{"id":30375,"date":"2025-11-05T01:07:28","date_gmt":"2025-11-04T19:37:28","guid":{"rendered":"https:\/\/carajput.com\/blog\/?p=30375"},"modified":"2025-11-05T01:09:41","modified_gmt":"2025-11-04T19:39:41","slug":"overview-on-payments-to-project-offices-of-foreign-companies-in-india","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/","title":{"rendered":"Overview on Payments to Project Offices of Foreign Companies in India"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Page Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e73e8ce7974\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e73e8ce7974\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#Payments_to_Project_Office_PO_of_a_Foreign_Company_in_India\" title=\"Payments to Project Office (PO) of a Foreign Company in India\">Payments to Project Office (PO) of a Foreign Company in India<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#Treatment_of_Payments_to_Project_Offices_of_Foreign_Companies_in_India_under_TDS_Form_15CA15CB_compliance\" title=\"Treatment of Payments to Project Offices of Foreign Companies in India under TDS &amp; Form 15CA\/15CB compliance:\">Treatment of Payments to Project Offices of Foreign Companies in India under TDS &amp; Form 15CA\/15CB compliance:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#TDS_Obligations\" title=\"TDS Obligations\">TDS Obligations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#Comparison_Project_Office_vs_Liaison_Office_vs_Branch_Office_of_Foreign_Company\" title=\"Comparison: Project Office vs Liaison Office vs Branch Office of Foreign Company\">Comparison: Project Office vs Liaison Office vs Branch Office of Foreign Company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#An_Indian_company_makes_a_payment_of_technical_fees_to_a_project_office_of_a_foreign_company_operating_in_India\" title=\"An Indian company makes a payment of technical fees to a project office of a foreign company operating in India.\">An Indian company makes a payment of technical fees to a project office of a foreign company operating in India.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#Form_15CA_Form_15CB_Compliance\" title=\"Form 15CA \/ Form 15CB Compliance\">Form 15CA \/ Form 15CB Compliance<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#1_Form_15CA_Declaration_by_Remitter\" title=\"1. Form 15CA (Declaration by Remitter)\">1. Form 15CA (Declaration by Remitter)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#2_Form_15CB_Certificate_by_Chartered_Accountant\" title=\"2. Form 15CB (Certificate by Chartered Accountant)\">2. Form 15CB (Certificate by Chartered Accountant)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/carajput.com\/blog\/overview-on-payments-to-project-offices-of-foreign-companies-in-india\/#Form_15CA_15CB_Compliance_Summary_Table_payment_of_technical_fees_to_a_project_office_of_a_foreign_company_operating_in_India\" title=\"Form 15CA \/ 15CB Compliance :\u00a0Summary Table\u00a0payment of technical fees to a project office of a foreign company operating in India.\">Form 15CA \/ 15CB Compliance :\u00a0Summary Table\u00a0payment of technical fees to a project office of a foreign company operating in India.<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<figure id=\"attachment_13359\" aria-describedby=\"caption-attachment-13359\" style=\"width: 1024px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-13359\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/15CB-means-final-1024x457-1.jpg\" alt=\"www.carajput.com: Introduction of Form15CA &amp; 15CB\" width=\"1024\" height=\"457\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/15CB-means-final-1024x457-1.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/15CB-means-final-1024x457-1-300x134.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/15CB-means-final-1024x457-1-768x343.