India corporate tax rate for foreign companies (2026): subsidiary vs branch vs PE vs no presence

Last updated October 2026: rates per the Finance Act 2026 for tax year 2026-27.

Short answer: India's corporate tax rate for tax year 2026-27 is 25.17% for an Indian company on the concessional regime (22% plus surcharge and cess), and up to 38.22% for a foreign company taxed through a branch, project office or other permanent establishment (PE) [1][4]. With no Indian presence and no PE, India taxes royalties, technical fees and interest only by gross withholding: 20.8%–21.84%, or 10%–15% under most treaties [10]. For a UK or most European parents a distributing subsidiary costs about 32.65% in Indian tax (36.39% for a US parent) against 38.22% for a branch, so a subsidiary is the default and a branch needs a specific reason.

Who this is for: CFOs, heads of tax and general counsel of UK, US and European groups deciding how to operate in India, and the advisers who introduce them.

India corporate tax rate 2026: the numbers foreign companies need

Corporate tax in India is now charged under the Income-tax Act 2025, which replaced the 1961 Act from 1 April 2026; tax year 2026-27 rates come from the Finance Act 2026 [1][11].

Surcharge applies above INR 1 crore and INR 10 crore of total income, with marginal relief at each threshold [1][2][3]. Treaty rates are applied without surcharge or cess [10].

• Foreign companies cannot use the 22% regime, which is open only to domestic companies and irrevocable [4].
• MAT is now a final tax: no new credit accrues. Section 200 companies and treaty-resident foreign companies without a PE are outside it [5].
• Closed incentives: the 15% manufacturing regime (production by 31 March 2024) and the SEZ holiday, closed to units that began operations after 31 March 2020 (30 September 2020 for units with a letter of approval by 31 March 2020); existing units keep their remaining years under s.144 [16][17][39][40].

Foreign company tax rate in India by operating model

Wholly owned subsidiary: setting up a company in India

A private limited company is the usual vehicle for doing business in India, including most global capability centres (GCCs). It can do anything its sector's FDI rules allow, ring-fences the parent's liability and is the only model with the 25.168% rate; dividends then bear withholding [4][10]. For the entry route, see FDI in India: rules, routes and approvals (2026) (ATB Legal).

Branch office: how branch office India tax works

A branch needs bank approval (Form FNC), and the parent needs five years of profits and net worth of at least USD 100,000 [8]. It may trade, consult, research and provide IT or technical support, but outside an SEZ it may not manufacture, process or retail [8][27].

Branch profits bear 35% plus surcharge and cess (38.22% above INR 10 crore), with MAT at 14% of book profit as a floor [1][5]. Head-office executive and general administration costs are deductible only up to 5% of adjusted total income (s.60, formerly s.44C) [6]. In DCIT (IT) v American Express Bank Ltd ([2025] 181 taxmann.com 433) the Supreme Court applied the cap even to such costs incurred exclusively for the branch, but only within the enumerated heads; direct operating costs are not capped [12]. Profits are remitted net of Indian tax on audited accounts and an accountant's certificate (FEMA 22(R), regulation 4), and India levies no branch-profits or remittance tax [27][41].

Project office and liaison office

A project office executes one Indian contract and is normally a PE taxed like a branch, unless its work is purely preparatory or auxiliary (Samsung Heavy Industries, Supreme Court 2020) [35]. A liaison office (LO) may promote the parent but "cannot earn any income in India" [8]; it files Form 162 within eight months of the tax-year end (s.505) [7]. An LO whose staff negotiate or conclude sales exceeds its permission and risks a PE [8][18].

No Indian presence: gross withholding, and when a PE arises

Without a treaty PE, selling or licensing from abroad creates no Indian tax on profits, but India withholds on the gross amount of royalties and fees for technical services (FTS): 20.8%–21.84%, or the treaty rate (UK and US 15%; most EU states 10%) with a tax residency certificate (TRC) and Form 41, which replaced Form 10F [10][20]. Under the UK, US and Dutch treaties a service is FTS if ancillary to a royalty or equipment hire or, otherwise, only if it "makes available" know-how the Indian customer can then apply on its own; the UAE treaty has no FTS article [18][23][24].

