India Compliance Roundup: August — Key Deadlines, Filings & Regulatory Updates

Why August Demands Attention from Foreign-Owned Companies

August sits at the intersection of several high-stakes compliance timelines. The ITR filing deadline for non-audit taxpayers falls on July 31 (or the preceding working day), making August the first month where late filing penalties and interest kick in for companies that missed it. For companies requiring audit — which includes virtually every foreign-owned subsidiary with international transactions — August is when tax audit preparation intensifies ahead of the September 30 audit report deadline.

Simultaneously, the first advance tax instalment of FY 2026-27 was due on June 15, and companies that missed or underpaid face interest accrual under Section 234C. The second advance tax instalment is approaching on September 15, requiring companies to refine their income estimates based on actual Q1 performance.

This roundup covers every key August deadline, with specific attention to the compliance obligations that disproportionately affect foreign-owned private limited companies and branch offices in India.

Income Tax: ITR Filing and Audit Season

July 31 (Just Passed): ITR Filing for Non-Audit Cases

The due date for filing income tax returns for individuals and entities not subject to audit was July 31, 2026 (AY 2026-27). Companies that missed this deadline can still file a belated return by December 31, 2026, but face a late filing fee of INR 5,000 under Section 234F (reduced to INR 1,000 if total income does not exceed INR 5 lakh). Interest under Section 234A at 1% per month on unpaid tax also begins accruing from August 1.

August: Tax Audit Preparation in Full Swing

For companies whose accounts require audit — including all companies (regardless of turnover), entities with turnover exceeding INR 1 crore under Section 44AB, and entities with international transactions requiring transfer pricing audit — the tax audit report deadline is September 30, 2026. August is the critical month for:

• Finalising books of accounts for FY 2026-27
• Completing the statutory audit (which must precede the tax audit report)
• Preparing transfer pricing documentation and the Form 3CEB report for companies with international transactions exceeding INR 1 crore
• Compiling tax computation schedules, including MAT (Minimum Alternate Tax) calculation under Section 115JB

For foreign-owned subsidiaries, the transfer pricing documentation is often the bottleneck. Benchmarking studies require access to Indian financial databases (Prowess, CapitalLine), functional analysis of each international transaction, and selection of the most appropriate method — work that typically takes 4-8 weeks.

Key Audit Deadlines Ahead

Missing the September 30 deadline for the tax audit report attracts a penalty of 0.5% of total sales, turnover, or gross receipts, subject to a maximum of INR 1,50,000 under Section 271B. For a foreign subsidiary with INR 10 crore turnover, that is a penalty of INR 5,00,000, capped at INR 1,50,000.

GST Compliance: Monthly Filings and Reconciliation

August 10: GSTR-7 and GSTR-8 for July

GSTR-7 (TDS under GST) and GSTR-8 (TCS under GST for e-commerce operators) for July 2026 are due by August 10. These monthly returns are relatively straightforward but must not be overlooked amid the audit-season workload.

August 11: GSTR-1 for July (Monthly Filers)

The statement of outward supplies for July 2026 must be filed by August 11. For quarterly filers (businesses with turnover up to INR 5 crore who opted for the QRMP scheme), the next quarterly GSTR-1 is due in October for the July-September quarter.

August 13: GSTR-6 (Input Service Distributor)

Input Service Distributors must file GSTR-6 by August 13, distributing input tax credit across branches or units for the month of July.

August 20: GSTR-3B for July (Monthly Filers)

The summary return and tax payment for July 2026 is due by August 20. Companies should use this filing cycle to begin preliminary GST annual reconciliation work, comparing GSTR-3B figures against GSTR-1 and books of accounts. The GSTR-9 annual return (due December 31) requires this reconciliation, and starting early prevents year-end scrambles.

GST Annual Return Preparation

While the GSTR-9 annual return for FY 2026-27 is not due until December 31, 2026, August is the ideal month to begin preparation. Companies with turnover exceeding INR 5 crore must also file GSTR-9C (reconciliation statement, self-certified). The reconciliation requires matching:

• Outward supplies in GSTR-1 vs GSTR-3B vs books
• Input tax credit in GSTR-3B vs GSTR-2B vs books
• Tax paid vs tax liability
• HSN-wise summary of supplies

TDS Compliance: Q1 Returns and Monthly Deposits

August 7: TDS/TCS Deposit for July

TDS deducted and TCS collected during July 2026 must be deposited with the government by August 7. This is a monthly obligation under Section 200(1) read with Rule 30. Late deposit attracts interest at 1.5% per month under Section 201(1A).

