Indian Subsidiary vs Branch Office – Key Differences, Taxation, Compliance

If you have already read the structure comparison and know you are choosing between a subsidiary and a branch office, this article is for you. The legal definitions, the three-way WOS/BO/LO comparison, and the FDI policy overview are covered in our India entry structure guide. What that article summarises, this one goes deep on: the actual effective tax rates for AY 2026-27, the compliance obligations that carry real penalty exposure, the transfer pricing problem specific to branch offices, and the quantified cost of restructuring from a branch to a subsidiary after the fact.

How large is the tax gap between a subsidiary and a branch office?

The effective tax rate difference between the two structures is not a rounding error. For AY 2026-27, a branch office is taxed as a foreign company under the Income Tax Act 1961 at a base rate of 35% on net Indian income. After surcharge at 2% for income between ₹1 crore and ₹10 crore (or 5% above ₹10 crore) and the 4% Health and Education Cess, the effective rate sits between 36.4% and 38.2% depending on the income band.

An Indian subsidiary, regardless of who owns it, is classified as a domestic company. It can elect into concessional regimes that the branch cannot access at all. The full scope of foreign subsidiary compliance obligations that flow from this domestic classification is covered separately.

Tax rate comparison for AY 2026-27

Structure	Base rate	Effective rate (incl. surcharge and cess)	MAT applicability
Branch office (foreign company)	35% on net income	36.4% to 38.2%	Not applicable
Subsidiary – standard regime	30%	Up to 34.94%	15% on book profit (Section 115JB)
Subsidiary – Section 115BAA (any domestic company)	22%	25.17% (flat 10% surcharge)	Exempt
Subsidiary – Section 115BAB (new manufacturing, incorp. after 01/10/2019)	15%	17.16% (flat 10% surcharge)	Exempt

To put this in rupee terms: on ₹10 crore of net Indian profit, a branch office pays approximately ₹3.82 crore in tax. The same subsidiary under Section 115BAA pays ₹2.52 crore. That is ₹1.30 crore per year that does not go back to the group. Over five years, at flat profit, the gap exceeds ₹6.5 crore before factoring in the time value of capital. A new manufacturing subsidiary under 115BAB pays ₹1.72 crore on the same ₹10 crore base. The gap against the branch widens to ₹2.10 crore annually.

For royalties and fees for technical services billed by the branch to Indian entities or received from the foreign head office, the domestic law rate is 50% on gross income with no expense deduction. After surcharge and cess, the effective rate exceeds 52%. This is often the first number that makes a CFO reconsider a branch structure. Any software licensing or management fee arrangement routed through a branch carries a gross withholding burden that a subsidiary structure with treaty planning can reduce substantially.

What is Section 115BAA and why does the irrevocability matter?

Section 115BAA of the Income Tax Act 1961 is the concessional domestic company tax regime introduced by the Taxation Laws (Amendment) Ordinance 2019. Any domestic company, including a wholly foreign-owned subsidiary, can elect into it. The rate is 22% plus a flat 10% surcharge plus 4% cess, producing an effective rate of 25.17%. The flat surcharge is significant: under the standard regime, companies with income above ₹10 crore face a 12% surcharge, so 115BAA actually produces a lower effective rate at higher income levels too.

The trade-off is forgoing certain deductions: Chapter VI-A deductions (other than Section 80JJAA and 80M), the Section 10AA SEZ tax holiday, additional depreciation under Section 32(1)(iia), and deductions under Sections 35AD, 35CCC, and 35CCD. Minimum Alternate Tax (MAT) under Section 115JB does not apply to 115BAA companies. This is consequential for capital-intensive operations that would otherwise face MAT even in loss years.

