{"id":500,"date":"2015-10-24T10:34:20","date_gmt":"2015-10-24T10:34:20","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=500"},"modified":"2021-12-15T15:26:23","modified_gmt":"2021-12-15T09:56:23","slug":"corporate-tax-update-for-the-month-4","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/","title":{"rendered":"Foreign Subsidiary Company Compliances 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-69d728f453cd7\" 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-69d728f453cd7\"  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\/corporate-tax-update-for-the-month-4\/#FOREIGN_SUBSIDIARY_COMPANY\" title=\"FOREIGN SUBSIDIARY COMPANY\">FOREIGN SUBSIDIARY COMPANY<\/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\/corporate-tax-update-for-the-month-4\/#FOREIGN_COMPANY_COMPLIANCES\" title=\"FOREIGN COMPANY COMPLIANCES\">FOREIGN COMPANY COMPLIANCES<\/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\/corporate-tax-update-for-the-month-4\/#FOREIGN_SUBSIDIARY_COMPLIANCES_IN_INDIA\" title=\"FOREIGN\u00a0SUBSIDIARY\u00a0COMPLIANCES IN INDIA\">FOREIGN\u00a0SUBSIDIARY\u00a0COMPLIANCES IN INDIA<\/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\/corporate-tax-update-for-the-month-4\/#Essential_Compliances_for_Foreign_Subsidiary_Company_in_India\" title=\"Essential Compliances for Foreign Subsidiary Company in India \n\">Essential Compliances for Foreign Subsidiary Company in India \n<\/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\/corporate-tax-update-for-the-month-4\/#COMPLIANCES_UNDER_INCOME_TAX_ACT_AND_GST_ACT\" title=\"COMPLIANCES UNDER INCOME TAX\u00a0ACT\u00a0AND GST ACT\">COMPLIANCES UNDER INCOME TAX\u00a0ACT\u00a0AND GST ACT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Periodic_Compliances\" title=\"Periodic Compliances:\">Periodic Compliances:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Annual_Compliances\" title=\"Annual Compliances:\">Annual Compliances:<\/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\/corporate-tax-update-for-the-month-4\/#Event-based_Compliances\" title=\"Event-based Compliances:\">Event-based Compliances:<\/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\/corporate-tax-update-for-the-month-4\/#There_are_two_event-based_compliances_under_the_RBI_regulations_and_FEMA_guidelines_they_are\" title=\"There are two event-based compliances under the RBI regulations and FEMA guidelines, they are:\">There are two event-based compliances under the RBI regulations and FEMA guidelines, they are:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#IMPORTANCE_OF_OTHER_COMPANY_OTHER_INCOME_TAX_COMPLIANCES\" title=\"IMPORTANCE OF OTHER COMPANY &amp; OTHER INCOME TAX COMPLIANCES\">IMPORTANCE OF OTHER COMPANY &amp; OTHER INCOME TAX COMPLIANCES<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Company_Act\" title=\"Company Act: \">Company Act: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Income_Tax_Act\" title=\"Income Tax Act: \">Income Tax Act: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#TRANSFER_PRICING\" title=\"TRANSFER PRICING\">TRANSFER PRICING<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#PENALTY_FOR_FAILING_TO_FURNISH_CA_REPORT\" title=\"PENALTY FOR FAILING TO FURNISH CA REPORT\">PENALTY FOR FAILING TO FURNISH CA REPORT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#NOT_MAINTAINING_DOCUMENTS_PENALTY\" title=\"NOT MAINTAINING DOCUMENTS PENALTY\u00a0\">NOT MAINTAINING DOCUMENTS PENALTY\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#PENALTY_FOR_NOT_PRODUCING_DOCUMENTS\" title=\"PENALTY FOR NOT PRODUCING DOCUMENTS\">PENALTY FOR NOT PRODUCING DOCUMENTS<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Procedures_for_the_conversion_of_partnership_firm_into_Private_limited_company\" title=\"Procedures for the conversion of partnership firm into Private limited company\">Procedures for the conversion of partnership firm into Private limited company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Conversion_of_LLP_into_Company_Limited_by_Shares\" title=\"Conversion of LLP into Company Limited by Shares\">Conversion of LLP into Company Limited by Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Everything_that_you_need_to_know_about_LLP\" title=\"Everything that you need to know about LLP\">Everything that you need to know about LLP<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Key_takeaway_on_the_conversion_of_LLP\" title=\"Key takeaway on the conversion of LLP\u00a0 \u00a0 \">Key takeaway on the conversion of LLP\u00a0 \u00a0 <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#LLP_Incorporation_and_Annual_Compliances\" title=\"LLP Incorporation and Annual Compliances\">LLP Incorporation and Annual Compliances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/carajput.com\/blog\/corporate-tax-update-for-the-month-4\/#Post-Incorporation_Compliances_Filling_of_LLP\" title=\"Post-Incorporation Compliances Filling of LLP\">Post-Incorporation Compliances Filling of LLP<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/TYPES-OF-SUBSIDIARY-COMPANY-IN-INDIA.