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/12\/15CB-means-final-1024x457-1-800x357.jpg 800w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-13359\" class=\"wp-caption-text\">www.carajput.com: Introduction of Form15CA &amp; 15CB<\/figcaption><\/figure>\n<h2 data-start=\"320\" data-end=\"390\"><span class=\"ez-toc-section\" id=\"Payments_to_Project_Office_PO_of_a_Foreign_Company_in_India\"><\/span><span style=\"color: #000080;\"><strong data-start=\"323\" data-end=\"388\">Payments to Project Office (PO) of a Foreign Company in India<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 data-start=\"0\" data-end=\"143\"><span class=\"ez-toc-section\" id=\"Treatment_of_Payments_to_Project_Offices_of_Foreign_Companies_in_India_under_TDS_Form_15CA15CB_compliance\"><\/span><span style=\"color: #000080;\">Treatment of <strong data-start=\"35\" data-end=\"96\">Payments to Project Offices of Foreign Companies in India<\/strong> under <strong data-start=\"103\" data-end=\"140\">TDS &amp; Form 15CA\/15CB compliance<\/strong>:<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"392\" data-end=\"601\">Payments made to a Project Office of a foreign company in India attract TDS u\/s 195 of the Income Tax Act, 1961, and require compliance with Form 15CA\/15CB filing requirements.\u00a0A Project Office is typically regarded as a permanent establishment of the foreign company in India. Consequently, income attributable to the activities carried out in India through such an office is taxable in India as business income.<\/p>\n<h3 data-start=\"865\" data-end=\"891\"><span class=\"ez-toc-section\" id=\"TDS_Obligations\"><\/span><span style=\"color: #000080;\"><strong data-start=\"872\" data-end=\"891\">TDS Obligations<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"893\" data-end=\"915\"><span style=\"color: #000080;\"><strong>TDS Applicability :<\/strong> <\/span>Any person (resident or non-resident) making a payment to the Project Office of a foreign company must deduct TDS if the payment is chargeable to tax in India. The Project Office is treated as a non-resident entity for tax purposes (except in specific cases governed by the POEM rules).<\/li>\n<li data-start=\"1218\" data-end=\"1241\"><span style=\"color: #000080;\"><strong>Taxable Income :<\/strong> <\/span>The PO\u2019s income from operations in India is taxable at rates applicable to foreign companies, 40% (plus applicable surcharge and cess) on net taxable income, or at a beneficial DTAA rate, whichever is lower.<\/li>\n<li data-start=\"1480\" data-end=\"1500\"><span style=\"color: #000080;\"><strong>Rate of TDS<\/strong> <\/span>: Without DTAA benefit: Standard TDS rates under the Income Tax Act apply (e.g., 20% for royalty\/FTS, 40% on business profits if not covered under specific provisions).<\/li>\n<li data-start=\"1678\" data-end=\"1796\"><span style=\"color: #000080;\"><strong>With DTAA benefit: <\/strong><\/span>The lower of the Indian domestic rate or the DTAA rate applies, subject to submission of Tax Residency Certificate (TRC) from the foreign tax authority, and Form 10F duly completed by the foreign company.<\/li>\n<li data-start=\"1934\" data-end=\"1979\"><strong><span style=\"color: #000080;\">Lower\/Nil TDS Certificate (Optional) :<\/span><\/strong> The PO may apply to the Assessing Officer (AO) under Section 197 for a certificate of lower or nil deduction of tax. This is often recommended because the final tax liability is computed on net income, while TDS is typically applied on a gross payment basis.<\/li>\n<\/ul>\n<h3 data-start=\"316\" data-end=\"406\"><span class=\"ez-toc-section\" id=\"Comparison_Project_Office_vs_Liaison_Office_vs_Branch_Office_of_Foreign_Company\"><\/span><span style=\"color: #000080;\"><strong data-start=\"322\" data-end=\"406\">Comparison: Project Office vs Liaison Office vs Branch Office of Foreign Company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"408\" data-end=\"4125\">\n<thead data-start=\"408\" data-end=\"504\">\n<tr data-start=\"408\" data-end=\"504\">\n<th data-start=\"408\" data-end=\"426\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"410\" data-end=\"425\">Particulars<\/strong><\/span><\/th>\n<th data-start=\"426\" data-end=\"452\" data-col-size=\"md\"><span style=\"color: #000080;\"><strong data-start=\"428\" data-end=\"451\">Project Office\u00a0<\/strong><\/span><\/th>\n<th data-start=\"452\" data-end=\"478\" data-col-size=\"md\"><span style=\"color: #000080;\"><strong data-start=\"454\" data-end=\"477\">Liaison Office\u00a0<\/strong><\/span><\/th>\n<th data-start=\"478\" data-end=\"504\" data-col-size=\"lg\"><span style=\"color: #000080;\"><strong data-start=\"480\" data-end=\"502\">Branch Office\u00a0<\/strong><\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"607\" data-end=\"4125\">\n<tr data-start=\"607\" data-end=\"892\">\n<td data-start=\"607\" data-end=\"629\" data-col-size=\"sm\">1. Legal Status<\/td>\n<td data-start=\"629\" data-end=\"710\" data-col-size=\"md\">Extension of the foreign company set up to execute specific projects in India.