Business

Company secretarial software in India is no longer only for large listed companies. Even private limited companies and LLPs now face complex secretarial and compliance work under the Companies Act, 2013. Many promoters still manage everything on email, Excel and scattered Word files. The result is missed deadlines, inconsistent documents and stress during every year end.

This guide explains why company secretarial software in India is becoming essential for companies and LLPs, and how CoSecAI (https://cosecoffice.com) can help boards, founders and in-house company secretaries manage secretarial and compliance work in a more reliable way.

Why company secretarial software in India matters for private companies and LLPs

For a typical Indian company or LLP, secretarial and compliance work includes:

• Maintaining registers of members, directors and charges
• Preparing board and shareholder meeting notices, agendas and minutes
• Filing annual returns and financial statements
• Recording share capital changes, rights issues and private placements
• Tracking director disclosures like MBP 1 and DIR 8
• Staying updated on Companies Act amendments and MCA filings

When this work is managed manually in Word and Excel, some common problems appear:

1. Templates are scattered across laptops and email threads

2. Different versions of the same resolution or notice are used by different people

3. Compliance dates are tracked in personal calendars instead of a central system

4. Statutory registers are updated late or only before an audit or due diligence

5. There is no quick way for management to see pending secretarial work across group entities

Company secretarial software in India is designed to fix these problems by bringing templates, registers, compliance tracking and approvals into a single system.

Related: Compliance hygiene for Indian businesses simple documentation habits that prevent future pain (link: /blog/compliance-hygiene-indian-businesses)

What is CoSecAI and how does it work for companies and LLPs

CoSecAI, available at https://cosecoffice.com, is company secretarial software and a CS practice platform built for Indian conditions. While it is designed primarily for practising Company Secretaries, it is equally useful for in-house secretarial and compliance teams in companies and LLPs.

Key points for companies and LLPs:

• Cloud based company secretarial software in India, accessible from browser
• Library of 50 plus commonly used board and shareholder documents
• AI assisted drafting that uses Companies Act, 2013 context to suggest language
• Compliance calendar to track important dates like AGM, MGT 7, AOC 4
• Digital statutory registers that can be exported to Excel whenever needed
• Support for multiple group companies and LLPs on one account

For many companies, the immediate benefit is that secretarial work moves from ad hoc Word files to a structured workflow where drafts, approvals and final versions are organised.

Related: Annual compliance checklist for Indian private limited company (link: /blog/annual-compliance-checklist-indian-private-limited-company)

How CoSecAI helps boards and promoters reduce compliance risk

Boards and promoters often depend fully on their company secretary or external PCS for secretarial compliance. CoSecAI does not replace the professional. Instead, it gives both management and the CS a clearer view of what is pending and what is completed.

Some practical examples of how company secretarial software in India like CoSecAI helps:

1. Compliance calendar and reminders

• All key forms and events such as AGM, MGT 7, AOC 4, MSME and DPT 3 can be tracked in one place
• Email reminders can be sent to management and finance teams for upcoming deadlines
• Promoters can log in and see status without waiting for manual updates

2. Better documentation for funding and due diligence

• Investors often ask for board and shareholder resolutions, registers and historical filings
• CoSecAI keeps resolutions and statutory registers in a central system, ready for export
• This reduces last minute scrambling when term sheets arrive

3. More consistent quality of minutes and resolutions

• Templates are standardised and updated centrally
• AI assisted drafting helps maintain consistent language across group entities
• Review effort is reduced for senior management and the CS

4. Clear separation between draft and final versions

• Draft documents stay in the system until approved
• Only final versions are exported for physical signing or e signing
• This avoids confusion over which version went to ROC or to the board

Related: Corporate governance for Indian private companies practical board basics (link: /blog/corporate-governance-indian-private-companies-basics)

Why CoSecAI is useful for in-house company secretaries

In-house company secretaries face a different set of challenges compared to practising CS. They usually handle:

• Multiple group entities, subsidiaries and LLPs
• Cross functional coordination with finance, HR and legal teams
• Frequent board and committee meetings
• Interactions with investors, lenders and regulators

Using company secretarial software in India like CoSecAI gives in-house CS teams:

1. One view of all entities

• Add each company or LLP with its CIN and basic details
• Track upcoming meetings, filings and actions for all entities on a single dashboard