The irrevocability is the part that costs subsidiaries money in year two. The election must be filed in Form 10-IC before or with the first return of income under the chosen regime. Once made, it cannot be reversed. A subsidiary that has:

• Large unabsorbed depreciation from capital expenditure in year one
• SEZ unit income benefiting from the 100% deduction under Section 10AA
• Significant employment generation entitled to the Section 80JJAA deduction

may produce a lower net tax outgo in early years under the standard regime, even at the higher headline rate, simply because the deductions wipe out the tax base. The 115BAA election locks in 25.17% on every rupee of income permanently. Modelling both regimes against five-year income and capex projections before filing the first return is not optional. It is the most consequential tax decision the subsidiary’s India management makes.

Section 115BAB applies to new domestic manufacturing companies incorporated on or after 01/10/2019 that commenced production before 31/03/2024. The rate is 15% base plus 10% surcharge plus 4% cess, effective 17.16%. This rate is not available to a branch office in any scenario and represents the widest possible tax gap available in the current framework.

What are the compliance obligations for a branch office, and which ones carry real penalty exposure?

A branch office carries a dual compliance stack. The first is the foreign company filing regime under Chapter XXII of the Companies Act 2013. The second is FEMA reporting to the RBI through the designated Authorised Dealer (AD) Category-I bank. For a detailed treatment of how branch offices in India are established and regulated, the RBI approval process and permitted activity list are covered in full. The overlap between these creates four filing events that carry material penalty exposure if missed or incorrectly completed.

The four high-risk branch office filings

Form FC-1 under Section 380 of the Companies Act 2013 must be filed with the Registrar of Companies within 30 days of establishing the branch. This is the registration filing and must be supported by the RBI approval letter, apostilled incorporation documents, director details, and proof of office address. Late filing attracts a penalty of ₹1 lakh plus ₹500 per day under Section 86 of the Companies Act 2013.

The DGP report is the filing most consistently missed. Within five working days of the branch office becoming operational, a report must be submitted to the Director General of Police of the state in which the branch is established. This is required under the RBI’s Master Direction on establishment of BO/LO/PO. It sits outside the MCA and income tax filing calendars and is not flagged by most compliance management tools. Missing it constitutes a FEMA contravention and requires a compounding application to regularise.

The Annual Activity Certificate (AAC) is submitted to the designated AD Category-I bank by 30 September each year for the period ending 31 March. It is accompanied by audited financial statements and must be certified by a Chartered Accountant. The AAC certifies that the branch has undertaken only the activities approved by the RBI in its UIN approval letter. The AD bank forwards the AAC to the RBI. If the AAC is not submitted, or if the AD bank raises an adverse report, the RBI can initiate enforcement action including cancellation of the UIN. The operational risk here is activity drift, which is covered in the next section.

The FLA return (Foreign Liabilities and Assets) must be filed with the RBI by 15 July each year. Non-filing is treated as a FEMA violation and can result in penalty proceedings.

Subsidiary compliance: heavier in volume, more predictable in consequence

Filing	Authority	Frequency	Key due date
Form AOC-4 (financial statements)	MCA	Annual	30 days from AGM
Form MGT-7A (annual return)	MCA	Annual	60 days from AGM
Income tax return (ITR-6)	Income Tax Dept.	Annual	31 October (for audited entities)
TDS returns (Form 24Q, 26Q)	Income Tax Dept.	Quarterly	31 July, 31 October, 31 January, 31 May
GSTR-1 and GSTR-3B	GST Council	Monthly / Quarterly	11th and 20th of following month (monthly)
Form FC-GPR (post FDI allotment)	RBI via AD bank	Per transaction	Within 30 days of share allotment
FLA return	RBI	Annual	15 July
Board meetings	Companies Act 2013	Minimum 4 per year	Not more than 120 days between two meetings
Statutory audit	Companies Act 2013	Annual	Before AGM

The subsidiary’s compliance is the compliance of a normal Indian company: well-documented, well-serviced, with published penalties that can be quantified in advance. The branch office’s compliance is lighter in volume but more uncertain in consequence. A procedural lapse in a subsidiary filing attracts a defined late fee. A lapse in branch compliance, particularly one involving activities outside the approved scope, is a FEMA contravention, which is a different category of regulatory risk entirely.