<\/td>\n<td data-col-size=\"md\" data-start=\"710\" data-end=\"800\">Representative office of the foreign company for liaison\/communication activities only.<\/td>\n<td data-col-size=\"lg\" data-start=\"800\" data-end=\"892\">Extension of the foreign company to carry out full-fledged business operations in India.<\/td>\n<\/tr>\n<tr data-start=\"893\" data-end=\"1207\">\n<td data-start=\"893\" data-end=\"936\" data-col-size=\"sm\">2. Permitted Activities (as per RBI)<\/td>\n<td data-col-size=\"md\" data-start=\"936\" data-end=\"997\">Execution of specific projects\/contracts awarded in India.<\/td>\n<td data-col-size=\"md\" data-start=\"997\" data-end=\"1095\">Communication channel between Head Office and Indian parties; no commercial activity permitted.<\/td>\n<td data-col-size=\"lg\" data-start=\"1095\" data-end=\"1207\">Same activities as parent company \u2014 trading, consultancy, professional services, etc. (as per RBI approval).<\/td>\n<\/tr>\n<tr data-start=\"1208\" data-end=\"1439\">\n<td data-start=\"1208\" data-end=\"1238\" data-col-size=\"sm\">3. Tax Residency Status<\/td>\n<td data-col-size=\"md\" data-start=\"1238\" data-end=\"1293\">Non-resident (considered PE of foreign company).<\/td>\n<td data-col-size=\"md\" data-start=\"1293\" data-end=\"1394\">Non-resident, but not taxable unless it earns income in India (which it generally cannot).<\/td>\n<td data-col-size=\"lg\" data-start=\"1394\" data-end=\"1439\">Non-resident (PE of foreign company).<\/td>\n<\/tr>\n<tr data-start=\"1440\" data-end=\"1743\">\n<td data-start=\"1440\" data-end=\"1469\" data-col-size=\"sm\">4. Taxability in India<\/td>\n<td data-col-size=\"md\" data-start=\"1469\" data-end=\"1569\">Taxable \u2013 Business income attributable to Indian operations is taxable in India as PE income.<\/td>\n<td data-col-size=\"md\" data-start=\"1569\" data-end=\"1667\">Not taxable \u2013 If it confines itself to permitted liaison activities (no income generation).<\/td>\n<td data-col-size=\"lg\" data-start=\"1667\" data-end=\"1743\">Taxable \u2013 Income attributable to Indian operations taxable in India.<\/td>\n<\/tr>\n<tr data-start=\"1744\" data-end=\"1967\">\n<td data-start=\"1744\" data-end=\"1770\" data-col-size=\"sm\">5. Typical Tax Rate<\/td>\n<td data-col-size=\"md\" data-start=\"1770\" data-end=\"1825\">40% + surcharge + cess (on net income) or DTAA rate.<\/td>\n<td data-col-size=\"md\" data-start=\"1825\" data-end=\"1911\">Nil (if no income activity); taxed if engaged in business in violation of approval.<\/td>\n<td data-col-size=\"lg\" data-start=\"1911\" data-end=\"1967\">40% + surcharge + cess (on net income) or DTAA rate.<\/td>\n<\/tr>\n<tr data-start=\"1968\" data-end=\"2265\">\n<td data-start=\"1968\" data-end=\"2009\" data-col-size=\"sm\">6. TDS Applicability (Section 195)<\/td>\n<td data-col-size=\"md\" data-start=\"2009\" data-end=\"2102\">Applicable \u2013 on payments made to PO (e.g., FTS, professional fees, project revenue).<\/td>\n<td data-col-size=\"md\" data-start=\"2102\" data-end=\"2187\">Not applicable \u2013 since LO cannot receive income; only reimbursement allowed.<\/td>\n<td data-col-size=\"lg\" data-start=\"2187\" data-end=\"2265\">Applicable \u2013 for payments made to BO (royalty, FTS, interest, etc.).<\/td>\n<\/tr>\n<tr data-start=\"2266\" data-end=\"2453\">\n<td data-start=\"2266\" data-end=\"2311\" data-col-size=\"sm\">7. Common Payment Types Attracting TDS<\/td>\n<td data-col-size=\"md\" data-start=\"2311\" data-end=\"2367\">Technical fees, project receipts, consultancy income.<\/td>\n<td data-col-size=\"md\" data-start=\"2367\" data-end=\"2400\">None (only HO reimbursements).