Form 49C: Key Information and Filing Procedure

Form 49C is an essential compliance requirement for non-residents operating Liaison Offices in India. It is mandated under Section 285 of the Income Tax Act and Rule 114DA of the Income Tax Rules, this form ensures transparency in reporting the activities of such offices. It must be filed annually and verified by a Chartered Accountant or an authorised signatory designated by the non-resident entity. The filing process is streamlined through the Income Tax Department’s online portal, making compliance more accessible. This guide provides a comprehensive overview of Form 49C, its applicability, filing procedure, and key compliance aspects.

Latest Update: Extension of Form 49C Filing Deadline

The Central Board of Direct Taxes (CBDT) has introduced an amendment to the Income-tax Rules, 1962, extending the filing deadline for Form 49C. As per the Income-tax (Fourth Amendment) Rules, 2025, the revised deadline now allows foreign companies with a Liaison Office (LO) in India to submit Form 49C within eight months from the end of the financial year instead of the previous 60-day deadline.

This extension provides additional time for LOs to gather and report accurate financial and operational details, aligning the compliance timeline more closely with other regulatory requirements. The amendment came into effect from the date of its publication in the Official Gazette.

Below, we have attached the official CBDT notification regarding the extension of the Form 49C Filing Deadline,

What is Form 49C?

Form 49C is a mandatory annual compliance form that foreign companies with Liaison Offices in India must file under RBI guidelines. Introduced in 2011, it serves a purpose similar to a corporate tax return for branch offices or subsidiaries of foreign entities. As per Section 285 of the Income Tax Act, Form 49C must be submitted online to the Indian tax authorities within 60 days of the financial year’s end. For instance, for the financial year ending March 31, 2016, the due date was May 30, 2016. This filing ensures regulatory transparency and compliance with Indian tax laws.

Who is required to Submit Form 49C?

As mentioned, Foreign companies that have established a Liaison Office (LO) in India, as per the Reserve Bank of India (RBI) guidelines, must submit Form 49C. As per RBI regulations, the LO is a communication channel between headquarters and Indian companies. Hence, engaging in commercial activities directly or indirectly is not allowed. However, it was observed that, in some instances, LOs were involved in commercial activities, which made the government introduce Form 49C as a reporting requirement.

Information required to be Filled in Form 49C

The information to be filled in the form 49C is given below:

• General Company and LO Details: This includes the foreign company’s name, address, Permanent Account Number (PAN), and details of RBI approval for setting up the LO in India.
• Annual Activity Certificate: Information about the annual activity certificate issued by a Chartered Accountant.
• Financial Transactions: Details of receipts, income, and expenses of the foreign company related to Indian operations.
• Trade Activities: Information on the purchase or sale of materials and services between foreign companies and Indian entities.
• Employee Information: Details of employees working at the LO, including salaries paid outside India for services rendered in India.
• Business Representatives: Information about agents, representatives, and distributors operating on behalf of the foreign company in India.
• Key Business Associations: Details of Indian companies with which the LO has actively liaised on behalf of its parent company.
• Products and Services: A description of the products and services for which the LO has engaged in liaison activities.
• Group Entities: Information regarding the parent company and other associated entities for which the LO has been conducting liaison activities in India.

How to File Form 49C?

Below, we have given the step-by-step process to file Form 49C:

• Visit the Portal: Go to Income Tax India e-Filing Portal
• Login: Access the portal using the respective credentials.
• Navigate to the Form Section: Click on the "e-File" menu and select "Prepare and Submit Online Form (Other than ITR)".
• Select the Form and Details: Choose Form 49C, select the relevant Assessment Year, and upload the Digital Signature Certificate (DSC) of the authorized person verifying the form.
• Fill in the Required Information: Review the instructions, complete the form with the necessary details, and upload any required attachments.

Once all details are correctly entered, submit the form to ensure compliance with Indian tax regulations.

Annual Activity Certificate

As per RBI guidelines, a Liaison Office (LO) in India must submit an Annual Activity Certificate (AAC) issued by a Chartered Accountant. This certificate confirms that the LO’s activities during the financial year aligned with RBI’s approval. Additionally, the LO must submit audited financial statements for the year ending 31st March to the RBI by 30th September.

A notable inconsistency arises as Form 49C must be filed with the Income Tax Department within 60 days of the financial year-end, whereas the AAC deadline allows up to six months. However, this difference could reflect a legislative intent to keep the income tax independent from the RBI. 

Conclusion 

In conclusion, Form 49C is a crucial compliance requirement for foreign companies operating Liaison Offices in India, ensuring transparency and regulatory adherence. The filing process, though straightforward, demands careful attention to detail, including financial transactions, business associations, and employee details. The recent extension of the filing deadline to eight months provides additional flexibility for LOs to meet their reporting obligations effectively. By complying with Form 49C requirements and submitting the Annual Activity Certificate as mandated, foreign companies can maintain seamless operations while adhering to Indian tax and regulatory frameworks.

FAQs

1. What is Form 49C?

Form 49C is an annual compliance form that foreign companies with Liaison Offices (LOs) in India must file under Section 285 of the Income Tax Act. It reports the activities, financial transactions, and business operations of the LO in India.

2. Who is required to file Form 49C?

Foreign companies that have established a Liaison Office in India, as per RBI guidelines, must file Form 49C annually with the Income Tax Department.

3. What is the due date for filing Form 49C?

As per the latest amendment, Form 49C must be filed within eight months from the end of the financial year, replacing the previous 60-day deadline.

4. How can Form 49C be filed?

Form 49C must be submitted online through the Income Tax e-Filing Portal. Users must log in, navigate to the "e-File" section, select the form, and submit it with a Digital Signature Certificate (DSC).

5. What details are required in Form 49C?

The form requires information about the foreign company and LO, annual activity certificate, financial transactions, trade activities, employee details, business representatives, key associations, and products/services liaised.

6. Is a Chartered Accountant’s certification required for Form 49C?

While filing Form 49C, details of the Annual Activity Certificate (AAC) issued by a Chartered Accountant must be provided. This certificate confirms that the LO’s activities comply with RBI guidelines.

7. Can Form 49C be revised after submission?

Currently, there is no provision for revising Form 49C once submitted. Any discrepancies may require clarification through separate correspondence with tax authorities.

8. How does the extension of the Form 49C deadline benefit Liaison Offices?

The extended deadline provides additional time for LOs to prepare and report accurate financial and operational details, aligning with other compliance timelines such as the AAC submission deadline.