"No presence" is not free. Significant economic presence (s.9(9)(d), Rule 13: INR 2 crore of payments or 300,000 users) catches non-treaty residents [28]; a company whose place of effective management is in India is Indian-resident on worldwide income (s.6(10)) [29]; and the customer self-assesses IGST, 18% for most services, under reverse charge, creditable only if it makes taxable supplies [42][43]. Two narrow exemptions exist for foreign companies supplying capital goods or, from 1 October 2026, bonded-warehouse components to Indian electronics contract manufacturers (Schedule IV, to 2041) [55]. Staff, secondees or an employer of record (EOR) in India can create a PE: see Permanent establishment in India (employees, EOR, agents).

GIFT City IFSC and SEZ units

A GIFT City International Financial Services Centre (IFSC) unit can deduct 100% of qualifying income for 20 of 25 tax years (s.147, widened from 10 of 15 by the Finance Act 2026), and s.200(4) lets a subsidiary on the 22% regime keep that deduction; after the holiday the unit's business income is taxed at a 15% base rate [4][15][44][58]; branch units pay 9% MAT and IFSC dividends bear 10% [5][10]. See GIFT City tax (ATB Legal). New non-IFSC SEZ units get customs and GST benefits only [16].

Decision table: subsidiary vs branch vs project office vs liaison office vs no presence

Sources: [1][4][5][7][8][10][15][16][27][41][44].

Worked example: INR 20 crore of Indian profit, all distributed

Illustrative only. FX: INR 127 = GBP 1, INR 96 = USD 1, INR 107 = EUR 1 (FBIL reference rates, 12 October 2026, rounded) [62]. A software group expects Indian pre-tax profit of INR 20 crore a year (about GBP 1.57m, USD 2.08m or EUR 1.87m) and pays it all out, so the top surcharge band applies. Treaty rates assume a TRC, Form 41, beneficial ownership and the treaty's anti-abuse test: the principal purpose test (PPT) for the UK, UAE, Dutch and most EU treaties (Germany only added its India treaty to its MLI list by a law gazetted on 5 June 2026; the change needs a further application act and is not expected to bite before 2027, so for now GAAR alone applies [45][46]), limitation on benefits for the US [20][23].

A subsidiary saves a UK parent INR 1.11 crore (about GBP 88,000) a year and a US parent INR 0.37 crore (about USD 38,000) [1][4][10][23].

Break-even rule. Total subsidiary cost is 25.168% + (74.832% × w), where w is the dividend withholding rate. That equals the 38.22% branch rate at w = 17.4%, 37.13% at w = 16.0% and 36.4% at w = 15.0%. Any treaty rate of 15% or less therefore favours the subsidiary; at 15% with profit under INR 1 crore, the two tie.

Branch add-on. If head office allocates INR 1.2 crore of enumerated administration cost against adjusted total income of INR 20 crore, only INR 1.0 crore (5%) is deductible; the extra INR 0.2 crore costs INR 7.6 lakh in tax [6]. MAT (15.29% of book profit) bites only if taxable profit falls below about 40% of book profit [5].

The no-presence trap. A UK parent invoices an Indian customer INR 20 crore for technical services costing INR 15 crore: margin INR 5 crore. If know-how is made available, India withholds 15% of the gross: INR 3.0 crore, or 60% of the margin (87% at the domestic 21.84%) [10][18]. UK credit is capped at the UK tax on the margin (25% = INR 1.25 crore), so INR 1.75 crore (about GBP 138,000) is never relieved [19]. An Indian subsidiary earning the same margin costs INR 1.63 crore all-in. If no know-how is made available and there is no PE, India taxes nothing. The substance of what is delivered decides the result, not the contract's label: courts examine deliverables and evidence (Tungsten Automation, Delhi High Court 2025; Ernst & Young U.S. LLP, Delhi High Court 2026) [30][31][60].