What is the Annual Activity Certificate and what actually triggers a violation?

The Annual Activity Certificate is the mechanism through which the RBI monitors whether a branch office is operating within its approved scope. It is not a tax filing and it is not an MCA filing. It sits entirely within the FEMA compliance framework and is administered through the AD Category-I bank that the branch has designated for its banking operations.

The AAC must certify three things: that the branch has undertaken only the activities specified in the RBI’s approval letter and UIN, that all expenses of the branch have been funded through permitted channels (inward remittances from the head office or revenue from RBI-approved activities), and that the financial statements are a true and fair representation of the branch’s Indian operations.

A violation is triggered not by the late filing of the AAC but by what the AAC, when properly prepared, would reveal. The most common scenario is activity drift: the branch starts with approval for, say, software development services and rendering technical support. Over 18 months, the India team begins pre-sales work with prospective Indian customers, signs non-disclosure agreements on behalf of the parent, provides consulting to Indian third parties on a paid basis, and takes on product management responsibilities that go beyond the original scope. None of this was explicitly decided. It happened incrementally. When a competent CA prepares the AAC properly, the activities listed in the certificate no longer match the approval letter.

At this point the branch has two options: file an AAC that accurately reflects what happened (which discloses a FEMA contravention to the AD bank) or file an inaccurate AAC (which is a separate and more serious contravention). The correct path is voluntary disclosure and a compounding application to the RBI. The compounding amount depends on the nature of the contravention, the period of contravention, and the quantum involved. For activity-scope violations that ran for one to two years, compounding amounts in the range of ₹5 lakhs to ₹25 lakhs are typical, though the RBI has wide discretion.

The practical takeaway is that the AAC should be prepared by FEMA-qualified counsel reviewing the actual activities of the branch against the approval letter, not by the statutory auditor preparing it as an extension of the financial audit. The two documents serve different purposes.

How does transfer pricing create more exposure for branch offices than for subsidiaries?

Transfer pricing under Chapter X of the Income Tax Act 1961 applies to both structures, but the underlying analysis and the assessment risk profile are materially different. Treelife’s transfer pricing advisory practice covers both subsidiary and branch office documentation and benchmarking.

For a subsidiary, transfer pricing governs the pricing of transactions with the foreign parent and other associated enterprises: management fees, software licences, royalties, intercompany loans, shared services. The subsidiary and the parent are two distinct legal entities. The arm’s length standard is applied to the price at which one entity transferred something to another. The subsidiary maintains documentation under Section 92D, files Form 3CEB certified by a Chartered Accountant, and applies one of the six recognised methods (CUP, RPM, CPM, TNMM, PSM, or Other) to demonstrate that its prices are market-consistent. The documentation burden is real but the framework is stable: the transactions are defined, the counterparties are identified, and the benchmarking methodology does not change year to year unless the business model changes.

For a branch office, the analysis is structurally different because the branch and the head office are the same legal entity. There are no intercompany transactions in the legal sense. Instead, the Income Tax Act requires income attribution: the branch must determine what share of the entity’s global profit is attributable to the Indian permanent establishment, using what the OECD calls the functionally separate entity approach. The branch is treated as if it were an independent enterprise doing the same work under the same conditions, and its income is computed on that hypothetical basis.

This approach creates three practical problems that subsidiaries do not face. First, the attribution methodology is contested annually. The income tax assessing officer reviews what functions the branch performs, what assets it uses, and what risks it bears, and then forms an independent view of how much profit should be attributed to India. If the head office is capturing substantial value through IP ownership or centralised functions, the Indian branch’s attributed income can be significantly lower than the assessing officer believes is appropriate. Transfer pricing adjustments on branch offices in the IT and professional services sectors have historically been substantial.

