Income Tax e-Filing Portal: ITR Filing Guide for Foreign Companies

Who Must File: Foreign Company Tax Obligations in India

Under Indian tax law, a foreign company — defined under Section 2(23A) of the Income Tax Act as a company incorporated outside India — must file an income tax return in India if it earns income that is deemed to accrue or arise in India. This includes income from a business connection in India, income through or from any property in India, income from any asset or source of income in India, royalties or fees for technical services received from an Indian payer, and capital gains from transfer of assets situated in India.

Even if the foreign company has had Tax Deducted at Source (TDS) on all its Indian income — a common scenario for companies receiving royalties or fees for technical services — filing the ITR remains mandatory. The return is the mechanism through which the company claims credit for TDS, applies DTAA benefits, and establishes its tax position for the assessment year.

Foreign companies are taxed at 35% on their Indian income (compared to 25-30% for domestic companies), plus applicable surcharge and cess. The effective rate varies: for income up to INR 1 crore, it is 36.40% (no surcharge); for income between INR 1 crore and INR 10 crore, it rises to 37.13% (with 2% surcharge); and for income exceeding INR 10 crore, it reaches 38.22% (with 5% surcharge). Health and education cess at 4% applies in all cases.

Prerequisites: PAN, TAN, and DSC Registration

Before accessing the e-filing portal, a foreign company must have three registrations in place. Skipping any of these will block the filing process entirely.

Permanent Account Number (PAN)

PAN is the primary tax identification number. For foreign companies, PAN application is made through Form 49AA (for entities incorporated outside India), submitted either online through NSDL/UTIITSL portals or through the Indian embassy/consulate in the home country. The PAN card is typically issued within 15-20 working days. The PAN number becomes your login ID on the e-filing portal.

Tax Deduction Account Number (TAN)

TAN is required if the foreign company makes payments from India that are subject to TDS — salaries, rent, professional fees, or contractor payments. TAN registration is done through Form 49B, and the process is entirely online via the TRACES portal. Processing takes 7-10 working days. TAN registration at tdscpc.gov.in is mandatory for deductors.

Digital Signature Certificate (DSC)

All company ITR filings must be verified using a Digital Signature Certificate (DSC). For foreign companies, this presents a specific challenge: the DSC must be a Class 2 or Class 3 certificate from a Certifying Authority licensed by the Controller of Certifying Authorities (CCA) in India. For non-resident directors of a foreign company, the DSC is registered against their email ID (not PAN), which is a special provision since non-resident directors may not have an Indian PAN.

The DSC must be registered on the e-filing portal before the first filing attempt. Registration requires uploading the DSC's public key certificate (.pfx file) through the portal's DSC management section.

Registering on the e-Filing Portal

The Income Tax Department's e-filing portal at incometax.gov.in is the sole platform for filing returns. The registration process for a company involves specific steps that differ from individual registration.

Step-by-Step Registration

1. Navigate to incometax.gov.in and click "Register" in the top-right corner.
2. Select User Type: Choose "Company" from the dropdown. This is critical — selecting the wrong user type creates a registration mismatch that can only be resolved through the e-filing helpdesk.
3. Enter PAN: Input the company's PAN. The system will validate it against the PAN database. If the PAN is not found, verify that the PAN card was issued under the correct category ("Company" for Indian subsidiaries, "Foreign Company" for branch offices or LOs).
4. Enter company details: Company name (must match PAN records exactly), date of incorporation, registered office address in India, email address (use a company email, not a personal one), and Indian mobile number for OTP verification.
5. OTP verification: Verify both the email and mobile number via OTP. The mobile number must be an Indian number (+91) — this is a common blocking point for foreign companies without an Indian presence.
6. Set password: Create a password meeting the portal's complexity requirements. This password, along with the PAN, forms the login credentials.
7. Register DSC: After initial registration, navigate to My Profile > Register DSC and upload the digital signature certificate of the authorized signatory (typically the Principal Officer or the company's authorized representative in India).