The repatriation layer: dividends, buy-backs and exit

Treaty dividend rates: 10% for the UK, UAE, Germany, France, the Netherlands, Switzerland, Ireland, Sweden, Finland and Norway; 15% for Belgium and Spain; 15% or 25% for the US (10% of voting stock), Italy (10%) and Denmark (25%), depending on holding [10][38].

Buy-backs are capital gains from 1 April 2026, but a buy-back under s.68 of the Companies Act from a promoter (for an unlisted company, anyone holding more than 10%, so a foreign parent) bears an additional 17.5% on long-term gains on top of the 12.5% rate: 30% of the gain before surcharge and cess, about 34% all-in with the 12% surcharge on the additional tax (s.69) [21][37][57]. A buy-back is therefore rarely a cheap exit from a wholly owned subsidiary; a sale of unlisted shares held over 24 months bears 13.0%–13.65% [22]. See India withholding tax rates 2026 and how to repatriate profits.

The home-country layer: UK, US, EU and UAE parents

• UK. Subsidiary dividends are usually exempt, so the 10% withholding is a final cost [26]. Branch profits bear 25% UK tax with credit, leaving about 13 points of Indian tax unrelieved, though early branch losses can shelter UK profits; an irrevocable s.18A exemption election makes 38.22% final and forgoes that loss relief [13].
• US. Section 245A gives a 100% dividends-received deduction but no credit for the 15% withholding [14]. Branch income sits in a separate credit basket capped at 21%, wasting about 17 points; early losses face the dual-consolidated-loss rules. Subsidiary profits also enter net CFC tested income (NCTI, formerly GILTI: 40% deduction and a 90% credit for foreign tax from 2026), which Indian tax at 25% or more should largely cover; check with your US adviser [48].
• Germany, Netherlands, France, Switzerland. Participation exemptions (95% in Germany, 100% in the Netherlands) make the 10% withholding largely final, and both exempt foreign branch profits, so 38.22% is final too [49][50]; France and Switzerland work similarly; confirm with a local adviser.
• UAE. A UAE holding company typically receives Indian dividends free of UAE tax and bears 10% Indian withholding, if it is managed and controlled in the UAE and passes the PPT and Tiger Global substance test [24][32]. The India–UAE investment treaty (in force 31 August 2024) protects only investors with substantial business activity in the UAE (Article 1.5), excludes tax measures altogether (Article 2.4) and requires three years of Indian remedies before arbitration (Article 17) [33][34][54][63]. Article 36.1 of the India–UAE BIT also denies the treaty's benefits to an investor owned or controlled, directly or indirectly, by persons of a non-Party; read literally, a UAE holding company owned by a UK, US or European group is excluded whatever its substance, although no tribunal has yet ruled on the clause [54]. Choose it for treasury backed by real substance, or for treaty protection only where the group itself is UAE-owned or UAE-controlled, not for the dividend rate. See Invest in India: choosing a holding company jurisdiction (hub), which covers the treaty conditions in detail.

Transfer pricing India: what the Indian entity must document

Subsidiaries and branches (treated as separate enterprises) must price group dealings at arm's length and file Form 48 (formerly Form 3CEB; s.172) annually [11][51]. The safe harbour in the Income-tax Rules 2026 (notified 20 March 2026; rules 89 and 91, Form 49) accepts a 15.5% margin on cost for IT, ITeS, KPO and software R&D up to INR 2,000 crore of revenue, elected for five-year blocks [21][25][56]. Interest on related-party or guaranteed debt is deductible only up to 30% of EBITDA (s.177, formerly s.94B) [36], and parent loans must meet the external commercial borrowing rules (RBI Borrowing and Lending Regulations as amended from 16 February 2026: three-year minimum average maturity, market-based pricing at arm's length for a related-party lender, loan registration number before drawdown) [61]; see FEMA advisory.