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-13201\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/TYPES-OF-SUBSIDIARY-COMPANY-IN-INDIA.jpg\" alt=\"\" width=\"951\" height=\"496\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/TYPES-OF-SUBSIDIARY-COMPANY-IN-INDIA.jpg 600w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/TYPES-OF-SUBSIDIARY-COMPANY-IN-INDIA-300x157.jpg 300w\" sizes=\"(max-width: 951px) 100vw, 951px\" \/><\/a><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"FOREIGN_SUBSIDIARY_COMPANY\"><\/span><span style=\"color: #ff0000;\"><strong>FOREIGN SUBSIDIARY COMPANY<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>A foreign\u00a0subsidiary\u00a0is any company, where 50% or more of its equity shares are owned by\u00a0a corporation\u00a0that&#8217;s\u00a0incorporated in another foreign nation.<\/li>\n<li>The said foreign company in such a case\u00a0is termed\u00a0the\u00a0company\u00a0or the parent company.<\/li>\n<li>For\u00a0a corporation\u00a0to be\u00a0a far-off\u00a0subsidiary\u00a0in India,\u00a0the corporate\u00a0itself must be incorporated in India. It\u00a0doesn&#8217;t\u00a0matter which country the parent company is incorporated in.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/Foreign-Subsidiary-Company-Compliances-in-India.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-13197\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/Foreign-Subsidiary-Company-Compliances-in-India.jpg\" alt=\"Foreign Subsidiary Company Compliances in India\" width=\"940\" height=\"494\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/Foreign-Subsidiary-Company-Compliances-in-India.jpg 310w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/Foreign-Subsidiary-Company-Compliances-in-India-300x158.jpg 300w\" sizes=\"(max-width: 940px) 100vw, 940px\" \/><\/a><\/p>\n<h3><span class=\"ez-toc-section\" id=\"FOREIGN_COMPANY_COMPLIANCES\"><\/span><span style=\"color: #000080;\"><strong>FOREIGN COMPANY COMPLIANCES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>An India-based subsidiary of any Foreign Company [as defined under section 2(42) of the Indian Companies Act, 2013]\u00a0may have\u00a0to perform\u00a0the subsequent\u00a0three categories of statutory compliances with Indian regulatory authorities:<\/li>\n<li>Periodic Compliance<\/li>\n<li>Annual Compliance<\/li>\n<li>Event Based Compliance<\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Additionally,\u00a0the kinds\u00a0and nature\u00a0of those\u00a0compliances\u00a0rely on\u00a0the assorted\u00a0factors<\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Type of company and its incorporation,<\/li>\n<li>Industry type and its market size,<\/li>\n<li>The number of its employees,<\/li>\n<li>Annual sales turnover.<\/li>\n<li>Now, In India, the compliance regime has been made very strict particularly since the promulgation of the new Indian Companies Act of 2013 .<\/li>\n<li>Every one amendments made thereto within the cases of delayed compliances or failures in statutory compliances advocates for heavy fines, penalties, and punishments including imprisonment.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ol start=\"5\">\n<li>Also,\u00a0the categories\u00a0and nature\u00a0of those\u00a0compliances do\u00a0depend upon\u00a0the kind\u00a0of company and its incorporation, industry type, its market size,\u00a0the amount\u00a0of its employees, and its annual sales turnover.<\/li>\n<li>Now, particularly since promulgation of\u00a0the businesses\u00a0Act 2013\u00a0and every one\u00a0amendment made thereto\u00a0thus far, the compliance regime in India has been made very strict and rigorous, and advocates for heavy fines, penalties, and punishments (including imprisonment)\u00a0within the\u00a0cases of delayed compliances or failures in statutory compliances.<\/li>\n<li>Compliances are\u00a0supported\u00a0many aspects of\u00a0the corporate. One must understand what all compliances are\u00a0alleged to\u00a0be met\u00a0consistent with\u00a0the sort\u00a0of company\u00a0that&#8217;s\u00a0incorporated, the industry of operations, annual turnover, number of employees.