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

Why January Sets the Tone for Q4 Compliance

January marks the beginning of the last quarter (Q4) of India's April-March financial year. While the month may not carry the year-end weight of March, it concentrates several quarterly deadlines — Q3 TDS returns, quarterly GST filings for QRMP taxpayers, and GST reconciliation tasks — that require immediate attention. For foreign-owned companies, January is also the month to take stock of annual compliance completeness before the March year-end rush begins.

This roundup covers every January compliance deadline relevant to companies with foreign direct investment, including exact dates, applicable forms, penalties, and action items for compliance teams.

GST Compliance Deadlines in January

GSTR-1 — 11 January

Monthly filers must submit GSTR-1 (outward supplies statement) for December by 11 January. This is the last monthly GSTR-1 of the calendar year, and any corrections to December invoices must be captured in this filing. For QRMP taxpayers, the optional Invoice Furnishing Facility (IFF) upload for December B2B invoices is due by 13 January.

CMP-08 — 18 January

Composition scheme taxpayers must file CMP-08, the quarterly challan-cum-statement for Q3 (October-December), by 18 January. This return reports the self-assessed tax liability for the quarter and must be accompanied by the corresponding tax payment. Composition taxpayers pay tax at fixed rates — 1% for manufacturers, 5% for restaurants, and 1% for other suppliers — on turnover rather than on individual transactions.

GSTR-3B (Monthly Filers) — 20 January

The summary return and tax payment for December is due by 20 January for monthly filers. December GSTR-3B is particularly important because it is the last return before the annual reconciliation cycle begins. Companies should ensure all ITC claims for the calendar year are properly accounted for, including any reversals required under Rule 42 (common credits for taxable and exempt supplies) and Rule 43 (capital goods).

For foreign subsidiaries, December GSTR-3B often involves significant reverse charge mechanism (RCM) payments. Import of services from the parent company — management consulting, IT support, shared services — triggers GST under RCM, where the Indian subsidiary is liable to pay GST as the recipient. These RCM payments must be disclosed separately in GSTR-3B Table 3.1(d) and the corresponding ITC claimed in Table 4. Failure to discharge RCM liability in the correct period attracts interest at 18% per annum in addition to the late fee.

GSTR-3B (Quarterly Filers — QRMP) — 22/24 January

Quarterly GSTR-3B for Q3 (October-December) is due by 22 January for taxpayers in Group 1 states/UTs (Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, Daman & Diu, Dadra & Nagar Haveli, Puducherry, Andaman & Nicobar Islands, Lakshadweep) and by 24 January for Group 2 states/UTs (all remaining).

PMT-06 (QRMP Tax Payment) — 25 January

QRMP taxpayers who did not file GSTR-3B monthly must pay their estimated tax for the quarter via PMT-06 by 25 January. This payment is based on either 35% of the net cash tax liability of the previous quarter (auto-generated by the system) or the actual liability for the months as calculated by the taxpayer. The payment can be adjusted against the quarterly GSTR-3B filed subsequently.

GSTR-5 and GSTR-5A — 20 January

Non-resident taxable persons must file GSTR-5 for December by 20 January. Online Information Database Access and Retrieval (OIDAR) service providers must file GSTR-5A for December by the same date. Foreign companies providing digital services to Indian consumers without a physical presence in India must pay close attention to these deadlines.

Income Tax and TDS Deadlines in January

TDS Deposit for December — 7 January

All tax deducted at source during December must be deposited using Challan 281 by 7 January. This includes TDS on salaries (Section 192), professional fees (Section 194J), contractor payments (Section 194C), rent (Section 194-I), and payments to non-residents (Section 195). Late deposit triggers interest at 1.5% per month under Section 201(1A).

For payments to non-residents, companies must ensure that the Form 15CA/15CB process is completed before remittance. The withholding tax rate depends on the nature of the payment and applicable DTAA provisions. Companies making royalty, technical service fee, or management fee payments to foreign parent entities should verify treaty rates annually, as India has renegotiated several DTAAs in recent years.