Common Registration Issues

• Indian mobile number requirement: The portal mandates an Indian mobile number for OTP. Foreign companies without Indian staff can use their Indian CA's or registered agent's mobile number temporarily, then update it later.
• PAN-name mismatch: If the company name on PAN does not match the incorporation certificate, registration will fail. This often happens when the Indian entity was registered with a slightly different name variant.
• DSC compatibility: Only DSCs from CCA-licensed Indian certifying authorities are accepted. DSCs from Entrust, DigiCert, or other international CAs will not work. Indian DSC providers include eMudhra, Sify, and CDAC.

Which ITR Form to File: ITR-6 for Foreign Companies

Foreign companies registered in India (whether through a branch office, liaison office, project office, or as a registered foreign company under the Companies Act) must file ITR-6. This form applies to all companies that do not claim exemption under Section 11 (charitable or religious trusts).

Key Schedules in ITR-6 for Foreign Companies

For foreign companies with transfer pricing obligations, Schedule TPSA must be completed, and Form 3CEB (Transfer Pricing Accountant's Report) must be filed separately before the ITR due date.

Filing Due Dates for AY 2026-27

The Income Tax Act, 2025 (which replaces the Income Tax Act, 1961 effective April 1, 2026) introduces the unified "Tax Year" concept, replacing the previous "Previous Year" and "Assessment Year" distinction. However, the filing deadlines follow the same structure.

Penalty for Late Filing

Filing after the due date attracts a penalty under Section 234F: INR 5,000 if filed before December 31 of the assessment year, and INR 10,000 if filed after December 31. Additionally, interest under Section 234A accrues at 1% per month on the outstanding tax liability from the due date until the actual filing date.

Step-by-Step ITR-6 Filing Process

The e-filing portal offers two methods for filing ITR-6: online (directly on the portal) and offline (using the downloadable Java/Excel utility). For foreign companies with complex computations, the offline utility is generally more reliable.

Method 1: Online Filing

1. Login to incometax.gov.in with PAN and password.
2. Navigate to e-File > Income Tax Returns > File Income Tax Return.
3. Select Assessment Year: Choose AY 2026-27 (for income earned in Tax Year 2025-26).
4. Select Filing Status: Choose the applicable status — original, revised, or belated.
5. Select ITR Form: The portal should auto-suggest ITR-6 based on your PAN category. If not, manually select ITR-6.
6. Pre-fill data: The portal auto-populates TDS details from Form 26AS, advance tax payments, and basic company information. Verify all pre-filled data against your books.
7. Complete schedules: Fill in each applicable schedule — BP (business profits), CG (capital gains), OS (other sources), TR (treaty relief), and TPSA (transfer pricing).
8. Compute tax: The portal calculates tax liability based on the 35% rate for foreign companies, adds surcharge and cess, and credits TDS/advance tax.
9. Pay balance tax: If there is a tax payable balance, pay through Challan 280 before filing. The challan receipt (BSR code, date, serial number) must be entered in the return.
10. Verify with DSC: Submit the return using the registered Digital Signature Certificate. Companies cannot use Aadhaar OTP or EVC — DSC verification is mandatory.

Method 2: Offline Utility Filing

1. Download the latest ITR-6 utility (Java or Excel) from the Downloads section of the e-filing portal.
2. Fill the return offline, using the utility's validation checks to catch errors before submission.
3. Generate XML: The utility generates an XML file of the completed return.
4. Upload XML: Login to the portal, navigate to e-File > Income Tax Returns > File Income Tax Return, and upload the XML file.
5. Attach DSC: Sign the uploaded return with the registered DSC.

Claiming DTAA Benefits in ITR-6

Schedule TR (Tax Relief) is where foreign companies claim reduced tax rates under India's Double Taxation Avoidance Agreements. India has DTAAs with over 90 countries, and these treaties often provide reduced withholding tax rates on royalties, fees for technical services, interest, and dividends.

