Simplifying your direct tax compliance process
Direct Tax
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Direct Tax
What are the taxation laws and compliances that you will have to be aware of when planning your expansion to India?
Are you subject to withholding tax obligations?
In today’s rapidly evolving and increasingly progressive tax and regulatory environment, managing compliance responsibilities and developing the right tax strategy requires both, experience and foresight.
Expanding your business into India requires understanding a well-defined taxation and regulatory framework. Companies operating in India are subject to direct taxes under the Income Tax Act 1961.
At ICI, our tax experts provide practical insights to help you navigate today’s evolving tax landscape with confidence. By combining deep business understanding with cutting-edge technology, we simplify complexity, ensure compliance, manage risk, and help you create long-term value for your business.
End-to-End Direct Tax Support
To support your day-to-day tax compliances, we provide comprehensive services across advisory, compliance, and litigation support
Key direct tax compliances in India include timely payment of advance tax, deduction and deposit of withholding tax (TDS), and filing of periodic returns such as quarterly TDS returns and annual income tax returns. We help businesses navigate withholding tax by assessing whether it applies to your transactions, identifying the correct rates under the law, and ensuring your cross-border tax obligations are met accurately and on time.
Partnering with ICI for direct tax & Indirect tax compliance allows you to focus on growing your business while we handle your tax obligations. India Company Incorporation (ICI) provides comprehensive support in managing these compliances, from calculating tax liabilities to filing accurate returns and ensuring adherence to all timelines under the Income Tax Act, 1961
FAQs
Companies operating in India are subject to direct taxes under the Income Tax Act 1961.
Domestic companies:
- Regular tax regime: 30% (with deductions/exemptions).
- Optional concessional regime (Sec 115BAA): 22% (no major exemptions).
- New manufacturing companies (Sec 115BAB): 15% (if conditions met).
Foreign companies: 35% for AY 2026–27, subject to applicable surcharge and cess.
India Company Incorporation (ICI) provides tailored advisory on choosing optimal tax- effective entity structure, filing returns, and ensuring full compliance with Indian direct tax laws.
Key direct tax compliances in India include timely payment of advance tax, deduction and deposit of withholding tax (TDS), and filing of periodic returns such as quarterly TDS returns and annual income tax returns.
India Company Incorporation (ICI) provides comprehensive support in managing these compliances, from calculating tax liabilities to filing accurate returns and ensuring adherence to all timelines under the Income Tax Act, 1961
Key direct tax compliances in India include timely payment of advance tax, deduction and deposit of withholding tax (TDS), and filing of periodic returns such as quarterly TDS returns and annual income tax returns.
India Company Incorporation (ICI) provides comprehensive support in managing these compliances, from calculating tax liabilities to filing accurate returns and ensuring adherence to all timelines under the Income Tax Act, 1961
Withholding tax is applicable on certain cross-border transactions such as dividend payments, royalty payments, and fees for technical services etc to the overseas parent company. The rate of the withholding tax implication is based on the tax rate defined under the Income Tax Act 1961; however, the final rate may be reduced if the non-resident is eligible for relief under a Double Taxation Avoidance Agreement (DTAA).
India Company Incorporation (ICI) helps businesses evaluate the applicability of withholding tax, determine the correct rates under law, and ensure timely compliance with cross-border tax obligations.
Advance tax is the payment of income tax in instalments during the financial year, rather than as a lump sum at the end of the year. In India, any assessee whose estimated tax liability for the year exceeds ₹10,000 is required to pay advance tax under the Income Tax Act 1961. India Company Incorporation (ICI) assists businesses in estimating their advance tax liability, planning instalment payments, and ensuring compliance with the Income Tax Act, 1961, helping avoid interest or penalties for late payments
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Expert Tax Consultancy Services in India for Foreign Businesses
India replaced its governing direct tax statute on 1 April 2026. Legislators held rates steady while rewriting the drafting, the forms, and the compliance vocabulary. Our consultants deliver tax consultancy services in India as one team covering advisory, filings, and representation through that shift.
We work with small and medium enterprises (SMEs) and multinational corporations setting up an Indian entity for the first time. Our advisors assess your exposure, structure the entity, and manage every filing that follows. India Company Incorporation acts as your single point of contact rather than three separate firms.
What Do Our Tax Consultancy Services in India Cover for Your Business?
We begin every engagement for company registration services in India from your commercial plan, not from a fixed service menu. Some clients need a full compliance function from the first day of operations. Others need advice on a single cross-border payment. We scope tax consultancy services in India to match either need.
Income Tax Advisory India
As your income tax consultant in India, we read the direct tax framework against how your business actually operates. We prepare and file corporate returns, plan your position around commercial objectives, and advise on the deductions and incentives your entity qualifies for.
Our specialists apply income tax advisory in India across routine filing periods and one-off transactions alike. Where an incentive applies to your operations, we document the basis for claiming it.
With holding Tax Advisory
Your entity will often deduct withholding tax on payments to the overseas parent. Dividends, royalties, interest, and fees for technical services are the usual triggers.