Quarterly TDS Returns (Q3: October-December) — 31 January

Quarterly TDS/TCS returns for Q3 (October-December) are due by 31 January. The three primary forms are:

• Form 24Q: TDS on salary payments — reports all salary disbursements and TDS deductions for Q3, including details of each employee's salary breakup, exemptions claimed, and tax computed
• Form 26Q: TDS on non-salary payments to residents — covers all Section 194 deductions including professional fees (194J), contractor payments (194C), rent (194-I), and interest (194A)
• Form 27Q: TDS on payments to non-residents — covers all Section 195 deductions including royalties, technical service fees, management fees, interest on ECBs, and dividend payments to foreign shareholders

Late filing attracts a fee of INR 200 per day under Section 234E, capped at the total TDS amount. Additionally, Section 271H provides for a penalty of INR 10,000 to INR 1,00,000 for failure to file TDS returns within one year of the due date.

Foreign-owned subsidiaries should pay special attention to Form 27Q accuracy. Common errors include applying incorrect DTAA rates (using the domestic rate instead of the treaty rate, or vice versa), misclassifying the nature of payment (e.g., treating technical service fees as royalty, which may attract different treaty rates), and failing to report transactions where TDS was not deducted because of a lower or nil withholding certificate under Section 197. Each discrepancy can trigger a demand notice from the Centralised Processing Cell (CPC), requiring a revised return and potential interest payments.

TCS Returns (Form 27EQ) — 31 January

Companies collecting tax at source under Section 206C must file Form 27EQ for Q3 by 31 January. This applies to sellers of specified goods (timber, minerals, tendu leaves, alcoholic liquor), liberalized remittance scheme (LRS) transactions exceeding INR 7 lakh, and overseas tour packages.

ROC and MCA Filings in January

Extended AOC-4 / MGT-7 Deadline (FY 2024-25)

For FY 2024-25, the MCA extended the deadline for annual filings to 31 January 2026 without additional fees as part of the MCA-21 V3 transition. Companies that did not file AOC-4 (financial statements) or MGT-7/MGT-7A (annual return) by the earlier 31 December 2025 deadline received this additional window. After 31 January 2026, the standard penalty of INR 100 per day applies.

Foreign-owned companies filing AOC-4 in XBRL format (mandatory for companies with turnover exceeding INR 50 crore or borrowings exceeding INR 25 crore) should note that XBRL conversion tools require reconciliation with Indian Accounting Standards (Ind AS), which may not directly map to the parent company's IFRS or GAAP financials.

MSME-1 (Half-Yearly Return)

Companies that have outstanding payments to micro and small enterprises exceeding 45 days must file MSME-1 for the half-year ending 30 September by 31 January (the form is due within 30 days of the half-year end for the October period, though the MCA has allowed filings through January in recent practice). This filing is relevant for foreign subsidiaries procuring goods or services from Indian MSMEs.

FEMA and RBI Compliance in January

ECB-2 Monthly Return — Within 7 Working Days

Companies with external commercial borrowings must file the ECB-2 return for December through their AD Category I bank within 7 working days of the month end — typically by 10-12 January. This monthly return reports actual ECB transactions and must be filed even if there were no transactions during December (nil return).

FC-GPR Compliance Check

January is an appropriate time for companies that received foreign investment in the previous quarter (October-December) to verify that all FC-GPR filings have been completed within the 30-day window from share allotment. Late FC-GPR filing triggers FEMA compounding proceedings with fees typically ranging from INR 20,000 to INR 5,00,000.

Companies that completed funding rounds or received additional equity from foreign parents in Q3 should also verify that the share capital reported in the FC-GPR matches the actual allotment records maintained by the company. Discrepancies between FC-GPR filings and the company's Register of Members can create issues during future due diligence exercises and complicate the FLA return filing due in July. It is advisable to maintain a tracker of all share allotments and corresponding FC-GPR filings throughout the year to ensure no transaction is missed.

PF, ESI, and Labour Law Deadlines in January

EPF and ESI Contributions — 15 January

Employer contributions for EPF and ESI for December salaries must be deposited by 15 January. The EPF contribution rate is 12% of basic salary plus dearness allowance (both employer and employee share), with the employer's share split between EPF (3.67%) and EPS (8.33%). ESI contribution is 4% of gross salary — 3.25% employer and 0.75% employee — applicable for employees with monthly wages up to INR 21,000.

