Prepared By

TARUN KUMAR

SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

Following is the broad checklist of the various act

to be complied with by the foreign company:-

COMPANIES ACT
• After opening the project office in India, form 44 need to be
filed within 30 days of the establishment of business in
India.
• List of the returns to be filed by the foreign company in
India:-

SR NO SECTION OF THE PURPOSE FORM TIME LIMIT

COMPANIES ACT,1956
1. SECTION 593(a),(b) CHANGES IN E form On or before 31st
AND (c) A) The charter, statues, or 49 January of the
Memorandum and Articles year following
of Association; or the year in which
B) The address of the the alteration
registered or principle was made or
office; or occurred.
C) The particulars of
directors, and secretary of
foreign company.

2. SECTION 593(d) & (e) CHANGES IN E form Within one

A) The names and addresses 52 month from the
of persons residents in date on which
India, authorized to the alteration
accept service on behalf was made or
of foreign company; or occurred.

B) The address of the

principal place of business
in India of a foreign
company.

3. SECTION 594(3) List of places of business of Eform Within nine

foreign company in India. 52 months from the
( IN TRIPLICATE ) close of financial
year.

SR SECTION OF THE PURPOSE FORM TIME LIMIT

NO COMPANIES ACT,
1956
4. SECTION 600(3)(b) Annual return containing New Within sixty
 Prepared By
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

(i) following particulars as on eform days from the

the last date of financial year is last date of its
of foreign company. prescri financial year.
bed. Normal fees-
A] The address of the 5,000
resisted or principle office of Additional fees-
the company. (more than one
year- 5000*8=
B] The address of the place 40,000)
where any part of the
register of the member or
debenture holders kept in
India.

C] The share issued for cash

or otherwise than for cash as
fully or partly paid up shares
and bonus shares.

1) DD in favour of
Registrar of
Companies, NCT Delhi
2) List of past and
present members of
the Company
3) List of pas and
present directors,
managers and
secretaries of the
Company
4) Declaration from
Managing director for
furnishing return
5) CD with all the
documents mentioned
above.

5. SECTION 597(3) Notice of ceasing to have a Eform Immediately.

place of business in India. 52
6. SECTION 600(1) & Particulars of charge on Eform Thirty days of
SECTION 125(1) property in India created by 8 creation of
a foreign company. charge.

(the period of
30 days in case
of charge
created outside
India will be
counted after
the date on
which
 Prepared By
TARUN KUMAR

SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

instrument of
charge or its
copy is dully
received in
India.)

7. SECTION 600(1) & Particulars of charge subject Eform Thirty days of

SECTION 127(1) to which property in India is 8 creation of
acquired by the foreign charge.
company. (the period of
30 days in case
of charge
created outside
India will be
counted after
the date on
which
instrument of
charge or its
copy is duly
received in
India.)

8. SECTION 600(1) & Particulars of issue of Eform Within 30 days

PROVISO TO debenture in a series by a 10 after the
SECTION 128 foreign company. execution of
the debenture
trust deed
creating a
charge or after
the issue of
debentures of
more than one
series.

9. SECTION 600(1) & Particulars of series of Eform Within 30 days

SECTION 128 debentures containing any 10 of issue of
charge; the following details deed or issue
a) the total amount of debentures
secured by the of the series.
whole series.
b) The date of
resolution
authorizing the issue
of the series and the
date of covering
letter.
c) A general
description of
property charged.
d) The names of
 Prepared By
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

trustee, if any of the

debenture holders.
10. SECTION 600(1) & Particulars of modification of Eform Within 30 days
SECTION 135 charge. 8 of modification
of charge.

11. SECTION 600(1) & Particulars of complete Eform Within 30 days

SECTION 138(1) satisfaction of charge. 17 of payment or
satisfaction or
release of
property
charged.

12. SECTION 594(1)(b) 1. Balance sheet and profit Eform Within nine
and loss account of the 52 months from
company as it would be the close of
Indian company with all the financial year.
attachments and annexure.
(Three copy) along with the
accounts of its Indian
business.

INCOME TAX ACT

Following is the broad list of the Income tax provisions need to
be complied with:-

1) Corporate Taxation :- The tax rate applicable to foreign

companies is 40%. This is further to be increased by
surcharge (2.5%) and education cess (3% on Tax plus
surcharge), making effective tax rate as 42.23%

2) Payment of Advance Tax:-

As per Section 208 of the Income tax act, advance tax
shall be payable during a financial year in every case where
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

the amount of such tax payable by the assessee during that

year, as computed in accordance with the provisions of the
act, is five thousand rupees or more.