<\/td>\n<td data-col-size=\"lg\" data-start=\"2400\" data-end=\"2453\">Consultancy fees, royalties, service income, etc.<\/td>\n<\/tr>\n<tr data-start=\"2454\" data-end=\"2725\">\n<td data-start=\"2454\" data-end=\"2492\" data-col-size=\"sm\">8. Form 15CA \/ 15CB Requirement<\/td>\n<td data-col-size=\"md\" data-start=\"2492\" data-end=\"2565\">Required \u2013 payment treated as remittance to non-resident entity.<\/td>\n<td data-col-size=\"md\" data-start=\"2565\" data-end=\"2650\">Not required \u2013 no remittance of taxable income (only expense reimbursement).<\/td>\n<td data-col-size=\"lg\" data-start=\"2650\" data-end=\"2725\">Required \u2013 payment is remittance to non-resident foreign company.<\/td>\n<\/tr>\n<tr data-start=\"2726\" data-end=\"2904\">\n<td data-start=\"2726\" data-end=\"2763\" data-col-size=\"sm\">9. Applicable Compliance Forms<\/td>\n<td data-col-size=\"md\" data-start=\"2763\" data-end=\"2817\">Form 15CA (Part C) &amp; Form 15CB (if &gt; \u20b95 lakh\/year).<\/td>\n<td data-col-size=\"md\" data-start=\"2817\" data-end=\"2849\">None (if reimbursement only).<\/td>\n<td data-col-size=\"lg\" data-start=\"2849\" data-end=\"2904\">Form 15CA (Part C) &amp; Form 15CB (if &gt; \u20b95 lakh\/year).<\/td>\n<\/tr>\n<tr data-start=\"2905\" data-end=\"3107\">\n<td data-start=\"2905\" data-end=\"2951\" data-col-size=\"sm\">10. Lower\/Nil TDS Certificate (u\/s 197)<\/td>\n<td data-col-size=\"md\" data-start=\"2951\" data-end=\"3008\">Can be obtained to avoid excess TDS on gross payments.<\/td>\n<td data-col-size=\"md\" data-start=\"3008\" data-end=\"3046\">Not applicable (no taxable income).<\/td>\n<td data-col-size=\"lg\" data-start=\"3046\" data-end=\"3107\">Can be obtained for reduced TDS on recurring remittances.<\/td>\n<\/tr>\n<tr data-start=\"3108\" data-end=\"3232\">\n<td data-start=\"3108\" data-end=\"3131\" data-col-size=\"sm\">11. DTAA Benefit<\/td>\n<td data-col-size=\"md\" data-start=\"3131\" data-end=\"3166\">Available (with TRC + Form 10F).<\/td>\n<td data-col-size=\"md\" data-start=\"3166\" data-end=\"3196\">Not applicable (no income).<\/td>\n<td data-col-size=\"lg\" data-start=\"3196\" data-end=\"3232\">Available (with TRC + Form 10F).<\/td>\n<\/tr>\n<tr data-start=\"3233\" data-end=\"3462\">\n<td data-start=\"3233\" data-end=\"3275\" data-col-size=\"sm\">12. Common RBI Regulation Reference<\/td>\n<td data-col-size=\"md\" data-start=\"3275\" data-end=\"3337\">FEMA Notification No. FEMA 22(R)\/2016-RB \u2013 Regulation 5(d).<\/td>\n<td data-col-size=\"md\" data-start=\"3337\" data-end=\"3399\">FEMA Notification No. FEMA 22(R)\/2016-RB \u2013 Regulation 5(c).<\/td>\n<td data-col-size=\"lg\" data-start=\"3399\" data-end=\"3462\">FEMA Notification No. FEMA 22(R)\/2016-RB \u2013 Regulation 5(b).<\/td>\n<\/tr>\n<tr data-start=\"3463\" data-end=\"3656\">\n<td data-start=\"3463\" data-end=\"3495\" data-col-size=\"sm\">13. Example of TDS Nature<\/td>\n<td data-col-size=\"md\" data-start=\"3495\" data-end=\"3557\">TDS @ 20% on FTS, 40% on business income (subject to DTAA).<\/td>\n<td data-col-size=\"md\" data-start=\"3557\" data-end=\"3592\">No TDS (if no taxable activity).<\/td>\n<td data-col-size=\"lg\" data-start=\"3592\" data-end=\"3656\">TDS @ 10%-20% depending on nature (interest, royalty, etc.).<\/td>\n<\/tr>\n<tr data-start=\"3657\" data-end=\"3865\">\n<td data-start=\"3657\" data-end=\"3694\" data-col-size=\"sm\">14. Typical Risk Area in Audit<\/td>\n<td data-col-size=\"md\" data-start=\"3694\" data-end=\"3758\">Misclassification of payments as reimbursements to avoid TDS.<\/td>\n<td data-col-size=\"md\" data-start=\"3758\" data-end=\"3809\">Engaging in revenue activity (tax evasion risk).<\/td>\n<td data-col-size=\"lg\" data-start=\"3809\" data-end=\"3865\">Misreporting of foreign income vs Indian operations.<\/td>\n<\/tr>\n<tr data-start=\"3866\" data-end=\"4125\">\n<td data-start=\"3866\" data-end=\"3903\" data-col-size=\"sm\">15. Key Documentation Required<\/td>\n<td data-col-size=\"md\" data-start=\"3903\" data-end=\"3989\">Project contract, RBI approval, PAN, TRC, Form 10F, lower TDS certificate (if any).