We assess whether the deduction applies, identify the correct rate, and check relief under a Double Taxation Avoidance Agreement (DTAA). A DTAA means a treaty between two countries that stops the same income being taxed twice, which can lower your rate at source. Our specialists then handle the deduction, the deposit, and the quarterly statement.
Transfer Pricing Support
You must price intercompany transactions at arm’s length, meaning as two unrelated parties would. We build the transfer pricing policy, prepare the documentation, and defend the position during audit.
Our advisors also review whether your India activity creates a Permanent Establishment (PE) for the foreign parent. A PE means a taxable presence in India, and it can pull parent-company profits into the Indian tax net. Most groups discover that exposure late, so our international tax advisory team handles it alongside treaty positions.
Tax Structuring Advisory
You set your tax cost for years when you pick the entity structure. We compare a wholly owned subsidiary against a branch office, liaison office, or project office on exposure and repatriation.
Our advisors cover sector-specific Foreign Direct Investment (FDI) conditions and Reserve Bank of India requirements in the same review. We look at capital structure and compliance under the Foreign Exchange Management Act (FEMA) alongside them. For Goods and Services Tax questions, our indirect tax team runs a separate workstream.
Dispute Resolution Support
You must answer a notice from the tax department with documentation, not a holding response. We handle faceless assessments, which the department conducts without any in-person hearing, along with appellate proceedings. We also represent you through an Advance Pricing Agreement or Mutual Agreement Procedure, which settle pricing disputes before litigation. Our specialists draft each submission and carry the matter through to closure.
Direct Tax Services in India for Foreign Companies
You pay a rate set by where you incorporate the company and which regime you elect. We begin our direct tax services in India by confirming which line below applies to your entity.
Corporate Tax Rates
Company type | Base rate | Surcharge | Cess |
Domestic company, turnover up to Rs. 400 crore in financial year 2023-24 | 25% | 7% above Rs. 1 crore, 12% above Rs. 10 crore | 4% |
Any other domestic company | 30% | 7% above Rs. 1 crore, 12% above Rs. 10 crore | 4% |
Domestic company electing Section 115BAA | 22% | Flat 10% | 4% |
New manufacturing company electing Section 115BAB | 15% | Flat 10% | 4% |
Foreign company | 35% | 2% above Rs. 1 crore, 5% above Rs. 10 crore | 4% |
Source: Income Tax Department, incometaxindia.gov.in. Rates shown for assessment year 2026-27. One crore equals ten million rupees.
Surcharge and Cess Rules
You pay Health and Education Cess at 4% on tax plus surcharge in every case above. Companies also face Minimum Alternate Tax (MAT), a floor of 15% of book profit, meaning accounting profit before tax adjustments.
Companies electing the 22% or 15% concessional regimes stay outside MAT altogether. A unit in an International Financial Services Centre earning solely in convertible foreign exchange pays MAT at 9% instead. You must make those elections by the return due date and cannot reverse them afterwards, so we model both positions before you commit.
What the Income-tax Act, 2025 Means for Tax Consultancy Services in India?
Parliament replaced the statute governing your corporate filings this year, and the change reaches every return. Legislators held rates and policy steady while moving the framework around them.
What Changed in 2026
The Income-tax Act, 2025 came into force on 1 April 2026 and replaced the Income-tax Act, 1961. The Central Board of Direct Taxes (CBDT) notified the Income-tax Rules, 2026 on 20 March 2026, together with a redesigned set of forms. Lawmakers changed drafting, structure, and form numbering, while leaving tax policy alone.
The New Tax Year
Under the new Act, the paired “previous year” and “assessment year” language is gone. You now work to a single tax year running from 1 April, followed by the succeeding financial year. Your assessment cycle works exactly as it did before.
Transition Period Rules
You are working across two periods at once. Income earned in financial year 2025-26 remains under the 1961 Act, and the department assesses it in assessment year 2026-27. Anything earned from 1 April 2026 onwards falls under the 2025 Act.
Impact on Finance Teams
Your finance team must review return forms, statement numbering, and internal compliance calendars. Groups still working from 1961 Act references risk filing on a superseded form. We map your existing schedule against the new framework before your next due date.
Direct Tax Compliance Calendar for Companies Operating in India
You must pay advance tax where your estimated liability for the year reaches Rs. 10,000 or more. Companies pay across four instalments, and the department charges interest on any shortfall.
Instalment | Due date | Cumulative amount payable |
First | On or before 15 June | Not less than 15% of advance tax |
Second | On or before 15 September | Not less than 45%, reduced by the earlier instalment |
Third | On or before 15 December | Not less than 75%, reduced by earlier instalments |
Fourth | On or before 15 March | 100%, reduced by earlier instalments |
Source: Income Tax Department, incometaxindia.gov.in.
Beyond advance tax, your entity files quarterly withholding statements and an annual return. Groups with international transactions carry an additional transfer pricing report. We cover every one of those dates as part of tax consultancy services in India. We track them against your entity and confirm each position with you in writing.
How Our Income Tax Consultant in India Works with You?