Second, the documentation required to support the income attribution is built from scratch every year. For a subsidiary, the arm’s length pricing policy is established at inception, benchmarked against comparables, and updated when the business model changes. For a branch, the functional analysis, the identification of comparable companies, and the income split must be justified afresh for each assessment year.

Third, the Form 3CEB and the supporting documentation must be filed even where the branch’s India operations are small. The threshold for mandatory documentation under Section 92D is aggregate international transactions of ₹1 crore. A branch office in its first operational year will typically cross this threshold through cost allocations and management charges from the head office. The penalty for failure to maintain documentation is 2% of the transaction value under Section 271AA, regardless of whether the pricing itself is subsequently found to be arm’s length.

What is the parent company’s liability exposure, and when does it become real?

In a subsidiary, the parent’s liability is ring-fenced. Creditors of the Indian subsidiary can reach the subsidiary’s assets. Absent a specific guarantee or a court finding of piercing the corporate veil, which Indian courts apply narrowly, they cannot reach the foreign parent’s balance sheet. This separation holds through tax demands, regulatory penalties, employment disputes, and commercial litigation.

In a branch office, no such separation exists. The branch is the foreign parent. Every liability the branch incurs in India is a liability of the parent. This unlimited exposure matters in three specific scenarios.

FEMA penalties under Section 13 of FEMA 1999 can reach three times the amount involved in the contravention. For a branch that has been conducting unapproved activities for two to three years on ₹5 crore of annual turnover, the potential penalty exposure is ₹15 crore or more. That demand falls on the foreign parent entity directly.

Indian employment law provides strong protections to employees, including statutory gratuity under the Payment of Gratuity Act 1972, provident fund obligations under the Employees’ Provident Funds and Miscellaneous Provisions Act 1952, and retrenchment compensation requirements under the Industrial Disputes Act 1947. If the branch is wound up and there are unresolved employee claims, those claims are against the foreign parent. A subsidiary’s employee obligations are ring-fenced within the Indian entity.

Commercial counterparties suing the branch are suing the foreign parent. A vendor with an unpaid invoice, a customer with a service dispute, or a landlord with an unpaid lease all carry claims against the parent company’s global assets, enforceable through Indian courts and, depending on the applicable enforcement treaties, potentially abroad.

What does it actually cost to convert a branch office to a subsidiary?

There is no statutory conversion mechanism. A branch office cannot be upgraded or transformed into a subsidiary. The process requires closing the branch and incorporating a new Indian entity separately. For founders considering the subsidiary route from the outset, the full process for setting up a wholly owned subsidiary in India is documented separately. The timeline for conversion end to end is typically nine to fifteen months. The cost is higher than most foreign companies anticipate.

The closure process under FEMA 22(R)/2016-RB requires a no-objection from the AD Category-I bank, an auditor’s certificate specifying the remittable amount, a tax clearance from the income tax authorities, confirmation from the Registrar of Companies that the branch has filed all required returns, and confirmation from the parent that no legal proceedings are pending in any Indian court. The RBI must approve the repatriation of winding-up proceeds. If the branch has any open transfer pricing assessments or pending FEMA contraventions, these must be resolved before closure is complete.

The transactional costs of the conversion are the less visible part. A branch office that has operated for two or three years has accumulated: GST registration and input tax credit balances (which may or may not transfer cleanly to the new entity), employment contracts and benefit accruals in the parent company’s name (which must be terminated and re-created in the subsidiary’s name, triggering gratuity and notice obligations), vendor and customer contracts (which must be novated or re-executed), property leases (where the landlord may require a new security deposit and fresh lease at current market rent), and any IP licences or registrations held in the parent’s name.

