, will now qualify as Priority Sector Lending (PSL) under the respective categories.

This benefit applies to banks other than:

• Regional Rural Banks (RRBs)

• Urban Cooperative Banks (UCBs)

• Small Finance Banks

• Local Area Banks

The loans must be aligned with activities specified in the Master Direction on Priority Sector Lending, 2025.

Role of NCDC in Strengthening Cooperatives

The National Cooperative Development Corporation (NCDC) is a statutory body under the Ministry of Cooperation, playing a crucial role in financing cooperatives and accelerating the growth of the cooperative movement across India. The revised PSL norms are expected to significantly enhance the flow of institutional credit to cooperative societies through NCDC.

Key Measures Announced for Cooperative Banks

The Government of India and RBI have jointly undertaken several reforms to strengthen cooperative banks. These include:

• Urban Cooperative Banks (UCBs) allowed to open new branches

• Housing loan limits for UCBs increased from 10% to 25% of total loans and advances

• Amendment to the Banking Regulation Act, increasing directors’ tenure from 8 years to 10 years

• Reduced licensing fees for onboarding cooperative banks to the Aadhaar Enabled Payment System (AePS)

• Establishment of NUCFDC (National Urban Co-operative Finance and Development Corporation Ltd.), an NBFC acting as an umbrella organisation for UCBs to provide IT infrastructure and operational support

• Creation of a Shared Services Entity (SSE) – ‘Sahakar Sarthi’ to deliver technological services to Rural Cooperative Banks

• Inclusion of Rural Cooperative Banks under RBI’s Integrated Ombudsman Scheme

• Deposit Insurance Coverage by DICGC up to ₹5 lakh per depositor per bank, including principal and interest, for all cooperative banks

  Why This Matters

  These reforms aim to:

• Improve governance and operational efficiency

• Enhance digital adoption and customer protection

• This information was shared by Shri Pankaj Chaudhary, Minister of State in the Ministry of Finance, in the Rajya Sabha

• Increase credit availability to grassroots cooperative institutions

• Strengthen depositor confidence in cooperative banks

In an important step towards participative law-making, the Central Board of Direct Taxes (CBDT) has invited inputs and suggestions from stakeholders on the proposed Income-tax Rules and Forms framed under the Income-tax Act, 2025.

The Income-tax Act, 2025 received the assent of the President in August 2025 and is scheduled to come into force from 1st April 2026. Before finalising the supporting Rules and Forms, CBDT has opened the door for public consultation to ensure clarity, simplicity, and reduced compliance burden.

What is this consultation about?

As part of a wider consultative process, CBDT has uploaded the proposed Income-tax Rules and related Forms on its official website. These drafts have been prepared after broad-based discussions and are aligned with the provisions of the new Income-tax Act, 2025.

Now, taxpayers, professionals, and other stakeholders are encouraged to review these drafts and share their suggestions before the Rules and Forms are formally notified.

Four key areas where inputs are invited

CBDT is specifically seeking suggestions under the following four categories:

1. Simplification of Language
   To make tax provisions easier to understand for taxpayers and professionals.

2. Reduction of Litigation
   Suggestions that can help avoid ambiguity and future disputes.

3. Reduction of Compliance Burden
   Ideas to simplify procedures, forms, and reporting requirements.

4. Identification of Redundant or Obsolete Rules & Forms
   Removal of provisions that are no longer relevant or useful.

How to submit suggestions?

To make the process smooth and accessible, CBDT has launched a dedicated utility on the Income-tax e-filing portal.

• The facility is live from 04.02.2026

• Accessible to all stakeholders

• Requires basic details such as name and mobile number

• Submission is completed through OTP-based validation

While submitting suggestions, stakeholders must clearly mention:

• The relevant rule, sub-rule, or Form number

• The specific category (out of the four mentioned above) to which the suggestion relates

Why this matters

This initiative reflects CBDT’s intent to build a simpler, more transparent, and taxpayer-friendly income-tax framework. Inputs from practitioners and taxpayers can play a crucial role in shaping practical and effective Rules before they become law.

For tax professionals, this is also an opportunity to flag real-world issues faced during compliance and reporting.

The GST Portal has rolled out an important update to simplify compliance and improve user experience. As per the latest change, the “Additional Notices & Orders” tab has now been merged with the existing “Notices and Orders” tab on the GST Portal.

What Has Changed?

Earlier, taxpayers had to check two separate tabs—

• Notices and Orders

• Additional Notices & Orders

This often caused confusion and increased the risk of missing important communications from the GST department.

With the new update:

• All GST notices, orders, and related communications will now be available under a single tab – “Notices and Orders”.

• The separate “Additional Notices & Orders” tab has been removed.

Why This Update Matters

This change is aimed at making GST compliance more streamlined and transparent. Here’s how it helps taxpayers:

• ✅ Single access point for all notices and orders

• ✅ Reduced chances of missing critical GST communications

• ✅ Better tracking and faster response to GST notices

• ✅ User-friendly navigation on the GST Portal

What Taxpayers Should Do Now

• Regularly check the “Notices and Orders” tab on the GST Portal.

• Do not rely on the old “Additional Notices & Orders” section, as it no longer exists.

• Ensure timely action and replies to any notice or order to avoid penalties or further proceedings.

Final Thoughts

This GST Portal update is a positive step toward simplifying digital compliance for taxpayers, professionals, and businesses. Staying updated with such changes is crucial to avoid unnecessary notices, interest, or penalties.

 Tip: Make it a habit to review the “Notices and Orders” tab frequently, especially during return filing and assessment periods

In a major step towards protecting consumers in the digital payments ecosystem, the Reserve Bank of India (RBI) is planning a compensation framework for victims of small digital frauds. This move is expected to bring much-needed relief to individuals who fall prey to online scams and unauthorized transactions.

Compensation for Digital Fraud Victims

As per the proposed plan:

• Victims of small digital frauds may receive compensation of up to ₹25,000 or 85% of the loss, whichever is lower.

• This compensation will be provided as a one-time benefit.

• For first-time fraud victims, RBI plans to ensure 70% of the loss is compensated, while the remaining burden will be shared between banks and customers.

This initiative aims to build trust in digital transactions and reduce the financial stress faced by ordinary users after fraud incidents.

Tighter Rules on Mis-selling and Loan Recovery

Along with fraud compensation, RBI is also taking steps to strengthen consumer protection:

• Stricter norms on mis-selling of financial products.

• Improved guidelines on loan recovery practices, to prevent harassment and unfair treatment of borrowers.

• RBI will soon release draft guidelines for public consultation, allowing stakeholders and consumers to share feedback before final implementation.

Why This Matters

With the rapid growth of digital payments, fraud cases have also increased. RBI’s proposed measures signal a strong intent to:

• Enhance customer confidence in digital banking.

• Ensure accountability of banks and financial institutions.

• Promote fair and transparent practices in lending and recovery.

   What Should Customers Do?

• Always report digital frauds immediately to your bank and on the cybercrime portal.

• Stay alert against phishing, fake calls, and suspicious links.

• This proposal marks a positive shift towards a safer and more customer-friendly digital financial system in India.

• Follow RBI updates closely once the draft guidelines are released.