The Income-tax Act, 1961 seeks to levy tax on a non-resident (including a foreign company) only on that income which accrues or arises or is received in India. The Act also requires every company (including a foreign company) to furnish an annual return of income. In this background, one of the issues which has been of wide interest and contemplation is, whether a foreign company is liable to file an annual return of income in India, when there is income accruing or arising in India which is not liable to tax in India either on account of an exemption under the Act or under the Tax Treaty. This Article analyses the two possible views in the said factual scenarios.

Audio Source : An article published on the LKS website in August 2022
 https://www.lakshmisri.com/insights/articles/foreign-companies-obligation-to-file-tax-return-in-india/

Authors: Neha Sharma, Principal Associate (LKS)

Voice : Yashraj Chauhan, Associate (LKS)