The stamp duty on property-related transfers, GST on deemed supplies in the transition, legal fees for contract novation, and the management time to migrate banking relationships and regulatory registrations typically add ₹20 lakhs to ₹60 lakhs in direct costs for a branch with 20 to 50 employees. For a larger operation, the number is higher. The restructuring timeline also creates a period of operational uncertainty: the branch must remain active until the subsidiary is fully set up, which means two entities, two compliance calendars, and two sets of banking arrangements running in parallel.

Common mistakes and the penalty arithmetic behind each one

1. Filing the AAC without a FEMA-qualified review The statutory auditor and the FEMA-qualified advisor have different mandates. The auditor certifies the financial statements. The FEMA review compares the actual activities of the branch against the text of the RBI approval letter. Branches that have evolved their operations without updating their RBI approval routinely file AACs that are technically inaccurate. The first time this is examined by the AD bank or the RBI, the contravention is already two to three years old. Penalty under Section 13 of FEMA 1999: up to three times the sum involved.

2. Missing the five-day DGP reporting window Within five working days of becoming operational, the branch must report to the Director General of Police of the relevant state. This obligation sits outside every standard compliance calendar and is missed on the vast majority of first setups. Regularising it requires a compounding application. Typical compounding amount for this specific violation: ₹1 lakh to ₹3 lakhs depending on the period of non-compliance.

3. No transfer pricing documentation in year one The Section 92D documentation threshold is ₹1 crore in aggregate international transactions. Most branches cross this in year one through cost allocations and head office charges. Penalty for failure to maintain documentation: 2% of the value of each international transaction under Section 271AA, irrespective of whether the pricing is subsequently found to be arm’s length. On ₹2 crore of transactions, that is ₹4 lakhs in penalty exposure before the merits of the pricing are even examined.

4. Electing 115BAA before modelling the deduction trade-offs A subsidiary with significant capital expenditure in year one, or with SEZ income entitled to the Section 10AA deduction, may produce a lower net tax outgo under the standard 30% regime in early years. The 115BAA election is permanent. It cannot be reversed in year two when the depreciation benefit or SEZ holiday period becomes clear. Model both regimes against five-year projections before filing the first return.

5. Assuming branch profits can be repatriated freely Repatriation of branch profits to the foreign head office requires specific documentation: the AD bank must confirm the remittable amount, an auditor’s certificate is required, and the income tax position on the profits being repatriated must be clear. Branch offices that attempt to repatriate profits without completing this process create FEMA violations. A subsidiary’s dividend repatriation is a more standardised process governed by the Companies Act 2013 and the FEMA current account transaction rules.

Treelife practitioner note

In the India-entry engagements we have run at Treelife, the branch-versus-subsidiary question surfaces earlier than it should. Often this happens only after the foreign company has already signed an office lease or hired local employees under the parent entity’s name. At that point, the structure has been implicitly chosen, and unwinding it is expensive.

The pattern we see most frequently involves mid-size technology and professional services companies. The parent’s global legal team recommends a branch because it avoids incorporation costs and feels closer to what the parent entity is already doing. The finance team accepts the recommendation without running the tax arithmetic. Two years in, the branch is profitable, paying 38% effective tax, the AAC is being signed without proper activity-scope review, and the parent entity is unknowingly exposed to any contract dispute or labour claim arising in India.

The decision framework we use at Treelife is this: if the India operation will generate revenue within 18 months, incorporate a subsidiary. If the operation is purely preparatory, a liaison office, not a branch office, is the right answer. The branch office sits in a narrow middle ground: it suits companies that need to transact commercially in India but have sector-specific reasons that make the subsidiary route unavailable in the near term. Foreign banks, airlines, and shipping companies have legitimate structural reasons for the branch route. Most technology and services companies do not. For sector-specific guidance on structure selection, our guide on India entry for SaaS and tech companies covers the full picture.

The most consequential regulatory reference to carry into this decision: Notification No. FEMA 22(R)/RB-2016 dated 31/03/2016, which defines the permitted activities list for branch offices, and Section 115BAA of the Income Tax Act 1961, which governs the concessional regime available exclusively to domestic companies. These two documents together make the case for the subsidiary clearer than any general advisory.