<\/li>\n<li>\u00a0A remote company is defined under section 2(42) of the businesses Act, 2013, such an organization must follow regulations and rules established under multiple legislations and orders such as:<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"FOREIGN_SUBSIDIARY_COMPLIANCES_IN_INDIA\"><\/span><span style=\"color: #000080;\"><strong>FOREIGN\u00a0SUBSIDIARY\u00a0COMPLIANCES IN INDIA<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>All companies established in India must follow\u00a0the principles\u00a0and regulations\u00a0founded\u00a0by\u00a0the govt.\u00a0this can be\u00a0in effect,\u00a0no matter\u00a0whether Indian or Foreign entities or citizens own\u00a0the businesses.<\/li>\n<li>The sole difference between the 2 is that foreign-owned subsidiary companies have more rules and regulations to treat compared to Indian owned companies.<\/li>\n<li>A company where 50% or more of its equity shares are owned by\u00a0a distant\u00a0company\u00a0may be a\u00a0foreign\u00a0company. The foreign company in such case\u00a0is named\u00a0the\u00a0company\u00a0or the parent company.<\/li>\n<li>Compliances are\u00a0supported\u00a0the corporate\u00a0that&#8217;s\u00a0incorporated. Hence,\u00a0it&#8217;s\u00a0necessary\u00a0to grasp\u00a0what compliances are\u00a0purported to\u00a0be met\u00a0in keeping with\u00a0the kind\u00a0of\u00a0the corporate, the operations of the industry, annual turnover, number of employees, etc.<\/li>\n<li>Foreign subsidiary companies are mandatorily required\u00a0to keep up\u00a0compliance\u00a0in keeping with\u00a0the\u00a0taxation\u00a0Act, Companies Act, Transfer pricing guidelines, and FEMA guidelines.<\/li>\n<li>The foreign subsidiary compliance includes\u00a0taxation\u00a0filing with the\u00a0revenue enhancement\u00a0department, annual return with the ministry of corporate affairs, and other filings with the authorities\u00a0just like the\u00a0bank\u00a0of India or the securities and exchange board of India (<a href=\"https:\/\/www.caindelhiindia.com\/blog\/sebi-investment-advisors-amendment-regulations-2020\/\">SEBI<\/a>).<\/li>\n<li>All\u00a0the businesses\u00a0even foreign subsidiaries will\u00a0must\u00a0befits\u00a0other Indian tax regulations\u00a0just like the\u00a0TDS, GST regulation, PF regulation, ESI regulations, and others.<\/li>\n<li>The compliance requirement for\u00a0a remote\u00a0company\u00a0would differ\u00a0supported\u00a0the industry, state of incorporation, number of employees, and sales turnover.<\/li>\n<\/ul>\n<p>Foreign Direct Investment of up to 100% is allowed into an Indian private\u00a0Ltd.\u00a0and\u00a0Ltd.\u00a0for many\u00a0of\u00a0the arena.<\/p>\n<p>The number of FDI in India has increased manifold over the previous couple of years thanks to a booming economy and welcoming environment for foreign investors.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Essential_Compliances_for_Foreign_Subsidiary_Company_in_India\"><\/span><span style=\"color: #000080;\"><strong>Essential Compliances for Foreign Subsidiary Company in India<br \/>\n<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-18404\" src=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-scaled.jpg\" alt=\"ESTABLISHMENT OF FOREIGN COMPANY\" width=\"2560\" height=\"1157\" srcset=\"https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-scaled.jpg 2560w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-300x136.jpg 300w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-1024x463.jpg 1024w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-768x347.jpg 768w, https:\/\/carajput.com\/blog\/wp-content\/uploads\/2015\/10\/ESTABLISHMENT-OF-FOREIGN-COMPANY_11zon-1536x694.jpg 1536w\" sizes=\"(max-width: 2560px) 100vw, 2560px\" \/><\/p>\n<ol>\n<li>The following are the more important compliances that\u00a0should\u00a0be met by the foreign\u00a0subsidiary\u00a0as per Section 380 and 381 of\u00a0the businesses\u00a0Act, 2013.<\/li>\n<li>In Form FC-1 under Section 380: The FC-1 form is very important because the form has got to be filed within thirty days of the incorporation of the subsidiary in India.<\/li>\n<li>Shape isn&#8217;t to be submitted alone, it must be in the course of the desired files, certifications etc. from other regulatory bodies in India like the RBI.<\/li>\n<li>In case of Form FC-3 under Section 380: this way must be submitted to the respective Registrar of Companies (ROC) depending upon where the corporate is incorporated in India.<\/li>\n<li>A shape must contain the small print of the areas where the business goes to conduct operations additionally because the financial records of the corporate.<\/li>\n<li>Form FC-4 under Section 381:\u00a0this manner\u00a0is anxious\u00a0with the annual returns of\u00a0the corporate.