<\/td>\n<td data-col-size=\"md\" data-start=\"3989\" data-end=\"4063\">RBI approval, expense details, proof of reimbursement, bank statements.<\/td>\n<td data-col-size=\"lg\" data-start=\"4063\" data-end=\"4125\">RBI approval, PAN, TRC, Form 10F, audited branch accounts.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<div tabindex=\"-1\"><\/div>\n<\/div>\n<p data-start=\"4166\" data-end=\"4376\"><strong><span style=\"color: #000080;\">Liaison Office:<\/span> <\/strong>Cannot earn income in India; only acts as a communication channel. Any income-generating activity would violate RBI approval and attract tax under Section 9 and FEMA penalties.<\/p>\n<p data-start=\"4380\" data-end=\"4553\"><span style=\"color: #000080;\"><strong>Project Office: \u00a0<\/strong><\/span>Treated as a Permanent Establishment (PE) of the foreign company. All profits attributable to Indian projects are taxable in India.<\/p>\n<p data-start=\"4557\" data-end=\"4751\"><span style=\"color: #000080;\"><strong>Branch Office:<\/strong><\/span> Also treated as PE; all income attributable to Indian business operations is taxable. Full TDS and Form 15CA\/CB compliance required for payments\/remittances.<\/p>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 140px;\" width=\"1061\" data-start=\"4786\" data-end=\"5249\">\n<thead data-start=\"4786\" data-end=\"4882\">\n<tr data-start=\"4786\" data-end=\"4882\">\n<th data-start=\"4786\" data-end=\"4804\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4788\" data-end=\"4803\">Office Type<\/strong><\/span><\/th>\n<th data-start=\"4804\" data-end=\"4828\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4806\" data-end=\"4827\">Taxable in India?<\/strong><\/span><\/th>\n<th data-start=\"4828\" data-end=\"4846\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4830\" data-end=\"4845\">TDS u\/s 195<\/strong><\/span><\/th>\n<th data-start=\"4846\" data-end=\"4867\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4848\" data-end=\"4866\">Form 15CA\/15CB<\/strong><\/span><\/th>\n<th data-start=\"4867\" data-end=\"4882\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4869\" data-end=\"4880\">Remarks<\/strong><\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"4981\" data-end=\"5249\">\n<tr data-start=\"4981\" data-end=\"5084\">\n<td data-start=\"4981\" data-end=\"5002\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"4983\" data-end=\"5001\">Liaison Office<\/strong><\/span><\/td>\n<td data-start=\"5002\" data-end=\"5036\" data-col-size=\"sm\"><span style=\"color: #000080;\">\u00a0No (if only liaison activity)<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5036\" data-end=\"5043\"><span style=\"color: #000080;\">No<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5043\" data-end=\"5050\"><span style=\"color: #000080;\">\u00a0No<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5050\" data-end=\"5084\"><span style=\"color: #000080;\">Only reimbursements permitted.<\/span><\/td>\n<\/tr>\n<tr data-start=\"5085\" data-end=\"5167\">\n<td data-start=\"5085\" data-end=\"5106\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"5087\" data-end=\"5105\">Project Office<\/strong><\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5106\" data-end=\"5114\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5114\" data-end=\"5122\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5122\" data-end=\"5130\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5130\" data-end=\"5167\"><span style=\"color: #000080;\">Treated as PE of foreign company.<\/span><\/td>\n<\/tr>\n<tr data-start=\"5168\" data-end=\"5249\">\n<td data-start=\"5168\" data-end=\"5188\" data-col-size=\"sm\"><span style=\"color: #000080;\"><strong data-start=\"5170\" data-end=\"5187\">Branch Office<\/strong><\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5188\" data-end=\"5196\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5196\" data-end=\"5204\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5204\" data-end=\"5212\"><span style=\"color: #000080;\">Yes<\/span><\/td>\n<td data-col-size=\"sm\" data-start=\"5212\" data-end=\"5249\"><span style=\"color: #000080;\">Business income taxable in India.