Risks and common mistakes (ranked)

1. Choosing a branch for convenience. It costs 5.6 points more than a 10%-treaty subsidiary at scale and cannot manufacture, process or retail [1][8].
2. Mis-scoped services with no Indian entity. 15% on gross can exceed half the margin and is not fully creditable at home; what is actually delivered decides [18][19][31].
3. Accidental PE. Staff, secondees, an EOR or an LO that sells can create a PE taxed at up to 38.22%; no exclusive office is needed (Hyatt, Supreme Court, 24 July 2025) [35][59].
4. Missing treaty paperwork. Without a TRC and Form 41 at payment, 21.84% is withheld and recovery needs an Indian return [20]. See Form 10F (now Form 41) and tax residency certificate.
5. Pricing a promoter buy-back as a 13% exit [21].
6. Branch head-office charges above 5%, which are disallowed [6][12].
7. Planning on closed incentives (15% regime, SEZ holiday) [16][17].
8. Starting as a branch and converting later: capital gains on transferring the undertaking to the new company (slump sale, s.77; the tax-neutral conversion route exists only for foreign banks) [52][53], stamp duty, RBI closure and fresh FDI reporting. Start with the end-state vehicle.

Checklist to forward internally

1. List every planned Indian activity and check it against branch and LO limits [8].
2. Confirm the treaty dividend rate and eligibility (TRC, Form 41, beneficial ownership, PPT or LOB).
3. Model all three layers (Indian tax, repatriation, home-country tax) at your expected profit band.
4. Set distribution or retention policy and the exit route.
5. Map people in India (employees, secondees, EOR, agents) for PE risk.
6. Scope and document services so agreement, deliverables and evidence consistently show whether know-how is made available.
7. Set a transfer-pricing policy; test safe-harbour eligibility and the interest cap.
8. Confirm home-country exemption, credit, loss and CFC treatment.
9. Choose the holding jurisdiction, and test its substance, before incorporation.

How ATB Corporate can help

ATB Corporate advises companies and investors on entering, structuring and operating in India and the UAE: choosing the entry route and holding structure, tax and exchange-control planning, regulatory compliance, and setting up and running the local business. To discuss your plans, contact ATB Corporate.

FAQ

What is the corporate tax rate in India for foreign companies?

The corporate tax rate in India for a foreign company taxed through a branch, project office or other permanent establishment is 35% plus surcharge and 4% cess, an effective 36.4%–38.22% for tax year 2026-27. Surcharge is 2% above INR 1 crore of income and 5% above INR 10 crore. Foreign companies cannot use the 22% concessional regime, which is open only to Indian companies, so an Indian subsidiary can pay 25.168% instead [1][4].

What is the India corporate tax rate in 2026?

The India corporate tax rate for tax year 2026-27 is 25.168% for an Indian company on the s.200 concessional regime (22% plus 10% surcharge and 4% cess), or 26%–34.94% under the normal regime. A foreign company's branch or permanent establishment pays up to 38.22%. The rates come from the Finance Act 2026 and apply under the Income-tax Act 2025, which replaced the 1961 Act from 1 April 2026 [1][4][11].

Is a branch office or a subsidiary better for tax in India?

A subsidiary is usually better than a branch office for tax in India when the parent is in a treaty country. With a 10% treaty dividend rate, a subsidiary that distributes all its profit costs about 32.65% in total Indian tax, against 38.22% for a branch, and any treaty rate of 15% or less favours the subsidiary. A branch can make sense for credit-method parents in loss-making early years [1][10][13].

Is a GCC in India set up as a subsidiary or a branch?

A GCC in India is almost always set up as a subsidiary rather than a branch. The subsidiary can use the 25.168% concessional rate and the transfer-pricing safe harbour for IT, ITeS, KPO and software R&D, and it keeps the parent's liability ring-fenced. A branch pays up to 38.22% and cannot manufacture, process or retail outside an SEZ [1][4][8][25]. See India GCC structures.