Case study: German SaaS company, pivot from branch to subsidiary

Situation: A German SaaS company with an existing India development centre operating as a branch office for three years. Annual revenue attributed to India operations: ₹8.2 crore.

Challenge: Effective tax rate of 38.2% on Indian profits. Transfer pricing adjustment of ₹1.1 crore raised by the Income Tax Department for AY 2024-25. AAC for the prior year had disclosed activities outside the RBI-approved scope (pre-sales support to Indian third-party clients), triggering an AD bank adverse report.

What Treelife did: Filed a FEMA compounding application for the activity-scope contravention. Drafted a restructuring plan for orderly closure of the branch and fresh incorporation of a private limited subsidiary. Modelled the Section 115BAA election against the company’s five-year India revenue projections. Set up a transfer pricing policy document and benchmarking study under Section 92D.

Outcome: Compounding penalty settled at ₹9.5 lakhs. Tax rate reduced to 25.17% post-restructuring. Transfer pricing documentation policy in place, removing the risk of annual ad hoc assessments. First-year tax saving post-restructuring: ₹1.06 crore on the same ₹8.2 crore revenue base.

FAQs

Q: What is the corporate tax rate for an Indian subsidiary in FY 2026-27?
A: A domestic subsidiary electing Section 115BAA pays an effective rate of 25.17% (22% base plus 10% surcharge plus 4% cess). New manufacturing subsidiaries eligible under Section 115BAB pay 17.16%. The standard rate without a concessional election is up to 34.94%, with MAT at 15% on book profit also applying.

Q: What is the tax rate for a branch office in India for AY 2026-27?
A: Business income is taxed at a base rate of 35% as a foreign company. Effective rate after surcharge and cess is 36.4% to 38.2% depending on the income level. Royalties and fees for technical services face a domestic law rate of 50% on gross income, reducible under applicable tax treaties.

Q: What is the Annual Activity Certificate and when must it be filed?
A: The AAC is a certificate signed by a Chartered Accountant confirming that the branch office has only undertaken RBI-approved activities during the preceding financial year. It must be submitted to the designated AD Category-I bank by 30 September each year, along with audited financial statements for the period ending 31 March. Non-submission or an adverse report triggers RBI scrutiny and can result in cancellation of the Unique Identification Number.

Q: Is Section 115BAA available to a branch office?
A: No. Section 115BAA is available only to domestic companies under the Income Tax Act 1961. A branch office is taxed as a foreign company and cannot elect into any concessional domestic company regime. This is the single most important tax distinction between the two structures.

Q: What documents are needed to apply for a branch office in India?
A: Incorporation certificate of the foreign company (apostilled), Memorandum and Articles of Association, audited financial statements for the preceding five years, a letter of intent describing proposed activities in India, board resolution authorising establishment of the branch, and KYC documents for the authorised representative. All foreign documents must be apostilled or notarised through the Indian embassy.

Q: What is the penalty for operating a branch office outside RBI-approved activities?
A: Contravention of FEMA 1999 carries penalties under Section 13 of up to three times the amount involved, or ₹2 lakhs where the amount is not quantifiable. Compounding under Section 15 is available but requires disclosure, quantification, and payment of a compounding amount determined by the RBI. Voluntary disclosure before the contravention is detected by the AD bank typically results in a lower compounding charge.

Q: Can a foreign company claim DTAA benefits through a branch office?
A: Yes, where a Double Taxation Avoidance Agreement (DTAA) exists between India and the parent company’s country of residence. Treaty benefits most commonly reduce withholding tax on royalties and fees for technical services, which face a 50% gross domestic law rate. The branch must provide a Tax Residency Certificate (TRC) to claim treaty relief. However, general business income attributed to the branch’s Indian permanent establishment remains taxable at domestic foreign company rates under most treaties.

