Revisiting the Role of Company Secretaries in India’s 2025 Compliance Ecosystem

Posted by Written by Yanyan Shang Reading Time: 5 minutes

India’s Income-Tax Bill 2025 has brought renewed attention to the role of company secretaries (CSs) within the country’s tax compliance framework, following their exclusion from the definition of “accountant.” This move has raised concerns amid rising compliance demands, a shortage of chartered accountants (CAs), and the evolving needs of micro, small, and medium enterprises (MSMEs).

India Briefing explores the legal, professional, and policy implications of this decision while also reviewing international regulatory approaches for comparative insight.

India’s Income-Tax Bill 2025, introduced in the lower house of the Parliament on February 13, 2025, excludes company secretaries (CSs) from the definition of “accountant,” sparking debate over their role in tax compliance. As businesses face rising regulatory demands and a shortage of chartered accountants (CAs), expanding recognition of CSs could strengthen governance, reduce costs for MSMEs, and align India with global best practices.

India’s corporate compliance ecosystem is undergoing critical evolution as the Income-Tax Bill 2025 introduces structural changes with wide-reaching implications. A key point of contention is the bill’s exclusion of CSs from the definition of an “accountant” under Section 515(3)(b).

This exclusion has raised concerns among industry stakeholders and educational institutions, such as the ICSI, which has actively advocated for the inclusion of CSs through multiple representations to the Income-Tax Bill Review Committee. In response, India initiated a study in March 2025 to assess the merits of recognizing CSs as qualified accountants within the tax framework.

At the heart of this discussion lies a broader question about how to structure India’s compliance framework amid rising demands for transparency and efficiency. India Brieding re-evaluating the potential of allied professionals like CSs to help bridge India’s compliance gap is both timely and necessary.

READ HERE: India’s New Income Tax Bill 2025: An Overview

CAs vs CSs: Professional roles in corporate compliance

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CAs and CSs are two prominent pillars in India’s financial and regulatory framework. While their domains often intersect in practice, their core responsibilities and professional training reflect distinct areas of expertise.

CAs in India primarily focus on the financial dimensions of business operations. Their responsibilities include maintaining financial accuracy, conducting statutory audits, preparing tax filings, managing financial reporting, and offering advisory services related to mergers, acquisitions, and risk management. With their expert knowledge of accounting standards and tax laws of the country, CAs play a central role in ensuring financial transparency and statutory compliance.

In contrast, CSs specialize in corporate law and governance, acting as compliance officers responsible for ensuring businesses adhere to statutory obligations under the Securities and Exchange Board of India (SEBI), the Companies Act, 2013, and other related legislation.

The two professions are governed by dedicated statutory bodies—CAs are regulated by the Institute of Chartered Accountants of India (ICAI), while CSs are governed by the Institute of Company Secretaries of India (ICSI). These institutions set educational and ethical standards, as well as ensure continued professional development and regulatory oversight.

In terms of career prospects, both CAs and CSs enjoy broad opportunities across corporate, public sector, and consultancy roles. Average salary ranges for both professionals start around INR 500,000–700,000 (US$5,840–US$8,176) per annum for entry-level roles and can exceed INR 3 million (US$35,042) in senior positions such as Chief Financial Officer (CFO), Compliance Head, or Corporate Governance Advisor, depending on experience and specialization.

By working together within their defined scopes, CAs and CSs contribute to a comprehensive and balanced corporate compliance ecosystem in India.

Existing legal recognition of CSs in Indian tax and corporate law

Despite being excluded from the definition of “accountant” in the proposed Income-Tax Bill 2025, CSs have long held recognized roles under several existing tax and corporate laws in India.

Under the Income Tax Act, 1961, CSs are acknowledged as authorized representatives in tax matters through Section 288(2). This legal provision empowers them to represent taxpayers before tax authorities, affirming their competence in taxation-related issues. Additionally, Rule 12A of the Income Tax Rules, 1962, allows CSs to verify and certify certain tax returns, further reinforcing their involvement in tax compliance functions.

In terms of professional qualifications, the Final Examination of the ICSI is explicitly recognized as a qualifying examination under Section 288(2) of the Income Tax Act for tax representation. Similarly, the Government Diploma in Company Secretaryship, awarded by the Department of Company Affairs, under the Ministry of Corporate Affairs (MCA), is also recognized for accountancy-related purposes.

However, limitations remain. Under Rule 6G and Section 44AB of the Income Tax Rules, 1962, only CAs are permitted to conduct tax audits and issue audit certificates. This exclusion restricts CSs from performing audit-related functions despite their expertise in taxation and corporate reporting.

Notably, both the Direct Tax Code (DTC) Bills of 2010 and 2013 included CSs within the definition of an “Accountant,” highlighting earlier legislative recognition of their role in taxation.

Together, these legal references indicate that CSs already operate within the country’s taxation ecosystem in meaningful ways—and point to the potential for expanded recognition under future tax legislation.

The case for recognizing CSs as accountants

In light of India’s growing demand for professional tax and compliance support, one of the most pressing concerns is the talent gap in the country’s compliance ecosystem: as of 2023, India’s 68 million taxpayers depend on just 125,000 practicing CAs, according to a market report. This imbalance creates bottlenecks in tax filing, delays in assessments, and limits access to affordable professional services.

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CS professionals receive multidisciplinary education covering taxation, corporate law, governance, financial management, and regulatory compliance. This multidisciplinary background equips CSs to contribute meaningfully to India’s tax administration and compliance landscape.

The case for inclusion is particularly strong when viewed from the perspective of MSMEs and startups, which often face steep compliance costs and rely on competitively priced services. Allowing CSs to operate as recognized accountants would broaden the service provider base, reduce costs, and enhance accessibility for this critical sector of the economy.

Moreover, CSs bring corporate governance expertise that complements the financial proficiency of CAs. 

Addressing counterarguments and global best practices

Critics of expanding the definition of “accountant” to include CSs often raise concerns about professional overlap and dilution of standards. However, these concerns can be addressed by clearly defining role boundaries. The aim is not to replace CAs, but to allow CSs to complement them within their areas of expertise—namely corporate law, regulatory compliance, and tax representation.

Several global jurisdictions have already adopted inclusive approaches that offer useful models for India:

  • In the United States, the Internal Revenue Service (IRS) recognizes a range of professionals—including enrolled agents, certified public accountants (CPAs), and tax attorneys—as authorized tax practitioners. This multi-professional structure increases capacity and encourages specialization within defined scopes of practice.
  • The United Kingdom’s HM Revenue and Customs (HMRC) also permits a variety of professionals to act as tax agents and compliance advisors, reflecting the evolving complexity of modern tax systems.
  • In Australia, the Tax Practitioners Board (TPB) recognizes tax agents from diverse backgrounds, including lawyers and certified professionals beyond traditional chartered accountants. This approach emphasizes competency over title, expanding access while maintaining standards.

India has an opportunity to modernize its regulatory model by integrating complementary skill sets, fostering a more collaborative and efficient compliance environment. This inclusive approach would alleviate capacity constraints, align with international best practices, and expand access to high-quality services—particularly for MSMEs.

Key takeaway

Recognizing CSs as accountants would facilitate the creation of a multi-disciplinary compliance ecosystem, where professionals with different but complementary skill sets collaborate to ensure more robust, transparent, and efficient regulatory oversight. This shift could enhance the overall quality of tax compliance and corporate governance in India—aligning with the country’s broader goals of improving the ease of doing business and fostering economic resilience.

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