Late EPF deposit attracts interest at 12% per annum plus damages of 5% to 25% depending on the delay period under Section 14B of the EPF Act. For foreign-owned companies with newly established operations in India, EPF registration is mandatory once the company has 20 or more employees.

Professional Tax (State-Specific)

Professional Tax deadlines for January vary by state. Key deadlines include Maharashtra (monthly by last day of January for PTRC), Karnataka (by 20 January for December), Andhra Pradesh and Telangana (by 10 January for December), and West Bengal (by 21 January for December). Tamil Nadu operates on a half-yearly basis with the next deadline falling on 30 April.

Foreign companies expanding operations across Indian states must obtain separate Professional Tax registrations in each state where they have employees or offices. The tax rates, slabs, and payment frequencies differ significantly — Maharashtra charges a maximum of INR 2,500 per year per employee, while Karnataka caps at INR 2,400. Non-registration and non-payment can attract penalties of 1.5% to 2% per month depending on the state, and may complicate future Shops and Establishment Act renewals.

Compliance Calendar: January at a Glance

The following table consolidates all January deadlines for quick reference:

Practical Tips for Foreign-Owned Companies

Reconcile Q3 TDS Before Filing Returns

Before filing Forms 24Q, 26Q, and 27Q by 31 January, reconcile your TDS deductions with actual payments using the Challan 281 receipts. Mismatches between deductions reported in TDS returns and challans deposited with the government are a common trigger for demand notices. For Form 27Q specifically, verify that DTAA rates applied to non-resident payments are supported by valid Tax Residency Certificates (TRCs) from the payee.

Prepare Form 16A Issuance Schedule

After filing Q3 TDS returns by 31 January, TDS certificates in Form 16A must be issued to deductees by 15 February. This is particularly important for transfer pricing documentation — intercompany payments with TDS require Form 16A as evidence that withholding obligations were met. Set up a workflow to generate and distribute Form 16A immediately after Q3 return filing.

Review QRMP Scheme Eligibility

The QRMP scheme is available to taxpayers with aggregate turnover up to INR 5 crore in the preceding financial year. January is the time to assess whether your company's turnover in the current year has crossed this threshold, requiring a shift to monthly filing from the next quarter. The opt-out window typically opens on the GST portal in January for the upcoming quarter.

Audit Trail Compliance — Companies Act

From FY 2023-24 onwards, every company using accounting software must maintain an audit trail (edit log) that cannot be tampered with. January is a good time to verify that your accounting system generates the required audit trail for the current financial year, particularly if your company operates on a calendar-year reporting cycle aligned with the foreign parent. The annual compliance process will require confirmation of audit trail functionality.

The audit trail requirement under Rule 3(1) of the Companies (Accounts) Rules mandates that accounting software must record every edit, including the date, time, and user who made the change, along with both the original and modified values. Foreign subsidiaries using ERP systems (SAP, Oracle, NetSuite) integrated with the parent company's global instance should verify that the Indian entity's books maintain a separate, tamper-proof audit trail that satisfies MCA requirements. The statutory auditor is required to report on audit trail compliance in their audit report, and qualifications on this point are increasingly common.

Plan Q4 Transfer Pricing Documentation

With Q4 (January-March) being the final quarter of the financial year, foreign subsidiaries should begin compiling transfer pricing documentation. The benchmarking analysis for intercompany transactions — management fees, royalties, cost allocations, intercompany loans — should be updated with current-year data. The formal transfer pricing report (Form 3CEB) is not due until October 31 of the assessment year, but data collection must start now.

Key Takeaways

• January concentrates Q3 quarterly deadlines — TDS returns (31 January) and quarterly GST filings (22/24 January) — alongside monthly GST and TDS obligations.
• The 31 January Q3 TDS return deadline is the most penalty-intensive, with late fees of INR 200/day under Section 234E plus potential penalties of INR 10,000 to INR 1,00,000 under Section 271H.
• QRMP taxpayers face a compressed filing window in January — CMP-08 by 18th, GSTR-3B by 22nd/24th, and PMT-06 by 25th — requiring early preparation.
• Form 16A issuance to deductees is due by 15 February following Q3 return filing — set up the workflow in January.
• Foreign subsidiaries should use January to begin Q4 transfer pricing documentation and verify audit trail compliance in their accounting systems.