MCA to introduce web-based filing to improve compliance and oversight

The Indian government is introducing new web-based forms for firms filing annual returns and financial statements, with enhanced security features and authentication requirements aimed at deterring the creation of tax-dodging shell companies. The move comes as the government steps up security and know-your-customer requirements to prevent financial irregularities such as tax evasion, fund diversion, and money laundering. The new reporting system will offer tech-enabled real-time oversight of statutory filings, with data verified in real-time to enhance compliance. Around 40 more statutory forms will be rolled out in the new format under version three of the MCA21 portal, with annual returns to be migrated to the new system in the coming filing season. Despite initial issues, form filings on the MCA21 portal were robust in FY22, with around 2.8 million forms filed, compared to 2.65 million forms in the previous year. The transition to the new reporting regime for corporations is expected to be completed in the coming months, with a focus on seamless migration to the new system.