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3><span class=\"ez-toc-section\" id=\"An_Indian_company_makes_a_payment_of_technical_fees_to_a_project_office_of_a_foreign_company_operating_in_India\"><\/span><span style=\"color: #000080;\">An Indian company makes a payment of technical fees to a project office of a foreign company operating in India.<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"323\" data-end=\"479\">\n<p data-start=\"325\" data-end=\"479\">A project office of a foreign company in India is not a separate legal entity; it is merely an extension of the foreign parent company.<\/p>\n<\/li>\n<li data-start=\"480\" data-end=\"691\">\n<p data-start=\"482\" data-end=\"691\">For income tax purposes, a project office is generally treated as a non-resident, unless it constitutes a Permanent Establishment (PE) in India under a Double Taxation Avoidance Agreement .<\/p>\n<\/li>\n<li data-start=\"692\" data-end=\"868\">\n<p data-start=\"694\" data-end=\"868\">Therefore, payments such as technical fees, royalty, or consultancy charges made to a PO are deemed to accrue or arise in India under Section 9(1)(vii).<\/p>\n<\/li>\n<li data-start=\"869\" data-end=\"1042\">\n<p data-start=\"871\" data-end=\"1042\">These are taxable as Fees for Technical Services :\u00a0typically at 20% plus applicable surcharge and cess, subject to relief under the DTAA (if applicable).<\/p>\n<\/li>\n<li data-start=\"869\" data-end=\"1042\">\n<p data-start=\"871\" data-end=\"1042\">TDS under Section 195 applies, as payment is made to a non-resident entity (the foreign company via its project office).<\/p>\n<\/li>\n<\/ul>\n<h2 data-start=\"2271\" data-end=\"2314\"><span class=\"ez-toc-section\" id=\"Form_15CA_Form_15CB_Compliance\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2278\" data-end=\"2314\">Form 15CA \/ Form 15CB Compliance<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 data-start=\"2316\" data-end=\"2360\"><span class=\"ez-toc-section\" id=\"1_Form_15CA_Declaration_by_Remitter\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2316\" data-end=\"2358\">1. Form 15CA (Declaration by Remitter)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"2361\" data-end=\"2728\">\n<li data-start=\"2361\" data-end=\"2454\">\n<p data-start=\"2363\" data-end=\"2454\">Filed online by the remitter before making the payment through an authorised dealer\/bank. It provides details such as nature of payment, amount, TDS deducted, and purpose code. Mandatory for most <strong data-start=\"2567\" data-end=\"2590\">foreign remittances<\/strong> unless specifically <strong data-start=\"2611\" data-end=\"2637\">exempt under Rule 37BB<\/strong>, e.g.:\u00a0Certain import payments, Specified personal remittances by individuals<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"2730\" data-end=\"2786\"><span class=\"ez-toc-section\" id=\"2_Form_15CB_Certificate_by_Chartered_Accountant\"><\/span><span style=\"color: #000080;\"><strong data-start=\"2730\" data-end=\"2784\">2. Form 15CB (Certificate by Chartered Accountant)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"2787\" data-end=\"3148\">\n<li data-start=\"2787\" data-end=\"2924\">\n<p data-start=\"2789\" data-end=\"2924\">Income Tax Form 15CB Issued by a practicing CA Certifying the nature of remittance, taxability under Indian law, and TDS compliance.\u00a0Required when The remittance is taxable in India, and The aggregate of such remittances exceeds \u20b95 lakh in a financial year, and\u00a0 No lower\/nil TDS certificate has been obtained from the AO. Flow of Compliance, as mentioned below:<\/p>\n<\/li>\n<\/ul>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 232px;\" width=\"1053\" data-start=\"3179\" data-end=\"3569\">\n<thead data-start=\"3179\" data-end=\"3213\">\n<tr data-start=\"3179\" data-end=\"3213\">\n<th data-start=\"3179\" data-end=\"3186\" data-col-size=\"sm\"><span style=\"color: #000080;\">Step<\/span><\/th>\n<th data-start=\"3186\" data-end=\"3195\" data-col-size=\"md\"><span style=\"color: #000080;\">Action<\/span><\/th>\n<th data-start=\"3195\" data-end=\"3213\" data-col-size=\"sm\"><span style=\"color: #000080;\">Responsibility<\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"3250\" data-end=\"3569\">\n<tr