Direct Tax
Section 80-IAC – Start-up India – Supersession of Notification dated 19 November 2025
Notification No. G.S.R. 108(E) [F. NO. P-38015/19/2025-Startup India] Dated - 04 February 2026
Section 80-IAC of the Act provides a tax deduction to eligible Startups in respect of profits derived from specified business, subject to prescribed conditions and certification. The Central Government has issued a fresh notification u/s 80-IAC of the Act, replacing Notification No. G.S.R. 127(E) dated 19-02-2019, prescribing the criteria for recognition of Startups and Deep Tech Startups.
This notification expands the definition and eligibility criteria for startups and a significant highlight is the separate recognition of Deep Tech Startups as they generally face long gestation periods and high R&D costs, along with uncertain commercialization timelines. To accommodate these realistic issues, the eligibility period and turnover cap are set on the higher side for Deep Tech startups as compared to regular startups. Further, this newly created framework introduces restrictions on speculative investments and reinforces stricter requirements for Startups to allocate funds to core innovation and further scaling activities, rather than diverting resources into real estate, luxury assets, or securities.
| Description | 2019 Notification (G.S.R. 127(E)) | 2026 Notification (G.S.R. 108(E)) |
|---|---|---|
| Eligibility period | 10 years from incorporation | 10 years (Startups); 20 years (Deep Tech Startups) |
| Turnover limit | Private limited compa-nies, LLPs, partnerships | INR 2 billion (Startups); INR 3 billion (Deep Tech Startups) |
| Entity types covered | Not separately recognized | Expanded to include cooperative societies and multi state cooperatives |
| Deep-tech recognition | Not separately recognized | Explicit recognition with extended timelines and turnover limits |
| Fund deployment restrictions | Not detailed | Explicit restrictions on speculative/luxury investments |
India–France DTAC – Amending Protocol Signed
Press Release Dated - 23 February 2026
The Governments of India and France have signed a Protocol amending the India - France Double Taxation Avoidance Convention dated 29-09-1992.
The Press Release highlights that the Amending Protocol proposes to provide:
- The Protocol grants full taxing rights on capital gains arising from the sale of shares to the country where the company is resident and removes the Most-Favored-Nation (MFN) Clause from the treaty.
- Withholding tax rates on dividend income changed from the present rate of 10% to 5% for holdings of at least 10%) and 15% in other cases.
- Fees for Technical Services (FTS) definition amended to align with India-US DTAA, and the Scope of PE expanded by inclusion of the Service permanent establishment (PE) clause.
- Amendment to the Exchange of Information (EOI) provision and addition of a new Article on Assistance in Collection of Taxes.
- Incorporation of applicable provisions of the Base Erosion and Profit Shifting Multilateral Instrument (BEPS MLI) in the DTAA that had already become applicable pursuant to MLI ratification.
The Amending Protocol will be effective upon completion of the internal procedures under the laws of both the countries, subject to the terms agreed between the two countries.
Indirect Tax
Customs
Anti dumping Duty levy extended on import of “Toluene Di-Isocyanate (TDI) having isomer content in the ratio of 80:20” from the EU and Saudi Arabia
Notification No. 03/2026-Cus (ADD) Dated 10 February 2026
The Government has extended the levy of Anti-dumping duty on import of “Toluene Di Isocyanate (TDI) having isomer content in the ratio of 80:20” from EU and Saudi Arabia. The duty has been imposed at producer specific rates, ranging from USD 102.05/MT to USD 344.33/MT. The levy applies only to the 80:20 isomer grade of TDI, with other grades remaining outside the scope, and would remain valid for 5 years.
Foreign Trade Policy
DGFT introduces real-time bank validation for IEC applications through NPCI integration
Trade Notice No. 23/2025-26 Dated 6 February 2026
The Directorate General of Foreign Trade (DGFT) has integrated IEC workflows with the National Payments Corporation of India (NCPI) to enable real-time bank account validation. This update has been introduced to improve the accuracy and authenticity of applicant information. Under the new system, bank account details provided in the IEC application will be digitally verified with banking records. Applicants must ensure that their PAN-linked bank account details exactly match the records maintained by the bank. Any mismatch in the information may lead to delays, deficiencies, or rejection of IEC applications or modification requests.
DGFT introduces TRACE, INSIGHT, FLOW, and LIFT initiatives to strengthen the MSME export ecosystem
Trade Notice Nos. 26 to 29/2025-26 Dated 20 February 2026
The DGFT has introduced a set of initiatives, viz. TRACE, INSIGHT, FLOW, and LIFT, to strengthen the export ecosystem for MSMEs.
TRACE has been introduced to support MSMEs in meeting international technical, quality, safety, and regulatory standards by providing partial reimbursement for testing, inspection, certification, audits, and conformity assessments required for exports.
INSIGHT aims to enhance exporters’ access to trade intelligence, regulatory updates, and market facilitation support, enabling more informed, data-driven decision-making in global markets.
FLOW focuses on assisting MSMEs with overseas warehousing, logistics, and fulfilment support to help them build efficient global distribution networks and improve export competitiveness.
In addition, the LIFT scheme provides partial reimbursement of freight and inland transportation costs for MSMEs located in specified states, with support capped at 30% of eligible freight expenditure and a maximum annual limit of INR 2 Million per IEC.
These initiatives are being implemented on a pilot basis with operational guidelines open for stakeholder consultation. The approach aims to gather feedback from exporters and refine the schemes before wider implementation.
DGFT restricts RoDTEP benefits with immediate effect and extends the deadline for Annual Return filing
Notification No. 60/2025-26 Dated 23 February 2026, r/w Corrigendum Dated 24 February 2026, and Public Notice No. 46/2025-26 Dated 5 February 2026
The DGFT has, with immediate effect, restricted the benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme to 50% of the notified rates and value caps for export products, except those falling in ITC (HS) Chapters 1 to 24.
In addition, the Annual RoDTEP Return filing deadline for FY 2023–24 has been extended to 31 March 2026 (from 30 November 2025), subject to payment of a composition fee of INR 15,000/-