July 31 (Just Passed): Q1 TDS Returns

The Q1 TDS returns for April-June 2026 were due on July 31, 2026:

Companies that missed the July 31 deadline face a late filing fee of INR 200 per day under Section 234E, continuing until the return is filed. For foreign-owned companies, Form 27Q covering Section 195 deductions on payments to the parent company is especially critical — errors or delays affect the parent's ability to claim DTAA benefits and foreign tax credits.

August 14: TDS Certificates (Form 16A) for Q1

TDS certificates in Form 16A for Q1 (April-June 2026) must be issued to deductees by August 14. This is generated through the TRACES portal after filing the quarterly TDS return. For payments to non-residents, the Form 16A serves as documentation for the recipient to claim credit in their home country.

FEMA and RBI Compliance

July 15 (Just Passed): FLA Return

The FLA Return — Annual Return on Foreign Liabilities and Assets — was due on July 15, 2026. Companies that filed based on unaudited accounts must file a revised FLA return based on audited accounts by September 30, 2026.

Companies that missed the July 15 deadline face severe penalties: up to three times the sum involved in the contravention, or INR 2,00,000 if the amount is not quantifiable, plus INR 5,000 per day for continuing contravention. The FLA Return is filed on the RBI's FLAIR portal — the web-based system that replaced the earlier Excel-based filing.

August: FEMA Compliance Action Items

With the FLA Return deadline passed, August is the month to address any pending FEMA filings:

• FC-GPR filings: Any share allotments to non-residents during Q1 (April-June) should have FC-GPR filed within 30 days. If delayed, initiate the compounding process
• ECB filings: Monthly ECB-2 returns for any external commercial borrowings must be filed within 7 working days of the end of each month
• Annual Performance Report (APR): For Indian companies with overseas direct investments, the APR must be filed by December 31, but data collection should begin in August

Companies Act (MCA/ROC) Compliance

August-September: AGM Preparation

Under Section 96 of the Companies Act, 2013, every company (except One Person Companies) must hold its Annual General Meeting within six months from the close of the financial year. For companies with a March 31 year-end, the AGM deadline is September 30, 2026.

August is the critical planning month for AGM compliance:

• 21-day notice: AGM notice must be sent to all members at least 21 clear days before the meeting. For a September 30 AGM, the notice must go out by September 8 at the latest
• Financial statements: Audited financial statements must be approved by the board before they can be presented at the AGM
• Director's Report: The board must prepare and approve the Director's Report, including information on related party transactions, CSR activities (if applicable), and corporate governance
• Board meeting: A board meeting to approve the accounts and call the AGM should be held in August

Post-AGM Filing Deadlines

After the AGM, two critical ROC filings follow:

• AOC-4 (Financial Statements): Due within 30 days of AGM — by October 29, 2026 if AGM is held on September 30
• MGT-7 (Annual Return): Due within 60 days of AGM — by November 28, 2026 if AGM is held on September 30

Late filing of these forms attracts a penalty of INR 100 per day per form with no upper cap. For a company that misses both forms by six months, the total penalty reaches INR 36,500 — a significant cost for a compliance task that a professional can complete in a few days.

August 14: DIR-3 KYC Reminder

The annual Director KYC (Form DIR-3 KYC) deadline is September 30 for all directors. August is when companies should remind all directors — especially foreign directors who may not be tracking MCA deadlines — to complete their KYC. Failure to file DIR-3 KYC by September 30 results in deactivation of the Director Identification Number (DIN). Reactivation requires filing the KYC plus paying a penalty of INR 5,000.

For foreign directors, the KYC process requires a valid Digital Signature Certificate (DSC), which may need renewal if it has expired since the last filing.