data-start=\"3250\" data-end=\"3311\">\n<td data-start=\"3250\" data-end=\"3254\" data-col-size=\"sm\">1<\/td>\n<td data-start=\"3254\" data-end=\"3294\" data-col-size=\"md\">Determine taxability of payment to PO<\/td>\n<td data-col-size=\"sm\" data-start=\"3294\" data-end=\"3311\">Remitter \/ CA<\/td>\n<\/tr>\n<tr data-start=\"3312\" data-end=\"3375\">\n<td data-start=\"3312\" data-end=\"3316\" data-col-size=\"sm\">2<\/td>\n<td data-col-size=\"md\" data-start=\"3316\" data-end=\"3363\">Deduct TDS under Section 195 (if applicable)<\/td>\n<td data-col-size=\"sm\" data-start=\"3363\" data-end=\"3375\">Remitter<\/td>\n<\/tr>\n<tr data-start=\"3376\" data-end=\"3439\">\n<td data-start=\"3376\" data-end=\"3380\" data-col-size=\"sm\">3<\/td>\n<td data-col-size=\"md\" data-start=\"3380\" data-end=\"3415\">Obtain Form 15CB (if applicable)<\/td>\n<td data-col-size=\"sm\" data-start=\"3415\" data-end=\"3439\">Chartered Accountant<\/td>\n<\/tr>\n<tr data-start=\"3440\" data-end=\"3500\">\n<td data-start=\"3440\" data-end=\"3444\" data-col-size=\"sm\">4<\/td>\n<td data-start=\"3444\" data-end=\"3488\" data-col-size=\"md\">File Form 15CA (appropriate Part A\/B\/C\/D)<\/td>\n<td data-col-size=\"sm\" data-start=\"3488\" data-end=\"3500\">Remitter<\/td>\n<\/tr>\n<tr data-start=\"3501\" data-end=\"3569\">\n<td data-start=\"3501\" data-end=\"3505\" data-col-size=\"sm\">5<\/td>\n<td data-start=\"3505\" data-end=\"3557\" data-col-size=\"md\">Submit acknowledgement and CA certificate to bank<\/td>\n<td data-col-size=\"sm\" data-start=\"3557\" data-end=\"3569\">Remitter<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 data-start=\"1196\" data-end=\"1234\"><span class=\"ez-toc-section\" id=\"Form_15CA_15CB_Compliance_Summary_Table_payment_of_technical_fees_to_a_project_office_of_a_foreign_company_operating_in_India\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1203\" data-end=\"1234\">Form 15CA \/ 15CB Compliance :\u00a0<\/strong><strong data-start=\"1579\" data-end=\"1596\">Summary Table\u00a0<\/strong>payment of technical fees to a project office of a foreign company operating in India.<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 275px;\" width=\"1078\" data-start=\"3601\" data-end=\"4039\">\n<thead data-start=\"3601\" data-end=\"3627\">\n<tr data-start=\"3601\" data-end=\"3627\">\n<th data-start=\"3601\" data-end=\"3614\" data-col-size=\"sm\">Particular<\/th>\n<th data-start=\"3614\" data-end=\"3627\" data-col-size=\"md\">Treatment<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"3657\" data-end=\"4039\">\n<tr data-start=\"3657\" data-end=\"3741\">\n<td data-start=\"3657\" data-end=\"3677\" data-col-size=\"sm\">Entity Status<\/td>\n<td data-col-size=\"md\" data-start=\"3677\" data-end=\"3741\">Project Office = Extension of foreign company (Non-resident)<\/td>\n<\/tr>\n<tr data-start=\"3742\" data-end=\"3828\">\n<td data-start=\"3742\" data-end=\"3765\" data-col-size=\"sm\">Nature of Income<\/td>\n<td data-col-size=\"md\" data-start=\"3765\" data-end=\"3828\">Business income taxable in India (as PE of foreign company)<\/td>\n<\/tr>\n<tr data-start=\"3829\" data-end=\"3862\">\n<td data-start=\"3829\" data-end=\"3847\" data-col-size=\"sm\">TDS Section<\/td>\n<td data-col-size=\"md\" data-start=\"3847\" data-end=\"3862\">Section 195<\/td>\n<\/tr>\n<tr data-start=\"3863\" data-end=\"3925\">\n<td data-start=\"3863\" data-end=\"3878\" data-col-size=\"sm\">Tax Rate<\/td>\n<td data-start=\"3878\" data-end=\"3925\" data-col-size=\"md\">40% + surcharge + cess (or lower DTAA rate)<\/td>\n<\/tr>\n<tr data-start=\"3926\" data-end=\"3976\">\n<td data-start=\"3926\" data-end=\"3947\" data-col-size=\"sm\">Form 15CA\/15CB<\/td>\n<td data-col-size=\"md\" data-start=\"3947\" data-end=\"3976\">Mandatory (unless exempt)<\/td>\n<\/tr>\n<tr data-start=\"3977\" data-end=\"4039\">\n<td data-start=\"3977\" data-end=\"4008\" data-col-size=\"sm\">Option for Lower\/Nil TDS<\/td>\n<td data-col-size=\"md\" data-start=\"4008\" data-end=\"4039\">Available under Section 197<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<p data-start=\"1196\" data-end=\"1234\"><span style=\"font-size: 16px;\">Even if the payment is made <\/span><span style=\"font-size: 16px;\">to an Indian bank account<\/span><span style=\"font-size: 16px;\"> held by the project office, the <\/span><span style=\"font-size: 16px;\">beneficial owner<\/span><span style=\"font-size: 16px;\"> of the income is the <\/span><span style=\"font-size: 16px;\">foreign company<\/span><span style=\"font-size: 16px;\">.