Requirements for Claiming DTAA Benefits

• Tax Residency Certificate (TRC): Obtained from the tax authority of the home country, confirming the company's tax residency status for the relevant year.
• Form 10F: Filed on the e-filing portal, containing details required under Rule 21AB — company name, status, nationality, TIN, period of residential status, and address in the home country.
• Form 15CA/15CB: While these are filing obligations for the Indian payer (not the foreign company), the foreign company should ensure the payer has correctly applied DTAA rates when deducting TDS. Incorrect TDS deduction at higher domestic rates requires a refund claim through the ITR.

A common issue: foreign companies discover at filing time that Indian clients deducted TDS at domestic rates (e.g., 35% on royalties) instead of DTAA rates (e.g., 10-15%). The excess TDS is refundable, but the refund process can take 6-18 months. Proactively share the TRC and Form 10F with Indian payers before they make payments.

Transfer Pricing Compliance Within ITR Filing

If the foreign company's Indian operations involve transactions with associated enterprises (which includes the parent company and any affiliates), and these transactions exceed INR 1 crore in aggregate during the tax year, transfer pricing compliance is triggered.

Filing Sequence

1. Maintain TP documentation: Contemporaneous documentation must be prepared before the ITR filing due date.
2. File Form 3CEB: The transfer pricing accountant's report must be uploaded on the e-filing portal separately, before the ITR filing.
3. Complete Schedule TPSA in ITR-6: Report the nature and value of international transactions, the method used for determining arm's length price, and any transfer pricing adjustments.

Form 3CEB requires certification by a Chartered Accountant. The due date for Form 3CEB is one month before the ITR due date — typically October 31 for the form, with the ITR due by November 30. Failure to file Form 3CEB attracts a penalty of INR 1,00,000 under Section 271BA.

The New Income Tax Act 2025: What Changes for Foreign Companies

The Income Tax Act, 2025, which replaces the 1961 Act effective April 1, 2026, introduces structural simplification but retains most substantive provisions for foreign companies. Key changes relevant to foreign companies include the following.

Unified Tax Year

The distinction between "Previous Year" and "Assessment Year" is eliminated. The first tax year under the new Act is April 1, 2026 to March 31, 2027 — referred to simply as "Tax Year 2026-27" rather than "AY 2027-28."

Simplified Section References

The Act reduces sections from 819 to 536. Foreign company provisions are reorganized but the substance remains unchanged: the 35% base tax rate, surcharge structure, permanent establishment rules, and DTAA override provisions all continue.

Dispute Resolution Panel

The new Act retains and strengthens the Dispute Resolution Panel (DRP) provisions for non-residents and foreign companies. The DRP must now issue directions along with points of determination and reasons — providing greater transparency in dispute resolution for cross-border tax matters.

Advance Tax Obligations for Foreign Companies

Foreign companies with a tax liability exceeding INR 10,000 in a financial year must pay advance tax in quarterly instalments. Missing advance tax payments attracts interest under Section 234B (for non-payment or short-payment) and Section 234C (for deferment of instalments).

Advance Tax Schedule

Interest under Section 234B is charged at 1% per month on the shortfall between advance tax paid and 90% of the assessed tax liability. Section 234C interest, also at 1% per month, applies to each instalment shortfall for the period of deferment. For foreign companies that earn income primarily through TDS-subject payments (royalties, FTS), the payer's TDS typically covers most of the tax liability, reducing the advance tax obligation proportionally.

Foreign companies often overlook advance tax on capital gains from asset disposals or on income types where TDS coverage is partial. A share sale generating INR 5 crore in capital gains mid-year requires advance tax payment in the next applicable instalment — waiting until the ITR filing to settle the liability results in 12+ months of interest charges.

Post-Filing: Assessment, Rectification, and Refunds

Filing the ITR is not the end of the process. Foreign companies should be prepared for three post-filing scenarios.