We deliver tax consultancy services in India in a fixed sequence, and each stage produces something you can act on. We never move forward on an assumption we have not tested. You meet our advisors in person, at our offices or at your premises.
Initial Tax Position Review
We start by reviewing your operations, financial records, and filing history. This first visit establishes where you stand today and surfaces any open exposure. You receive a written summary of the gaps and the priorities we would address first.
Strategic Tax Planning
Our advisors then test your structure against your commercial plan. We examine entity form, capital structure, intercompany pricing, and the incentives your operations qualify for. Where a concessional regime suits you, we model the outcome ahead of the election deadline.
Filings and Compliance Management
We prepare and submit corporate returns, withholding statements, and the supporting documentation behind them. Our specialists maintain correspondence with the tax authorities and keep your records ready for audit. You receive confirmation at every filing.
Continuous Monitoring and Updates
Legislators and the department update direct tax rules through the annual Finance Act and circulars. We track those changes against your position and tell you when one affects your entity. Our advisors recalibrate before the deadline rather than after it.
Audit and Dispute Support
When an assessment opens, we assemble the documentation and draft the response. Our specialists represent you through the proceeding and, where the matter warrants it, into appeal.
Why Choose India Company Incorporation for Tax Consultancy Services in India?
Choosing a tax consultant in India is a decision about accountability. Foreign businesses appoint us because they want one end-to-end relationship covering the whole India mandate.
Direct Tax Advisory Services
Most India tax practices build their work around domestic clients. We shape our direct tax advisory services around what a foreign parent actually asks: repatriation, treaty relief, PE exposure, and group reporting. We explain the Indian position in terms your head office can act on.
PAN India Presence
Our offices span PAN India, meaning every major business region in the country, so our advisors file wherever your operations sit. You keep the same single point of contact throughout the relationship. We never hand your work between unrelated firms.
Sector-Specific Tax Advisory
We see different incentives and exposures across manufacturing, information technology services, logistics, and healthcare. Our advisors work to your sector rather than to a template, and they say plainly where an incentive does not apply.
Global Reach
We operate across 9+ international markets on several continents while delivering the work inside India. Your group receives one reporting standard and a team that files locally.
Compliance Under One Roof
Beyond direct tax, our specialists handle corporate secretarial compliance, accounting, and payroll. You remove the coordination burden from your finance team by keeping those functions inside one relationship.
Related Services from India Company Incorporation
Indirect Tax Services In India
Foreign Portfolio Investment Services
Frequently Asked Questions About Tax Consultancy Services in India
1. What is included in your tax consultancy services in India?
Our tax consultancy services in India cover advisory, compliance, and representation across the direct tax lifecycle. That includes corporate return filing, withholding tax management, transfer pricing documentation, structuring advice, and support during assessments. We confirm scope in writing before work begins.
2. Which direct tax rates apply to a foreign company operating in India?
You pay a base rate of 35% on a foreign company for assessment year 2026-27. Surcharge applies at 2% where net income exceeds Rs. 1 crore, and 5% above Rs. 10 crore. Health and Education Cess of 4% applies on top of that. A Double Taxation Avoidance Agreement may reduce the rate on specific income streams, so check your treaty first.
3. Do foreign businesses need an income tax consultant in India, or can the parent company handle filings directly?
The Indian entity must make its own filings under Indian law, using Indian forms and identifiers. Most foreign parents appoint a local adviser because assessment correspondence, withholding obligations, and transfer pricing documentation all run on Indian timelines. We act as that adviser and report back to your head office.
4. What determines the cost of tax consultancy services in India for a foreign-owned entity?
You pay for tax consultancy services in India based on the number of entities and the volume of transactions. Scope changes the figure too, since advisory-only support differs from ongoing compliance management. Groups with international transactions carry additional transfer pricing work. We confirm scope and fees in writing after the initial review, so nothing stays open-ended.
5. Which direct tax filings must a company in India complete each year?
A company pays advance tax in four instalments, files quarterly withholding statements, and submits an annual corporate return. Companies subject to audit file the audit report separately. Groups with international transactions add a transfer pricing report. You attract interest by missing any one of these, so we track them together rather than in isolation.
6. Is withholding tax applicable on payments made to our overseas parent company?
You will commonly deduct withholding tax on dividends, royalties, interest, and fees for technical services paid to a non-resident. Your recipient may qualify for relief under a Double Taxation Avoidance Agreement, which lowers the statutory rate. We evaluate eligibility, apply the correct rate, and file the statement on time.
7. How does the Income-tax Act, 2025 affect our existing India tax compliance?
The 2025 Act governs income earned from 1 April 2026 onwards, while financial year 2025-26 income stays under the 1961 Act. Rates and policy are unchanged, but forms, section references, and terminology have moved. We review your compliance calendar and filing templates, since internal documents citing 1961 sections will not match current forms.
8. How do we engage a tax consultant in India through India Company Incorporation?
Send an enquiry with a short description of your India operations, and we will arrange a consultation. Meetings take place at our offices or at your premises. After reviewing your records, we issue a written scope covering the work, the timelines, and the team assigned to you.