Can a foreign company do business in India without setting up a company?

Yes, a foreign company can do business in India without setting up an Indian company, either by selling or licensing cross-border or through a branch, project or liaison office. Each route has limits: staff, agents or an employer of record in India can create a permanent establishment, significant economic presence can catch non-treaty residents, and India withholds tax on the gross amount of royalties and technical fees [8][10][28].

Do foreign companies pay minimum alternate tax (MAT) in India?

Foreign companies pay minimum alternate tax (MAT) in India only if they have a permanent establishment (PE) in India; treaty-resident foreign companies without a PE are outside it. MAT is 14% of book profit plus surcharge and cess (up to 15.29% for a foreign company) and is now a final cost, with no new credit. In practice it bites only if a branch's taxable profit falls below about 40% of its book profit [5].

How much tax is paid when profits are repatriated from India?

Profits repatriated from India as dividends bear 10%–15% withholding under most treaties, or 20.8%–21.84% without treaty relief, while a branch's profits bear no further Indian tax on remittance. A buy-back from a promoter, which includes a foreign parent holding more than 10% of an unlisted company, bears 30% of the gain before surcharge and cess, about 34% all-in, so it is rarely a cheap exit [10][27][37][41].

Related reading

• UK–India double tax treaty: guide for UK companies
• US–India tax treaty: guide for US companies
• India–UAE business structuring
• GCC operating model and entity in India
• Tax, transfer pricing and FEMA for foreign manufacturers in India
• India GIFT City
• Branch office vs liaison office in India (ATB Legal): https://atblegal.com/blog/doing-business-in-india/branch-office-vs-liaison-office-india/