Intimation Under Section 143(1)

After processing, the Centralized Processing Center (CPC) issues an intimation comparing the filed return with the department's records (Form 26AS data, Annual Information Statement). If discrepancies are found — mismatched TDS credits, arithmetical errors, or disallowed deductions — the intimation may show additional tax demand or a reduced refund. Foreign companies should respond within 30 days of receiving the intimation, either accepting the adjustments or filing a rectification request under Section 154.

Scrutiny Assessment

The Assessing Officer may select the return for detailed scrutiny under Section 143(3). Foreign companies are at higher scrutiny risk due to cross-border transactions, transfer pricing arrangements, and DTAA claims. A scrutiny notice is typically served within 12 months of the end of the assessment year. Companies should keep all supporting documents — TRC, Form 10F, transfer pricing study, intercompany agreements, and board resolutions — readily accessible for at least 6 years from the end of the relevant assessment year.

Refund Processing

If the ITR shows a refund (typically due to excess TDS), the refund is processed within 4-12 months of filing. Refunds are credited directly to the Indian bank account linked to the PAN. Foreign companies must ensure their Indian bank account details are correctly updated on the portal — refund failures due to incorrect bank details are common and can delay the process by an additional 6-12 months. The portal allows tracking of refund status under e-File > Income Tax Returns > View Filed Returns.

Common Filing Mistakes Foreign Companies Make

Not Verifying Form 26AS Data

Form 26AS is the consolidated tax statement showing all TDS credits, advance tax payments, and tax refunds. Foreign companies often fail to reconcile their books with Form 26AS before filing. Discrepancies — a payer deducted TDS but did not deposit it, or deposited it against the wrong PAN — result in denied TDS credits and unexpected tax demands.

Missing the Transfer Pricing Filing Sequence

Filing ITR-6 before Form 3CEB triggers a compliance defect. Always file Form 3CEB first, then ITR-6. The portal may not block out-of-sequence filing, but the assessment officer will flag it.

Incorrect DTAA Country Code

When claiming treaty benefits in Schedule TR, selecting the wrong country code means the system applies incorrect treaty rates. This is especially common for companies with complex holding structures (e.g., a UK parent with a Singapore intermediate holding company).

Ignoring Advance Tax Obligations

Foreign companies with Indian business operations generating profits often overlook advance tax requirements, focusing only on TDS. If the projected tax liability after accounting for TDS credits exceeds INR 10,000, advance tax must be paid in quarterly instalments. Failure to pay attracts interest under both Section 234B (1% per month on the shortfall) and Section 234C (1% per month for each instalment shortfall). Companies that sell Indian assets mid-year face particular risk — a capital gain realized in August requires advance tax payment in the September instalment, not at the time of ITR filing.

Not Filing When Only TDS Income Exists

Many foreign companies assume that if all Indian income had TDS deducted, no filing is needed. This is incorrect. Filing is mandatory regardless of TDS status, and not filing forfeits the right to claim TDS refunds for excess deduction.

Key Takeaways

• Register early: PAN, TAN, DSC, and portal registration should be completed well before the filing season. DSC procurement alone can take 2-3 weeks for foreign companies.
• File Form 3CEB before ITR-6 if you have transfer pricing obligations. The sequence matters — Form 3CEB by October 31, ITR-6 by November 30 for AY 2026-27.
• Reconcile Form 26AS with your books before filing. Every TDS credit must be verified to avoid denied credits and subsequent tax demands.
• Share TRC and Form 10F proactively with Indian payers to ensure correct DTAA rates are applied at the TDS stage, avoiding lengthy refund processes.
• The new Income Tax Act 2025 does not change foreign company tax rates — it simplifies the structure, but the 35% base rate and DTAA provisions continue unchanged.

For professional assistance with ITR filing for foreign companies, explore our tax advisory services. For a comprehensive overview of India's taxation framework for foreign entities, see our guide on 35 questions about Indian taxation for foreign companies.