\u00a0it&#8217;s\u00a0to be filed within sixty days from\u00a0the tip\u00a0of the preceding\u00a0year.<\/li>\n<li>Financial statements: the corporate should submit financial statements on its Indian business and operations. This must be submitted within six months of the top of the year.<\/li>\n<li>They have to contain: \u2013 Statements on the transfer of funds \u2013 Statements of earnings repatriated \u2013 Statements on related party transactions like statements on sales, transfer of property, purchases etc.<\/li>\n<li>Audit of accounts: All accounts of the foreign\u00a0subsidiary\u00a0must be audited by a Practicing\u00a0comptroller. These accounts should be properly arranged and made available by\u00a0the corporate\u00a0for the audit.<\/li>\n<li>Authentication and translation of documents: All the documents that are submitted by the corporate to the ROC must be validated by a practicing lawyer in India.<\/li>\n<li>These documents also must be translated into English before its validation and submission.<\/li>\n<\/ol>\n<h3><span class=\"ez-toc-section\" id=\"COMPLIANCES_UNDER_INCOME_TAX_ACT_AND_GST_ACT\"><\/span><span style=\"color: #000080;\"><strong>COMPLIANCES UNDER INCOME TAX\u00a0ACT\u00a0AND GST ACT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>There are three\u00a0styles of\u00a0compliances\u00a0supported\u00a0the intermittency\u00a0of those\u00a0compliances:<\/p>\n<ol>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Periodic_Compliances\"><\/span><span style=\"color: #ff6600;\"><strong>Periodic Compliances:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Periodic compliances are compliances that\u00a0must\u00a0be met by\u00a0the corporate\u00a0on a periodic basis.<\/p>\n<p style=\"padding-left: 40px;\">Unlike annual compliances,\u00a0this sort\u00a0of compliance happens in regular intervals multiple times a year. These compliances\u00a0may have\u00a0to be met on a quarterly or a half-yearly basis.<\/p>\n<ol start=\"2\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Annual_Compliances\"><\/span><span style=\"color: #ff6600;\"><strong>Annual Compliances:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">Annual compliance to be done by foreign company through out the year. Annual compliances are compliance that\u00a0must\u00a0be met once\u00a0each year.<\/p>\n<p style=\"padding-left: 40px;\">once a year\u00a0the corporate\u00a0has got to\u00a0meet these compliances mandatorily.<\/p>\n<p style=\"padding-left: 40px;\">As an example, the corporate needs to do the subsequent every year: \u2013 GST filings \u2013 TDS filings under the revenue enhancement Act \u2013 Compliances under RBI \u2013 Compliances under SEBI\u2019s rules and regulations \u2013 Annual Financial Statements<\/p>\n<ol start=\"3\">\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Event-based_Compliances\"><\/span><span style=\"color: #ff6600;\"><strong>Event-based Compliances:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ol>\n<p style=\"padding-left: 40px;\">As mentioned earlier, there are three\u00a0sorts of\u00a0compliances;\u00a0one among\u00a0them is event-based.\u00a0this suggests\u00a0that these compliances are only mandatory\u00a0just in case\u00a0of\u00a0a specific\u00a0event or action of\u00a0the corporate.<\/p>\n<h3 style=\"padding-left: 40px;\"><span class=\"ez-toc-section\" id=\"There_are_two_event-based_compliances_under_the_RBI_regulations_and_FEMA_guidelines_they_are\"><\/span><span style=\"color: #000080;\"><strong>There are two event-based compliances under the RBI regulations and FEMA guidelines, they are:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>FC-TRS: This concerns the transfer of foreign subsidiary company\u2019s shares between an Indian resident to a non-resident investor or vice-versa.<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Such a transfer could also be done by way of sale or gift. Under the Foreign Direct Investment policies, such a transaction is required to be reported within sixty days from the date of the transfer.<\/li>\n<li>Duty of filing this kind rests upon the Indian resident, or the investee company because the case could also be.<\/li>\n<li>This is often irrespective of whether the Indian resident is that the transferer or the transferee.<\/li>\n<li>The reporting of transfer of shares between Residents and Non-residents and vice- versa is to be made\u00a0and may\u00a0be reported within 60 days from the date of receipt\/date of payment of\u00a0the number\u00a0of considerations.