Professional Tax: State-Level August Obligations

Professional Tax compliance continues monthly across most Indian states. For August, the key deadlines by state are:

• Maharashtra: Monthly PTRC return and payment for July is due by the last day of August. Maharashtra charges INR 200 per month for employees earning above INR 10,000 per month
• Karnataka: Monthly PT payment for July is due by August 20. Karnataka levies INR 200 per month for employees earning above INR 15,000
• West Bengal: Monthly PT return for July is due by August 21
• Gujarat: Monthly PT payment for July is due by August 15
• Telangana: Monthly PT payment for July is due by August 10

For foreign companies with employees spread across multiple states, managing these varied deadlines requires either a dedicated payroll compliance team or an outsourced compliance partner. Each state has its own portal, forms, and penalty structure. Non-compliance with Professional Tax can result in penalties ranging from INR 1,000 to INR 5,000 per day depending on the state, plus interest on the unpaid amount.

Statutory Compliance for New Employees

August and September typically see a wave of new hires in India, coinciding with the post-monsoon business pickup and the campus recruitment cycle. For foreign-owned companies expanding their India teams, each new employee triggers multiple compliance registrations:

• PF registration: New employees must be registered on the EPFO portal within the month of joining, with their Universal Account Number (UAN) generated or transferred
• ESI registration: Employees earning up to INR 21,000 per month must be enrolled in the ESIC system
• Professional Tax: Employee's salary slab determines the PT deduction, which must be reflected in the next return filing
• Form 11 (PF declaration): Every new PF member must submit Form 11 declaring their previous PF membership status

Failure to register employees within the prescribed timelines can result in backdated contribution demands with interest and damages, making timely onboarding compliance essential.

PF, ESI, and Labour Compliance

August 15: PF and ESI Contributions for July

EPF and ESI contributions for July salaries are due by August 15, 2026. The standard EPF contribution is 12% each from employer and employee on basic salary plus dearness allowance. ESI contribution is 3.25% employer and 0.75% employee for employees earning up to INR 21,000 gross per month.

August 25: PF ECR Filing for July

The Electronic Challan cum Return for July must be filed on the EPFO portal by August 25. This return details employee-wise PF contributions and must reconcile with the challan deposited by August 15.

August: Gratuity and Bonus Planning

August is an appropriate time for companies to review gratuity provisioning. Under the Payment of Gratuity Act, 1972, employees completing five years of service are entitled to gratuity at 15 days' wages for each completed year of service. The maximum gratuity payable is INR 25,00,000 (increased from INR 20,00,000 effective March 2024).

For the Payment of Bonus Act, the statutory bonus for employees earning up to INR 21,000 per month is a minimum of 8.33% and maximum of 20% of basic salary. Companies should begin calculating bonus liability for the year, especially if FY 2025-26 results show allocable surplus.

Advance Tax: Second Instalment Approaching

September 15: Second Advance Tax Instalment

The second instalment of advance tax for FY 2026-27 is due on September 15, 2026. By this date, at least 45% of the estimated annual tax liability must be paid (cumulative, including the 15% paid by June 15). Companies should use August to:

• Review Q1 (April-June) actual results against projections
• Update income estimates for FY 2026-27 based on actual performance
• Calculate the advance tax instalment amount to avoid interest under Section 234C

Deferral or shortfall in the second instalment attracts interest at 1% per month on the shortfall amount for three months (the period between the second and third instalment dates). For a foreign subsidiary projecting annual tax of INR 1 crore, a 10% shortfall in the second instalment results in interest of approximately INR 30,000.

August Compliance Checklist for Foreign-Owned Companies

Key Takeaways

• August is tax audit season — foreign-owned subsidiaries with international transactions must finalise transfer pricing documentation and benchmarking studies by August-end to meet the September 30 audit report deadline
• AGM preparation must happen in August — the September 30 deadline for holding the AGM requires board approval of accounts, 21-day notice to members, and preparation of the Director's Report during August
• Remind foreign directors about DIR-3 KYC — missed KYC by September 30 deactivates the DIN, potentially paralysing company filings, and requires INR 5,000 penalty for reactivation
• File the revised FLA Return by September 30 if the initial July 15 filing was based on unaudited accounts — the RBI expects the revised return once audited figures are available
• Begin advance tax calculations for the September 15 instalment — shortfalls attract 1% per month interest, and Q1 actual results provide the data needed for accurate estimates

For comprehensive audit and compliance support covering all August and September deadlines, explore our annual compliance services and tax advisory services for foreign-owned companies in India.