Sources

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37. Income Tax Department, s.69 Income-tax Act 2025, sub-sections (2) and (3) as substituted by Act 4 of 2026 w.e.f. 1 April 2026 (s.69(1): buy-back consideration less cost is capital gains; where the holder is a promoter and the buy-back is under s.68 Companies Act 2013, additional tax of 2%/9.5% (domestic-company promoter) or 10%/17.5% (any other promoter) on short-/long-term gains; "promoter" for an unlisted company includes any person holding, directly or indirectly, more than 10% of the shares; accessed 12 October 2026) — https://www.incometaxindia.gov.in/w/section-69-127
38. Income Tax Department, "Tax Rates – DTAA v. Income-tax Act" (as amended by Finance Act 2026; dividend/interest/royalty/FTS grid for UK, US, UAE, Germany, France, Netherlands, Switzerland, Ireland, Sweden, Finland, Norway, Belgium, Spain, Italy, Denmark, Singapore, Mauritius; accessed 12 October 2026) — https://www.incometaxindia.gov.in/w/%E2%80%8Btax-rates-dtaa-v.-income-tax-act
39. Income Tax Department, s.10AA Income-tax Act 1961 (unit which "begins to manufacture or produce articles or things or provide any services during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2006, but before the first day of April, 2021"; 100% for 5 years, 50% for 5, reserve-linked 50% for 5; accessed 12 October 2026) — https://www.incometaxindia.gov.in/w/section-10aa
40. Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020, s.3(1)(c)(ii) read with the third proviso to s.3(1), item (v): for s.10AA commencement by a unit with a letter of approval by 31 March 2020, the general extension to "31st day of March, 2021" is replaced by "30th day of September, 2020" (and the window end "31st day of December, 2020" by "29th day of September, 2020") (accessed 12 October 2026) — https://prsindia.org/files/bills_acts/bills_parliament/2020/TAXATION%20AND%20OTHER%20LAWS%20(RELAXATION%20AND%20AMENDMENT%20OF%20CERTAIN%20PROVISIONS)%20ACT,%202020.pdf ; s.144 Income-tax Act 2025 (SEZ deduction continues "only for such tax years as would have been allowed under section 10AA … as if the said Act had not been repealed"; reproduction, accessed 12 October 2026) — https://www.taxsutra.com/lsi/act/section/print/146744
41. PwC Worldwide Tax Summaries, India — Branch income ("no withholding tax on remittance of profits by the branch to its head office"; reviewed 11 May 2026; accessed 12 October 2026) — https://taxsummaries.pwc.com/india/corporate/branch-income
42. GST Council, e-flyer "Reverse Charge Mechanism" (services from a supplier in a non-taxable territory to a recipient in India: recipient liable under s.5(3) IGST Act; paid in cash, then creditable if otherwise eligible; accessed 12 October 2026) — https://www.gstcouncil.gov.in/sites/default/files/e-version-gst-flyers/Reverse%20charge%20Mechanism.pdf
43. EY India, GST Council announces major rate rationalisation (56th Council; standard rate 18%, merit rate 5%, 40% demerit; effective 22 September 2025) — https://www.ey.com/content/dam/ey-unified-site/ey-com/en-in/alerts-hub/2025/09/gst-council-announces-major-rate-rationalization-and-trade-facilitation-measures.pdf
44. Income Tax Department, FAQs on Budget 2026 (MAT "from 15% to 14%", "final tax and no new credit … from 01.04.2026"; buy-back from promoters taxed at 22% (domestic company) / 30% (others), from tax year 2026-27; IFSC "100% deduction … for 20 consecutive years out of 25 years", 15% rate after the holiday; data-centre safe harbour 15%; accessed 12 October 2026) — https://www.incometaxindia.gov.in/documents/20117/15766092/FAQs-Budget-2026.pdf/ff3d0e10-88a0-b11f-3c27-b58375974227
45. KPMG US, "Germany: Legislation to expand MLI to 62 additional treaties passed by lower house of Parliament" (Bundestag 26 March 2026; India named; accessed 12 October 2026) — https://kpmg.com/us/en/taxnewsflash/news/2026/04/tnf-germany-legislation-to-expand-mli-to-62-additional-treaties-passed-by-lower-house-of-parliament-other-tax-developments.html