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #ff9900;\"><strong>While filing the above form, the following documents shall be attached &#8211;<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Relevant regulatory approvals and relevant extracts of the transfer agreement,<\/li>\n<li>The Transfer Consent letter undertaken between the donor and donee,<\/li>\n<li>Declaration by Non-resident\u00a0within the\u00a0prescribed format<\/li>\n<li>Consent letter between buyer and seller or\u00a0just in case\u00a0of sale\/ purchase on the\u00a0exchange, the contract note should be attached.<\/li>\n<li>Valuation certificate<\/li>\n<li>Non-resident declaration<\/li>\n<li>Where the sale is undertaken by a non-resident, an acknowledgment of FC-GPR\/ FC-TRS as required in respect of the capital instruments being sold<\/li>\n<li>FIRC \/Outward remittance certificate and KYC<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>2. FC-GPR: this is often concerning the remittance received by the shareholders of an overseas company<\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>The shape specifies the mode of transfer of the remittance by the corporate to its shareholders. FC-GPR-In FC-GPR, the foreign inward remittance concerning the difficulty of share capital to the foreign investor is reported.<\/li>\n<li>Shape specifies the assorted mode of payment for the consideration received from investor through banking channel, NRE \/ FCNR, Escrow A\/c, Swap, etc.<\/li>\n<li>The banking channels are generally used for such transactions. While filing the shape FC-GPR, following documents are required to be attached:\n<ul>\n<li>KYC of foreign investor<\/li>\n<li>Company Secretary Certificate<\/li>\n<li>Declaration by the authorized representative of the Indian company as per FEMA.<\/li>\n<li>Valuation certificate from SEBI registered Merchant Banker \/\u00a0accountant\u00a0\/Cost accountant or\u00a0the other\u00a0person as authorized under FEMA 20(R)<\/li>\n<li>Foreign Inward Remittance Certificate<\/li>\n<li>Other documents as applicable on case-to-case basis.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"IMPORTANCE_OF_OTHER_COMPANY_OTHER_INCOME_TAX_COMPLIANCES\"><\/span><span style=\"color: #ff6600;\"><strong>IMPORTANCE OF OTHER COMPANY &amp; OTHER INCOME TAX COMPLIANCES<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<h3><span class=\"ez-toc-section\" id=\"Company_Act\"><\/span><span style=\"color: #000080;\"><strong>Company Act: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li>It is mandatory for\u00a0an overseas\u00a0subsidiary\u00a0to satisfy\u00a0all compliances as there\u00a0is\u00a0severe consequences if they fail\u00a0to try too\u00a0so.<\/li>\n<li>Failure to fulfill required compliances may end in the corporate being fined, being levied penalties and might also cause criminal charges with imprisonment under relevant provisions of applicable law(s).<\/li>\n<li>The subsequent are the penalties that will be levied against an organization for not meeting their compliances:<\/li>\n<\/ol>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Notwithstanding anything given under Section 391, if\u00a0a distant\u00a0company is found\u00a0to own\u00a0contravened any provisions under Chapter XXII of the Act,\u00a0the corporate\u00a0is\u00a0punished by way of fine that shall be no\u00a0but\u00a0Rs 1 lakh\u00a0and should\u00a0extend up to Rs 3 lakh.<\/li>\n<li>If the offence\u00a0is continuous, then a fine of Rs 50,000\u00a0are going to be\u00a0added\u00a0for each\u00a0day, the offence continues.<\/li>\n<li>Every officer of\u00a0a distant\u00a0company who is in default is punishable by imprisonment for a period of up\u00a0to six\u00a0months and\/or a fine of minimum Rs 25,000,\u00a0which can\u00a0reach\u00a0up to Rs 5 lakh.<\/li>\n<li>It&#8217;s important for an organization to satisfy all its compliances to make sure that they&#8217;re ready to continue with its business operations properly without the interference of the authorities.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Income_Tax_Act\"><\/span><strong><span style=\"color: #000080;\">Income Tax Act<\/span>: <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"TRANSFER_PRICING\"><\/span><span style=\"color: #ff9900;\"><strong>TRANSFER PRICING<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>Each person engaging in an international transaction or a defined domestic transaction is required by the Income Tax Act to acquire a report from a chartered accountant in the prescribed form and submit it to the Income Tax Department.<\/p>\n<p>Failure to deliver a report from a chartered accountant in the manner specified above carries a penalty of Rs. 1,000,000.