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

Why June Sets the Tone for the Entire Financial Year

June is when the new financial year's compliance machinery shifts into full gear. While April and May involve settling the previous year's residual filings, June brings the first major forward-looking obligation: the first installment of advance tax. For employers, it is the deadline for issuing Form 16 TDS certificates to employees. For companies that have accepted deposits, the DPT-3 return must be filed with the MCA. And for import-export businesses, the IEC annual update window closes on June 30, with deactivation as the consequence for non-compliance.

Foreign-owned companies face additional complexity in June. The advance tax estimation requires forecasting the Indian subsidiary's full-year profit — a task complicated by transfer pricing adjustments, inter-company charges, and currency fluctuations. The Form 16 obligation requires reconciling salary TDS with actual deductions across multiple employees, including expatriate staff on secondment. This roundup maps every critical June 2026 deadline with specific attention to obligations affecting foreign-invested companies.

June 7: TDS/TCS Deposit for May 2026

All tax deducted at source and tax collected at source during May 2026 must be deposited with the government by June 7. This covers deductions under all sections — salary (Section 192), contractor payments (Section 194C), professional fees (Section 194J), rent (Section 194I), and payments to non-residents under Section 195.

Foreign Company Considerations

For cross-border payments to the parent entity — management fees, royalties, technical service fees — the withholding tax rate depends on the applicable DTAA. The domestic rate under Section 195 is 20% for most categories, but treaty rates can reduce this to 10-15%. Ensure Form 15CA/15CB is filed before each remittance — failing to file these forms can result in the bank rejecting the remittance or the tax department disallowing the treaty rate.

Penalty for Late Deposit

Interest at 1.5% per month (or part thereof) from the date of deduction to the date of deposit. Additionally, Section 276B provides for prosecution with imprisonment of 3 months to 7 years for failure to deposit TDS, though prosecution is rare for minor delays.

June 11: GSTR-1 for May 2026

Monthly filers must submit GSTR-1 (outward supply details) for May 2026 by June 11. This return captures all B2B invoices (with buyer GSTIN), B2C large invoices (exceeding INR 2.5 lakh), credit and debit notes, export invoices (with shipping bill references), and advances received.

For foreign-owned companies, pay particular attention to export invoices. Zero-rated supplies (exports and supplies to SEZ units) must be correctly reported to claim refund of input tax credit or IGST paid on exports. The Letter of Undertaking (LUT) under Form RFD-11 must be valid for the current financial year — if it expired on March 31, ensure renewal was filed before the first export invoice of FY 2026-27.

June 13: GSTR-6 for May 2026 (Input Service Distributors)

Input Service Distributors (ISDs) must file GSTR-6 by June 13. This return is relevant for companies that receive invoices for input services at their head office and distribute the credit among multiple GST-registered branches. Foreign companies with multiple GST registrations across Indian states often use the ISD mechanism to centralize vendor management.

June 15: First Advance Tax Installment

This is the single most important deadline in June. Companies must pay the first installment of advance tax for FY 2026-27, equal to 15% of the estimated annual tax liability. The advance tax obligation applies to any company whose estimated tax liability for the year exceeds INR 10,000 after deducting TDS.

How to Estimate the First Installment

For foreign-owned subsidiaries, the first advance tax payment requires estimating the full-year profit as of June — often based on just two months of actual data (April-May). Practical approaches include:

• Previous year basis: Use FY 2025-26 tax liability as the starting point, adjusted for known changes in revenue, costs, and transfer pricing arrangements
• Budget basis: Use the approved annual budget for the Indian subsidiary, adjusted for the applicable tax rate (25.17% under Section 115BAA for most foreign-owned companies)
• Rolling estimate: Update the estimate quarterly based on actual results, adjusting subsequent installments to true up

Interest on Shortfall

Under Section 234C, if the advance tax paid by June 15 falls short of 15% of the assessed tax, interest at 1% per month applies for 3 months (June to September) on the shortfall amount. However, there is a safe harbor: if you pay at least 12% by June 15, no Section 234C interest is charged for the first installment.

June 15: PF and ESI Deposits for May 2026

Employers must deposit Provident Fund (PF) contributions for May 2026 by June 15. The contribution rate remains 12% of basic salary plus dearness allowance from both employer and employee. The PF wage ceiling for mandatory coverage is INR 15,000 per month — employees earning above this can opt out (though most foreign companies extend PF to all employees as a retention tool).

