Five Common Mistakes to Avoid While Filing Your ITR in India
Filing Income Tax Returns is more than a regulatory requirement for foreign subsidiaries. Even minor discrepancies may result in audits, refund delays, or notices.
Nonetheless, foreign subsidiaries file accurate, compliant, and timely ITR each year. One important reason is because they work with a trusted local partner who understands India’s regulatory climate and global standards.
Our experts have assisted several foreign companies across USA, Europe, Southeast Asia, and other countries file accurate ITRs. Based on our experience and expertise, here are some common mistakes that occur while filing ITR.
1. Incorrect ITR Form
The ITR form depends on company structure, ownership, and income profile. Often, foreign subsidiaries may use forms meant for domestic entities, which results in ITR filing errors.
Strategic leaders rely on experts like us to ensure using the accurate ITR form. Our team conducts an assessment of your corporate setup, ensures applicable sections are used correctly, and all disclosures are made to avoid errors.
2. Misreporting Cross-Border Transactions
Cross-border transactions like intercompany loans, royalty, and technical fees must adhere to transfer pricing regulations. Misreporting a single global transaction may have severe consequences like reassessment or penalties.
Our transfer pricing experts assist foreign companies to prepare Form 3CEB, benchmark transactions, and ensure proper documentation as per Indian and OECD standards.
3. Ignoring Permanent Establishment Exposure
Sometimes, a liaison or project office may unintentionally create a permanent establishment. If this is not reported, it may lead to retrospective liabilities or double taxation.
Greenvissage experts evaluate operational scope, contracts, and staffing patterns to accurately determine and disclose such related income.
4. Missing Foreign Account and Asset Disclosures
Indian subsidiaries must report overseas accounts, assets, and shareholdings while ITR filing return. In case these are not reported or overlooked, it may trigger severe penalties under the Black Money Act.
To avoid such penalties, aligning FEMA and tax disclosures in a single consolidated filing is important. Our team coordinates with the foreign finance departments to ensure all disclosures are audit-ready, complete and compliant.
5. Delayed Filings and Missed Verifications
Complex global approval processes, tight reporting calendars, and time zone differences may cause foreign subsidiaries to miss deadlines or complete post-filing verifications.
To avoid such delays, strategic leaders centralize Indian filings with reliable local partners. Our ITR consultants will take ownership of the entire lifecycle, which includes computation, filing, compliance, verification, and more. This ensures accurate, timely, and validated filings to avoid future issues.
Greenvissage has built a reputation to assist global companies scale their operations in India. Our end-to-end ITR filing process combines automatic reconciliations, human reviews, and global expertise to provide 100% accuracy across different jurisdictions. And that is why, international brands across various industries from manufacturing to SaaS to technology and more choose us as their income tax partners in India.
Drop a mail on info@greenvissage.com or call on +91 8237857853 to understand how we can align with your subsidiary to ensure accurate and timely income tax computation and filing.