<\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"PENALTY_FOR_FAILING_TO_FURNISH_CA_REPORT\"><\/span><span style=\"color: #ff9900;\"><strong>PENALTY FOR FAILING TO FURNISH CA REPORT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>A chartered accountant&#8217;s report is essential for entities engaging in foreign transactions.<\/p>\n<p>A penalty of Rs. 1,00,000 might be imposed if a chartered accountant&#8217;s report is not submitted.<\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"NOT_MAINTAINING_DOCUMENTS_PENALTY\"><\/span><span style=\"color: #ff9900;\"><strong>NOT MAINTAINING DOCUMENTS <\/strong><\/span><span style=\"color: #ff9900;\"><strong>PENALTY\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>As previously stated, entities engaging in foreign transactions must maintain the documentation indicated above. Where non-compliance exists, failure to keep such documents up to date, as well as failure to disclose or furnish disinformation, can result in a penalty of up to 2% of the transaction value.<\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"PENALTY_FOR_NOT_PRODUCING_DOCUMENTS\"><\/span><span style=\"color: #ff9900;\"><strong>PENALTY FOR NOT PRODUCING DOCUMENTS<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p>Any individual who has engaged in overseas transactions may be required to provide any associated information or document by tax authorities during the course of any case.<\/p>\n<p>Failure to provide any important information will result in a penalty of up to 2% of the transaction value for each such failure.<\/p>\n<p style=\"text-align: justify;\">For query or help, contact: singh@carajput.com\u00a0or call at 9555555480<\/p>\n<p><strong>Popular Articles :<\/strong><\/p>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Procedures_for_the_conversion_of_partnership_firm_into_Private_limited_company\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/procedures-for-conversion-of-partnership-firm-to-private-company\/\">Procedures for the conversion of partnership firm into Private limited company<\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Conversion_of_LLP_into_Company_Limited_by_Shares\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/conversion-of-llp-into-company-limited-by-shares\/\">Conversion of LLP into Company Limited by Shares<\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Everything_that_you_need_to_know_about_LLP\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/everything-that-you-need-to-know-about-limited-liability-partnership\/\">Everything that you need to know about LLP<\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Key_takeaway_on_the_conversion_of_LLP\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/key-takeaways-on-conversion-of-partnership-firm-into-llp\/\">Key takeaway on the conversion of LLP\u00a0 \u00a0 <\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"LLP_Incorporation_and_Annual_Compliances\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/limited-liability-partnership-llps-requirements-at-the-time-of-incorporation\/\">LLP Incorporation and Annual Compliances<\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Post-Incorporation_Compliances_Filling_of_LLP\"><\/span><em><a href=\"https:\/\/carajput.com\/blog\/major-compliances-due-date-of-annual-filings-of-every-limited-liability-partnerships-llps-for-the-year-2017-18\/\">Post-Incorporation Compliances Filling of LLP<\/a><\/em><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>FOREIGN SUBSIDIARY COMPANY A foreign\u00a0subsidiary\u00a0is any company, where 50% or more of its equity shares are owned by\u00a0a corporation\u00a0that&#8217;s\u00a0incorporated in another foreign nation. The said foreign company in such a case\u00a0is termed\u00a0the\u00a0company\u00a0or the parent company. For\u00a0a corporation\u00a0to be\u00a0a far-off\u00a0subsidiary\u00a0in India,\u00a0the corporate\u00a0itself must be incorporated in India. It\u00a0doesn&#8217;t\u00a0matter which country the parent company is incorporated in. &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9027],"tags":[9969],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/500"}],"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=500"}],"version-history":[{"count":5,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/500\/revisions"}],"predecessor-version":[{"id":18589,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/posts\/500\/revisions\/18589"}],"wp:attachment":[{"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/media?parent=500"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/categories?post=500"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/carajput.com\/blog\/wp-json\/wp\/v2\/tags?post=500"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}