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Income tax, permanent establishment review, GST, TDS, transfer pricing, treaty opinions and remittance tax compliance for the project office of a foreign company.
150+ Regular Clients · Chartered Accountants and Company Secretaries · Since 2016
A project office in India is taxed as a foreign company, at 35 percent plus surcharge and cess, on profits from the project, unless a presumptive rule applies. The Indian client may deduct tax at source, a lower deduction certificate can reduce it, and the project office must pay advance tax, file a return, register for GST and treat its head office as a distinct person under GST. AU Corporate, a New Delhi firm of Chartered Accountants, handles each of these.
Written and reviewed by Abhishek Jaiin, Chartered Accountant (ICAI Membership No. 544646) · Last reviewed: 9 October 2026
The tax outcome of a project depends on the contract, its duration, who deducts tax and the treaty — see the Project Office Registration guide for how the construction/installation PE position fits the wider structure. Early planning avoids refund delays at the end of the project.
AU Corporate prepares tax workings from the project books, so the return, audit report and transfer pricing report agree.
The tax areas a project office deals with most often.
Whether and when the project creates a taxable presence, and the treaty position.
Computation of Indian profits, the return and the tax audit report.
Application to reduce tax deducted by the client.
Estimate and payment in each instalment.
Deduction on payments to subcontractors, staff and vendors.
Registration, returns, input credit and head office supplies.
Form 3CEB and documentation for group dealings.
Forms 15CA and 15CB and treaty rates.
Residence, salary tax, treaty relief and returns.
Representation before tax authorities and tribunals.
A project office pays tax as a foreign company, unless a presumptive rule applies.
| Taxable Income | Base Tax | Surcharge | Cess | Effective Rate |
|---|---|---|---|---|
| Up to INR 1 crore | 35% | None | 4% | 36.4% |
| INR 1 crore to 10 crore | 35% | 2% | 4% | 37.128% |
| Above INR 10 crore | 35% | 5% | 4% | 38.22% |
Rates apply under the Income-tax Act, 2025 and can change in each Budget, so we confirm them for your year. Treaty or presumptive rules may apply to certain income.
Five items to begin.
The contract, milestones and payment terms.
The project office's accounts and the parent's latest accounts.
PAN, TAN, GST and past returns.
Passport, visa and salary details for each expat.
Copies of any tax or GST notices received.
Reasonable fees, confirmed in writing before we start.
Not included: government fees and tax payments, customs duty advice on imported project equipment, and representation in tax disputes, which is quoted separately.
Your project office accounts, tax returns, RBI filings and ROC forms must agree with each other. The same team handles each of them.
Straight answers to the questions foreign finance teams ask most about a project office in India.
Written and reviewed by Abhishek Jaiin, Chartered Accountant (ICAI Membership No. 544646) · Last reviewed: 9 October 2026
This is general guidance based on Indian law and practice as at the date above. It is not advice for your specific case, and rules can change.
Tell us about your project office's contract value, head office dealings and any notices received, and our team will confirm the filings and representation you need.