46. Taxand, "Extension of the German BEPS-MLI Implementation Act to further countries" (22 May 2026: Bundesrat approval 8 May 2026; India among the 41 treaties that can take effect; application needs a further BEPS-MLI Application Act, "not expected before 1 January 2027 – and probably even later") — https://www.taxand.com/our-thinking/insights/extension-of-the-german-beps-mli-implementation-act-to-further-countries-german-federal-council-gives-its-approval/ ; Orbitax (8 Jun 2026): Act published in the Federal Law Gazette 5 June 2026 — https://orbitax.com/news/country/article/Germany-Enacts-Law-to-Expand-S-62232 ; Deloitte Germany (11 Feb 2026; draft list names India) — https://www.deloitte-tax-news.de/german-tax-legal-news/draft-legislation-to-expand-application-of-mli-introduced-into-formal-legislative-process.html
47. Income Tax Department, s.431 Income-tax Act 2025 (refund of tax paid, or treated as paid, in excess of the amount properly chargeable; accessed 12 October 2026) — https://www.incometaxindia.gov.in/w/section-431-5
48. BDO USA, "New tax act changes numerous international tax provisions" (21 Jul 2025: GILTI renamed net CFC tested income; s.250 deduction 40%; foreign-tax-credit haircut cut to 10%; CFC years beginning after 2025) — https://www.bdo.com/insights/tax/new-tax-act-changes-numerous-international-tax-provisions
49. PwC Worldwide Tax Summaries, Germany — Income determination (dividends on holdings of at least 10% exempt with 5% add-back; foreign PE income in most cases exempt; reviewed 30 Jun 2026) — https://taxsummaries.pwc.com/germany/corporate/income-determination
50. PwC Worldwide Tax Summaries, Netherlands — Income determination (participation exemption: fully exempt on qualifying holdings of at least 5%; object exemption excludes foreign-branch income; reviewed 29 May 2026) — https://taxsummaries.pwc.com/netherlands/corporate/income-determination
51. Income Tax Department, "FAQs and Guidance Notes on Forms as per Income-tax Rules 2026" (Form 48 = ex-3CEB, s.172; Form 49 = ex-3CEFA/B/C, safe harbour; Form 41 = ex-10F, s.159(8); Form 162 = ex-49C, s.505; Form 66 = ex-29B, s.206(1); Forms 145/146 = ex-15CA/15CB; accessed 12 October 2026) — https://www.incometaxindia.gov.in/faqs-and-guidance-notes-on-forms-as-per-income-tax-rules-2026
52. Income Tax Department, s.77 Income-tax Act 2025 (slump sale: net worth as cost; short-term if the undertaking was held 36 months or less; accountant's report; accessed 12 October 2026) — https://www.incometaxindia.gov.in/w/section-77-102
53. MBG, "No capital gain on conversion of Indian branch of foreign bank into Indian subsidiary" (Jan 2019; regime limited to foreign banks under the RBI scheme, Notifications 85/86 of 2018) — https://www.mbgcorp.com/indiatest/insights/no-capital-gain-on-conversion-of-indian-branch-of-foreign-bank-into-indian-subsidiary-company/
54. India–United Arab Emirates BIT (signed 13 Feb 2024, in force 31 Aug 2024), text on the WTI EDIT database: Art 1.5(ii) and fn 3 (investor must have "substantial business activities" in its home state: physical presence, central administration, staff, turnover and taxes); Art 2.4(ii) (treaty does not apply to "any measure regarding taxation"); Art 17 ("Conditions Precedent to Submission of a Claim to Arbitration"); Art 36.1 (benefits "shall not be available to" an investor "owned or controlled, directly or indirectly, by juridical entities or natural persons of a non-Party") — https://edit.wti.org/document/show/cc53a87e-1f5e-4225-9ed7-94414f0c4ce1 (accessed 12 October 2026; Art 36.1 read 15 October 2026)
55. India Briefing, "India's Taxation and Other Laws (Amendment) Act 2026" (Act 21 of 2026, assent 17 Aug 2026, deemed effective 1 Apr 2026 unless stated: Schedule IV serial 13A electronics capital-goods exemption extended to tax year 2040-41; new serial 13G bonded-warehouse components exemption from 1 Oct 2026 to 31 Mar 2041; Schedule I offshore-fund safe harbour recast; no change to corporate rates, MAT, s.69 or s.147; accessed 12 October 2026) — https://www.india-briefing.com/news/india-taxation-other-laws-amendment-act-2026-46597.html/ ; KSMG, "Taxation and Other Laws (Amendment) Act 2026" (Act No. 21 of 2026; serial 13G applies to income arising on or after 1 Oct 2026) — https://ksmg.co/insights/income-tax/taxation-and-other-laws-amendment-act-2026