\u00a0<\/span><span style=\"font-size: 16px;\">Hence, such remittance is considered a <\/span><span style=\"font-size: 16px;\">foreign remittance<\/span><span style=\"font-size: 16px;\"> for <\/span><span style=\"font-size: 16px;\">Rule 37BB<\/span><span style=\"font-size: 16px;\"> compliance.\u00a0<\/span><span style=\"font-size: 16px;\">Accordingly, <\/span><span style=\"font-size: 16px;\">Form 15CA and 15CB must be filed<\/span><span style=\"font-size: 16px;\"> before making the payment.<\/span><\/p>\n<div class=\"_tableContainer_1rjym_1\">\n<div class=\"group _tableWrapper_1rjym_13 flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 255px;\" width=\"1041\" data-start=\"1598\" data-end=\"2081\">\n<thead data-start=\"1598\" data-end=\"1623\">\n<tr data-start=\"1598\" data-end=\"1623\">\n<th data-start=\"1598\" data-end=\"1612\" data-col-size=\"sm\">Particulars<\/th>\n<th data-start=\"1612\" data-end=\"1623\" data-col-size=\"md\">Details<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1652\" data-end=\"2081\">\n<tr data-start=\"1652\" data-end=\"1714\">\n<td data-start=\"1652\" data-end=\"1664\" data-col-size=\"sm\">Payee<\/td>\n<td data-col-size=\"md\" data-start=\"1664\" data-end=\"1714\">Project Office of a Foreign Company (in India)<\/td>\n<\/tr>\n<tr data-start=\"1715\" data-end=\"1769\">\n<td data-start=\"1715\" data-end=\"1735\" data-col-size=\"sm\">Tax Residency<\/td>\n<td data-col-size=\"md\" data-start=\"1735\" data-end=\"1769\">Non-Resident (Foreign Company)<\/td>\n<\/tr>\n<tr data-start=\"1770\" data-end=\"1845\">\n<td data-start=\"1770\" data-end=\"1795\" data-col-size=\"sm\">Applicable Section<\/td>\n<td data-col-size=\"md\" data-start=\"1795\" data-end=\"1845\">Section 195 \u2013 TDS on payments to non-residents<\/td>\n<\/tr>\n<tr data-start=\"1846\" data-end=\"1894\">\n<td data-start=\"1846\" data-end=\"1870\" data-col-size=\"sm\">Nature of Payment<\/td>\n<td data-col-size=\"md\" data-start=\"1870\" data-end=\"1894\">Technical Fees (FTS)<\/td>\n<\/tr>\n<tr data-start=\"1895\" data-end=\"1953\">\n<td data-start=\"1895\" data-end=\"1910\" data-col-size=\"sm\">TDS Rate<\/td>\n<td data-col-size=\"md\" data-start=\"1910\" data-end=\"1953\">20% + surcharge + cess (or as per DTAA)<\/td>\n<\/tr>\n<tr data-start=\"1954\" data-end=\"1989\">\n<td data-start=\"1954\" data-end=\"1977\" data-col-size=\"sm\">Form 15CA \/ 15CB<\/td>\n<td data-col-size=\"md\" data-start=\"1977\" data-end=\"1989\">Required<\/td>\n<\/tr>\n<tr data-start=\"1990\" data-end=\"2081\">\n<td data-start=\"1990\" data-end=\"2003\" data-col-size=\"sm\">Reason<\/td>\n<td data-start=\"2003\" data-end=\"2081\" data-col-size=\"md\">Payment ultimately to non-resident entity; taxable under Section 9(1)(vii)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Payments to Project Office (PO) of a Foreign Company in India Treatment of Payments to Project Offices of Foreign Companies in India under TDS &amp; Form 15CA\/15CB compliance: Payments made to a Project Office of a foreign company in India attract TDS u\/s 195 of the Income Tax Act, 1961, and require compliance with Form &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[159],"tags":[10359],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30375"}],"collection":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/comments?post=30375"}],"version-history":[{"count":3,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30375\/revisions"}],"predecessor-version":[{"id":30378,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/30375\/revisions\/30378"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=30375"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=30375"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=30375"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}