Q: What happens to branch office registration if the foreign parent is acquired?
A: The branch office approval is entity-specific. A change in ownership of the foreign parent triggers an obligation to inform the AD Category-I bank. Depending on the nature and scale of the change, fresh RBI approval may be required. An Indian subsidiary, by contrast, is an independent entity whose shares can be transferred to a new acquirer through an FC-TRS without affecting the subsidiary’s own legal existence or registrations.

Q: Can a branch office access Indian bank debt or raise working capital locally?
A: Generally no. A branch office can maintain current accounts and receive inward remittances from the head office for operating expenses, but borrowing from Indian banks in the ordinary course is not permitted. An Indian subsidiary can access working capital facilities, term loans, and external commercial borrowings in its own name, which makes it the correct structure for any capital-intensive or inventory-carrying business.

Q: Is GST registration required for both structures?
A: Yes, if taxable turnover exceeds ₹20 lakhs per annum (₹10 lakhs for specified special category states). The GST registration is in the name of the entity as it operates in India: the subsidiary in its own name, the branch office in the name of the foreign parent company with the branch’s PAN and place of business.

Q: What is the transfer pricing documentation threshold and penalty?
A: Documentation under Section 92D of the Income Tax Act 1961 is mandatory if aggregate international transactions exceed ₹1 crore in a financial year. The penalty for failure to maintain documentation is 2% of the value of each international transaction under Section 271AA, irrespective of whether the pricing is found to be arm’s length. Form 3CEB, certified by a Chartered Accountant, must be filed along with the income tax return.

Q: How long does it take to close a branch office and set up a subsidiary in its place?
A: The full transition takes nine to fifteen months end to end. Branch closure requires AD bank no-objection, income tax clearance, RoC compliance confirmation, and RBI approval for repatriation of winding-up proceeds. The subsidiary can be incorporated in three to five weeks via SPICe+, but operationalising it (banking, GST, contracts, employment) takes longer. Both entities may run in parallel for several months, creating dual compliance obligations during the transition.

Q: Which structure is better if the India operation is not yet revenue-generating?
A: Neither. A liaison office is the correct structure for a pre-revenue, market-exploration presence. It permits relationship-building, market research, and preparatory activities without the tax and compliance load of a branch or subsidiary. Once revenue is imminent, a subsidiary is the correct next step. Using a branch office for pre-revenue activities creates disproportionate compliance obligations (AAC, DGP reporting, Form FC-3) relative to the commercial activity being conducted.

Regulatory references:

• Income Tax Act 1961, Section 115BAA (concessional tax rate for domestic companies, 22%)
• Income Tax Act 1961, Section 115BAB (concessional tax rate for new manufacturing companies, 15%)
• Income Tax Act 1961, Section 115JB (Minimum Alternate Tax)
• Income Tax Act 1961, Chapter X, Sections 92 to 92F (transfer pricing)
• Income Tax Act 1961, Section 92D (transfer pricing documentation)
• Income Tax Act 1961, Section 271AA (penalty for failure to maintain TP documentation)
• Companies Act 2013, Sections 379 and 380 (foreign company registration)
• Companies Act 2013, Chapter XXII (provisions relating to foreign companies)
• Foreign Exchange Management Act 1999, Section 13 (penalties for contravention)
• Foreign Exchange Management Act 1999, Section 15 (compounding of contraventions)
• FEMA (Establishment in India of a Branch Office or Liaison Office or Project Office) Regulations 2016, Notification No. FEMA 22(R)/RB-2016 dated 31/03/2016
• RBI Master Direction on Establishment of BO/LO/PO by Foreign Entities (as amended)
• GST Act 2017 (registration thresholds and compliance)
• Payment of Gratuity Act 1972 (branch employee obligations)

External sources:

• Reserve Bank of India
• Ministry of Corporate Affairs
• Income Tax India
• GST Council / CBIC