Due Date of Instalment Amount Payable

On or before the 15th June Not less than 15% of such
advance tax
On or before the 15th Not less than 45% of such
September advance tax as reduced by the
amount, if any, paid in earlier
installment
On or before the 15th Not less than 75% of such
December advance tax as reduced by the
amount, if any, paid in earlier
installment or installments
On or before the 15th March The whole amount of such
advance tax as reduced by the
amount, if any, paid in earlier
installments

3)Fringe benefit tax

Finance Act, 2005 has inserted new tax called Fringe

Benefit Tax (FBT) and this tax is to be levied on the
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

employer in respect of fringe benefit provided or deemed to

be provided to his employees.

Applicability of Fringe Benefits Tax to Foreign Company

doing business in India:-

In case of Foreign company, having employees based in

India, FBT is payable on expenses attributable to operation
in India. If separate books of account for Indian and Foreign
operations are maintained, FBT is payable on Indian
expenses, otherwise, FBT is payable on proportionate global
expenses attributable to Indian operation worked out in
proportion to number of employees in India and abroad. If
there is no employee based in India, no FBT is payable.
If the Foreign company has a permanent establishment in
India and it incurred expenditure outside India, which is
claimed as a deduction in computing total Income of PE in
India, FBT is payable on the expenses incurred outside
India provided it is attributable to PE in India.

The following table shows the various expenses subject to FBT

and the value of fringe benefit
Sr.No. Expenditures Taxable Fringe
Benefit
1. Contribution to approved super 100%
annuation fund, which exceeds Rs1
lakh in respect of each employee
2 Entertainment expenses 20%
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3. Hospitality 20%
4. Conference 20%
5. Sales Promotion and publicity 20%
6. Employees welfare 20%
7 Use of Hotel boarding and lodging 20%
expenses
8. Use of telephone 20%
9. Maintenance of any accommodation 50%
in the form of guest house
10. Repairs, running and maintenance 20%
of Aircrafts and the amount of
depreciation.
11. Conveyance 20%
12. Festival celebration 50%
13. Use of health club and similar 50%
facility
14. Use of other club facility 50%
15. Gifts 50%
16. Scholarship 50%
17 Tours and Travel (including foreign 5%
travel)

In respect of companies engaged in construction business, the

taxable amount of conveyance as per above table should be
considered as 5% instead of 20%.

Rate of Advance Fringe Benefit Tax:-

Fringe Benefits Tax is payable @ 30% plus 2.5% surcharge (in

case of foreign companies) plus 3% education cess. Thus net
effective tax rate is 31.6725%
Prepared By
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

4) Payment of Advance Fringe benefit Tax

As per Section 115 WJ, every assessee has to pay, on his own
accord, advance tax on his current fringe benefits, in four
installments, as specified below:

Due Date of Instalment Amount Payable

On or before the 15th June Not less than 15% of such
advance tax
On or before the 15th Not less than 45% of such
September advance tax as reduced by the
amount, if any, paid in earlier
installment
On or before the 15th Not less than 75% of such
December advance tax as reduced by the
amount, if any, paid in earlier
installment or installments
On or before the 15th March The whole amount of such
advance tax as reduced by the
amount, if any, paid in earlier
installments
5) Tax Audit:-
As per section 44AB,If the total sales, turnover or gross
receipts, as the case may be, in business exceed or exceeds
forty lakh rupees in any previous year, then the books of
accounts need to be audited by Chartered accountant and
the report for the same to be submitted on or before 31st
October,2007.
Prepared By
TARUN KUMAR

SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

6) Filing of Income tax return:-

As per section 139(1), every company need to furnish a
return of income on or before 31st October, 2007

7) Preparation of Transfer Pricing Report:-

Every entity entering into International transactions has to
prepare and maintain prescribed documents as per Rule
10D of the Income Tax Rules, 1962. In the said
documentation, the international transactions entered into
by the entity are to be justified by using the most
appropriate method. The transfer Pricing report need to be
submitted on or before 31st October,2007 in form 3CEB.