ESI contributions for May 2026 are also due by June 15. Employer contribution is 3.25% and employee contribution is 0.75% of gross wages, applicable where employee wages do not exceed INR 21,000 per month.

June 15: Form 16 Issuance to Employees

Employers must issue Form 16 (TDS certificate for salary) to all employees by June 15, 2026. Form 16 covers the salary paid and tax deducted during FY 2025-26 (April 2025 to March 2026). It consists of two parts:

• Part A: Generated from the TRACES portal, containing TDS deposit details (challan numbers, BSR codes, dates of deposit)
• Part B: Prepared by the employer, showing detailed salary breakup, exemptions (HRA, LTA), deductions (Section 80C, 80D, 80TTA), and tax computation

Expatriate Employee Considerations

For foreign-owned companies with expatriate employees on secondment, Form 16 issuance is complicated by:

• Shadow payroll arrangements where the parent company pays the salary and the Indian subsidiary reimburses
• Dual employment scenarios triggering tax obligations in both countries
• Perquisite valuation for employer-provided accommodation, which is taxed at 10-15% of salary
• Tax equalization policies where the employer bears the differential tax burden

Failure to issue Form 16 by June 15 attracts a penalty of INR 100 per day under Section 272A(2)(g) of the Income Tax Act, for each employee to whom Form 16 is not issued.

June 20: GSTR-3B for May 2026

The summary return GSTR-3B for May 2026, along with tax payment, is due by June 20. For foreign-owned companies with significant imports from the parent entity (software licences, management services, IP access), ensure the reverse charge mechanism (RCM) liability is correctly computed and paid. Services imported from the parent — classified as "import of services" under GST — attract GST at the applicable rate (18% for most services) under RCM, which the Indian subsidiary must self-assess and pay.

Late Fee

Late filing attracts INR 50 per day (INR 25 CGST + INR 25 SGST) for returns with tax liability, capped at INR 5,000 per return. Interest at 18% per annum applies on the net tax liability from the due date.

June 30: Form DPT-3 — Return of Deposits

Every company (excluding government companies) must file Form DPT-3 with the Registrar of Companies (MCA) by June 30, 2026, covering deposits and outstanding receipts as of March 31, 2026. The return must be audited by the company's statutory auditor before filing.

What Counts as a Deposit?

For foreign-owned companies, the most common scenario triggering DPT-3 is inter-company loans from the parent that do not qualify as an exempted deposit. Under the Companies (Acceptance of Deposits) Rules, the following are NOT treated as deposits (and therefore exempt from DPT-3 reporting):

• Amounts received from the government or a government company
• Amounts received from a foreign government or international bank
• Amounts received as share application money (if allotment is made within 60 days)
• Amounts brought in by promoters as unsecured loans, subject to conditions

However, if the Indian subsidiary has accepted any amount that qualifies as a deposit under Section 73-76 of the Companies Act, DPT-3 filing is mandatory.

Penalty for Non-Filing

Non-filing of DPT-3 can attract fines of up to INR 10 crore or twice the amount of deposits, whichever is lower. The company and every officer in default are liable.

June 30: IEC Annual Update Window Closes

Companies holding an Import Export Code (IEC) must update their IEC details on the DGFT portal annually between April 1 and June 30. This is not optional — failure to update by June 30 results in automatic IEC deactivation, which means the company cannot conduct any import or export transactions until the update is completed.

What Must Be Updated

Even if there are no changes to the company's name, address, directors, or bank details, the IEC holder must still confirm the existing information on the DGFT portal. The update involves logging into the DGFT portal, verifying all fields, and submitting the confirmation. For foreign-owned companies that import goods (raw materials, capital equipment) or export services (IT services, BPO), an inactive IEC can halt operations without warning.

June 30: GSTR-4 Annual Return for Composition Dealers

Taxpayers registered under the GST Composition Scheme must file their annual return GSTR-4 for FY 2026-27 by June 30, 2026. The composition scheme is available to businesses with turnover up to INR 1.5 crore (INR 75 lakh for service providers) and offers simplified compliance — quarterly payment via CMP-08 and one annual return instead of monthly GSTR-1 and GSTR-3B.

While most foreign-owned companies do not opt for the composition scheme (it restricts inter-state sales and input tax credit claims), smaller entities or joint venture partners may use it. Late filing attracts INR 200 per day (INR 100 CGST + INR 100 SGST), capped at a percentage of turnover.