56. KPMG US, "India: Transfer pricing provisions in Income-tax Rules 2026" (26 Mar 2026: final Rules notified 20 March 2026, effective 1 April 2026; safe harbour keeps the draft approach, Form 49 with enhanced disclosure, one-time threshold test) — https://kpmg.com/us/en/taxnewsflash/news/2026/03/india-transfer-pricing-income-tax-rules-2026.html ; Treelife, "Safe harbour rules for IT, ITES and captives" (23 Jul 2026: rule 89(2) 15.5% on operating costs; INR 2,000 crore threshold tested in year 1; rule 91 Form 49, five-year block) — https://treelife.in/legal/safe-harbour-rules-for-it-ites-and-captives/ ; Mondaq (16 Feb 2026, draft rule 91) — https://www.mondaq.com/india/income-tax/1744770/draft-income-tax-rules-2026-notified-for-safe-harbour-for-it-services
57. Finance Act 2026 (Act No. 4 of 2026, assent 30 March 2026), s.3(6) (s.3 applies to the Income-tax Act 2025; s.2 to the 1961 Act): tax under s.69, s.170(5) or s.352 of the Income-tax Act 2025 "shall be increased by a surcharge, for the purposes of the Union, calculated at the rate of 12% of such tax"; foreign-company surcharge 2% (income above INR 1 crore up to INR 10 crore) / 5% (above INR 10 crore), s.3(4)(b) Table Sl. 7 (accessed 12 October 2026) — https://www.incometaxindia.gov.in/documents/d/guest/finance-act-2026-pdf-1 ; Taxmann, Finance Bill 2026 amendments passed by Lok Sabha 25 Mar 2026 (12% flat surcharge; s.68 Companies Act condition) — https://www.taxmann.com/post/blog/taxmanns-analysis-finance-bill-amendments-passed-by-lok-sabha ; Trilegal, Budget 2026 shifts for M&A deals (rate table: other promoters 12.5% + 17.5% = 30% long-term; non-residents covered) — https://trilegal.com/knowledge_repository/trilegal-update-budget-2026-shifts-that-matter-for-ma-deals/
58. Trilegal, "Budget 2026: key highlights for IFSC units" (holiday "20 consecutive years within a 25-year period"; 15% base rate after the holiday; from tax year 2026-27) — https://trilegal.com/knowledge_repository/trilegal-update-budget-2026-key-highlights-for-units-in-the-international-financial-services-centre-ecosystem/
59. Hyatt International Southwest Asia Ltd v ADIT, Supreme Court, 24 July 2025, 2025 INSC 891 (Civil Appeal 9766/2025; Pardiwala and Mahadevan JJ) — https://www.supremecourtcases.com/hyatt-international-southwest-asia-ltd-v-additional-director-of-income-tax/ ; DIT v Samsung Heavy Industries Co Ltd, Supreme Court, 22 July 2020, Civil Appeal 12183/2016 (judgment reproduced) — https://itatonline.org/archives/dit-vs-samsung-heavy-industries-co-ltd-supreme-court-the-condition-precedent-for-applicability-of-fixed-place-permanent-establishments-under-article-51-of-the-double-taxation-avoid/
60. Tungsten Automation England Ltd v DCIT (IT), Delhi High Court, (2025) 480 ITR 93 / 176 taxmann.com 497 (digest) — https://itatonline.org/digest/tungsten-automation-england-ltd-v-dy-cit-it-2025-480-itr-93-176-taxmann-com-497-delhihc/ ; Trilegal, "Secondment recharges under scrutiny" (6 Jul 2026) on CIT (IT) v Ernst & Young U.S. LLP, Delhi High Court, [2026] 187 taxmann.com 711 — https://trilegal.com/knowledge_repository/secondment-recharges-under-scrutiny-delhi-high-court-reaffirms-cost-reimbursements-taxable-as-fees-for-technical-services/
61. Reserve Bank of India, FEMA 3(R)(5)/2026-RB, Foreign Exchange Management (Borrowing and Lending) (Amendment) Regulations 2026 (in force 16 Feb 2026) — https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13306&Mode=0 ; A.P. (DIR Series) Circular 22 — https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13305&Mode=0 (accessed 12 October 2026)
62. Reserve Bank of India home page, FBIL reference rates as at 1 pm, 12 Oct 2026: USD 95.7485, GBP 126.9185, EUR 107.3022 — https://www.rbi.org.in/ (accessed 12 October 2026)
63. ATB Legal, India bilateral investment treaty protection: how to secure your investment before a dispute (October 2026) — https://atblegal.com/blog/foreign-investment-in-india/india-bilateral-investment-treaty/

Disclaimer: This article is general information, not legal or tax advice. Indian and home-country tax law changes frequently and outcomes depend on facts; verify against current law and take advice before acting.