8) Deduction of tax at Source:-

In case of certain payments, the tax need to be deducted at
source as per the prescribed rates under section 192 to
section 195 of the Income tax Act,1961:-
 Prepared By
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

If payment is more
than 10 lacs
Total
Nature of Payments Section Tax
rate

1. Contractors payments #
(Resident) 194C 2.266
g. Advertisement contracts 1.133

2. Rent paid to (Resident) 194I

I) for the use of any land or building (including factory buidling) or furniture or
fittings
a. Other than individuals and HUFs 22.66
b. Individuals and HUF 16.995
ii) for the use of any machinery or plant or equipment 11.33

3. Professional fees (Resident) 194J 11.33

4. Interest other than interest on securities (Resident) ## 194A

a. Companies 22.66
b. Individuals 11.33
0.00
5.Commission & Brokerage (Resident) 194H 11.33
(Other than Brokerage on shares/ securities)

6. Insurance Commission
a. Companies 22.66
b. Other than companies 11.33

7. Tax Rate for Corporate

- Domestic 33.99
- Foreign 42.23

9) Filing of ETDS return:-

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SR-MANAGER
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Mobile:+919910122115

The return of the tax deducted need to be filed on Quarterly

basis:-

Form for filing of E TDS Due Date of filing

Return
Salary Return:- Form 24 Within 15 days from the end of
the Quarter i.e. 15th July, 15th
October, 15th January, 15th
June
Resident Deduction:- Form 26 Within 15 days from the end of
the Quarter i.e. 15th July, 15th
October, 15th January, 15th
June
Foreign Deduction:- Form 27 Within 15 days from the end of
the Quarter i.e. 15th July, 15th
October, 15th January, 15th
April. However if there are
some provisional enteries then
the due date for filing 4th
Quarter return is 14th June

10) Wealth tax Act:-

In case Net wealth of the assets in India assessee exceeds
Rs. 15,00,000/- the wealth tax of 1% need to be paid
The Return of the wealth tax need to be filed on or before
31st October, 2007
Prepared By
TARUN KUMAR

SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

INDIRECT TAXES
1. Service Tax:-

In case the services provided by the company are covered

under the service tax then:-

1) The company need to registered itself under

service tax act
2) Company will have to issue the invoice as per
the format of service tax
3) The service tax need to be collected equal to
12.36% on the value of the service
4) Service tax collected should be paid by 5th of
next month in which fees for services are
received.
5) Every company has to file service tax returns
half yearly in form ST 3. Half year for the
period April to September is to be filed by 25th
October and the half-year return for the period
October to March to be filed by 25th April.

2. MAHARASHTRA VALUE ADDED TAX ACT: (MVAT):-

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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

1) The system of Value Added Tax (VAT) has been

implemented, in the State of Maharashtra, w.e.f. 1st
April 2005.
2) Person liable to pay Tax:-
Any person who trades in goods and services is liable to
pay tax, if the turnover crosses the limit prescribed for
this purpose.
Turnover limits for the purpose of Liability/Registration:

Sr. Limits Particulars

No
.
a) Rs In case of a dealer, who is an
100,000 importer, and the value of taxable
goods sold or purchase by him during
the year is not less than Rs 10,000
b) Rs In any other case, where the value of
500,000 taxable goods sold or purchased by
him during the year is not less than
Rs 10,000.

3) Subject matter for Tax:

VAT = Tax on Sales- Input Tax Credit- Credit b/f

4) Rate of Tax:

The tax rates differ from product to product. As per section 5

and 6 of Maharashtra State Value Added Tax Act, 2005, tax
rates are as under:

Sched
ules: –
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

Schedu Essential Commodities (Tax

– Nil
le ‘A’ free)
Schedu Gold, Silver, Precious Stones,
– 1%
le ‘B’ Pearls etc.
Declared Goods, Industrial
Schedu
– Inputs, and such other 4%
le ‘C’
specified goods
Foreign Liquor, Country Liquor
Schedu
– etc. Motor Spirits at specified 20%
le ‘D’
rates
Schedu All other goods (not covered 12.50
–
le ‘E’ by A to D) %

5) Exports
Exports are treated as zero-rated. Thus no tax is payable on
export of goods out of India.

6) Input Tax Credit

Registered Dealer is eligible to set-off tax paid on purchases
while calculating tax liability on sales.

7) Procedure formalities:
Every dealer has to register with MVAT authorities, within 30
from the date of achieving the stipulated turnover either of all
sales or of all purchases. Tax liability is to be discharged every
month with in 21days from the end of the month. Every
dealer has to get his or her accounts audited and submit audit
repot within eight months of the end of the year to which the
report relates. Failure to furnish such report, in time, may
attract penalty equal to one-tenth per cent of the total sales or
Prepared By
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SR-MANAGER
FINANCE & ACCOUNTS
Mobile:+919910122115

as the case may be, purchases or a sum of Rs. 1 lakh,

whichever is less.
Monthly returns are to be filed by corporate assessee in the
prescribed form within 21 days from the end of the month to
which the return relates.