June 30: Professional Tax Returns (State-Specific)

Professional tax is a state-level tax that varies by jurisdiction. Key June deadlines include:

• Maharashtra: Monthly payment due by the last day of the month (June 30 for June payroll)
• Karnataka: Monthly payment due by the 20th of the following month
• West Bengal: Monthly payment due by the 21st of the following month
• Tamil Nadu: Half-yearly return due by June 30 for the April-September period

Foreign-owned companies with offices in multiple states must track professional tax obligations separately for each state, as rates, slabs, and due dates differ significantly.

Special Considerations for Foreign-Owned Subsidiaries in June

June carries several obligations that are uniquely challenging for foreign-owned companies operating in India. Beyond the standard deadlines, foreign subsidiaries must address cross-border-specific issues that domestic companies do not face.

Advance Tax and Transfer Pricing Adjustments

When estimating the first advance tax installment, foreign subsidiaries must account for potential transfer pricing adjustments. If the tax department made transfer pricing additions in previous assessment years, these adjustments should be factored into the current year's tax estimate to avoid interest under Section 234B and 234C. Common adjustment areas include management fee benchmarking, royalty rate disputes, and inter-company loan pricing.

Expatriate Payroll Reconciliation

The Form 16 deadline creates urgency around expatriate payroll reconciliation. For employees on secondment from the parent company, verify that perquisite valuations (employer-provided accommodation, car, club memberships) are computed correctly using Rule 3 valuations. Shadow payroll arrangements where the parent pays salary and the Indian subsidiary reimburses must be reconciled to ensure TDS is correctly computed at the Indian entity level. Any shortfall in TDS deduction discovered after Form 16 issuance triggers revised Form 16 requirements and potential demand notices.

FEMA Compliance Check

June is the right time to conduct a mid-year FEMA compliance check. Verify that all FC-GPR filings for share allotments in Q1 are complete (30-day deadline from allotment), ECB-2 returns for any external commercial borrowings are filed, and the Entity Master Form on the RBI FIRMS portal reflects the current shareholding structure. Any gaps discovered now can be addressed before the FLA return deadline in July. Companies that wait until July to discover FEMA non-compliance face compressed timelines and potential penalty compounding that could have been avoided with a June review.

Complete June 2026 Deadline Table

Action Plan for Foreign-Owned Companies

June requires parallel-tracking multiple deadlines across different regulators. Here is a prioritized action plan:

1. Week 1 (June 1-7): Deposit TDS/TCS for May. Begin advance tax estimation — gather April-May financials and project full-year profit. Prepare Form 16 Part B for all employees.
2. Week 2 (June 8-15): File GSTR-1 for May. Pay the 1st advance tax installment. Deposit PF and ESI. Issue Form 16 to all employees. Generate Part A from TRACES portal.
3. Week 3 (June 16-22): File GSTR-3B for May. Review DPT-3 applicability — check if any amounts qualify as deposits. Begin IEC update on DGFT portal if not yet done.
4. Week 4 (June 23-30): File DPT-3 with auditor certification. Complete IEC annual update before June 30 deadline. File GSTR-4 if applicable. Submit state professional tax returns.

For ongoing compliance support, explore our annual compliance service for Indian subsidiaries. Companies with complex cross-border payment structures can benefit from our FEMA and RBI compliance service. For a comprehensive overview of annual deadlines, see our annual compliance checklist for Indian companies.

Key Takeaways

• June 15 is a triple deadline — the first advance tax installment (15% of estimated liability), Form 16 issuance to employees, and PF/ESI deposits all converge on this date, requiring coordinated action from tax, HR, and payroll teams.
• The advance tax safe harbor threshold is 12% — paying at least 12% of estimated tax by June 15 avoids Section 234C interest, even if the full 15% is not paid, giving companies a small margin for estimation uncertainty.
• IEC deactivation on July 1 is automatic and immediate — if the annual update on the DGFT portal is not completed by June 30, the IEC is deactivated without notice, halting all import-export operations until the update is done.
• DPT-3 applies to most companies, not just those accepting public deposits — any company that has outstanding amounts that qualify as deposits under the Companies Act (including certain inter-company loans) must file DPT-3 by June 30, with potential penalties up to INR 10 crore.
• Expatriate employees complicate Form 16 issuance — shadow payroll arrangements, perquisite valuations, and tax equalization policies require careful handling to avoid incorrect TDS reporting, which can trigger demand notices during scrutiny assessment.