2. Faster drafting of standard documents

• Use 50 plus existing templates for common actions such as appointment of directors, change of registered office, adoption of policies and issue of shares
• Generate first drafts quickly and then customise where needed

3. Better coordination with external PCS and CAs

• Share structured information and draft documents rather than forwarding scattered Word files
• Use system generated templates to reduce back and forth on formats

4. Easier audits and board reviews

• Keep statutory registers updated in the system
• Export required registers and resolutions for secretarial audit or internal review

Related: Good practices for Indian businesses building strong processes from day one (link: /blog/good-practices-indian-businesses-processes)

Getting started with company secretarial software in India using CoSecAI

Companies and LLPs that want to shift from manual secretarial work to a software based approach can follow a simple sequence:

1. Visit https://cosecoffice.com and sign up for an account

2. Add your first company or LLP using CIN and basic details

3. Import existing director and shareholder data from Excel if available

4. Set up the compliance calendar for the current year and add any custom reminders

5. Create and test a few sample documents such as board resolutions for routine matters

6. Gradually move recurring secretarial work such as annual filings and board meetings into CoSecAI

For many organisations, company secretarial software in India becomes the system of record for secretarial documents within a few months. It reduces risk for promoters and boards and makes life easier for in-house company secretaries.

Related: Compliance documentation for Indian businesses setting up a simple system that actually works (link: /blog/compliance-documentation-indian-businesses)

Income tax rules for NRIs investing in India are a priority area under the new income tax regime. Many non resident Indians hold property, bank deposits, shares and mutual funds in India and want clarity on how their income will be taxed. This guide explains key income tax rules for NRIs investing in India, including TDS, return filing and repatriation.

Residential status and scope of taxation for NRIs

Before applying income tax rules for NRIs investing in India, it is essential to fix residential status under new income tax law. An NRI is generally taxed in India only on income that is received in India or that accrues or arises in India.

For NRIs investing in India, taxable income typically includes:

• Interest on NRE, NRO and FCNR deposits depending on account type.
• Rental income from property located in India.
• Capital gains on sale of shares, mutual funds and immovable property in India.
• Dividend income from Indian companies.

Residential status also impacts reporting of foreign assets if the person becomes resident again in a later year.

Related: Residential status under new income tax law in India (link: /blog/residential-status-under-new-income-tax-law-india)

Interest income and TDS for NRIs

Income tax rules for NRIs investing in India differentiate between various bank accounts:

1. NRE accounts

• Interest on NRE savings and fixed deposits is generally exempt for NRIs under specific conditions.
• Repatriation of funds is usually allowed freely.

2. NRO accounts

• Interest on NRO accounts is taxable in India.
• Banks deduct TDS at special rates for NRI interest income.

3. FCNR deposits

• Interest on FCNR deposits may be exempt while the person remains non resident.

NRIs should check DTAA relief with their country of residence, as treaty rates for interest may be lower than domestic TDS rates.

Rental income from property in India

Income tax rules for NRIs investing in India treat rental income similarly to residents in many ways, but with some extra TDS compliance:

• Tenant or payer may have to deduct TDS at higher rates when paying rent to an NRI.
• NRIs can claim standard deduction for repairs on rental income from house property.
• Municipal taxes actually paid can be deducted while computing taxable income.

Checklist for NRIs with rental income:

1. Ensure that the tenant has correct PAN details and deducts TDS at correct rate.

2. Obtain Form 16A or TDS certificates from the tenant.

3. File income tax return in India declaring gross rent, deductions and TDS.

4. Consider DTAA to claim credit of Indian tax in home country if applicable.

Related: What NRIs should know before letting out property in India (link: /blog/nri-letting-out-property-india-guide)

Capital gains on shares, mutual funds and property

Income tax rules for NRIs investing in India specify holding period, rate and TDS rules for capital gains:

• Listed shares and equity oriented mutual funds have separate short term and long term capital gain rules.
• Debt mutual funds and bonds follow different holding period rules.
• Sale of immovable property in India by NRIs attracts TDS at specified rates on the sale consideration.

Key practical points:

1. Obtain lower deduction certificate from the Assessing Officer where capital gains are lower than standard TDS on sale value.

2. Maintain contract notes, purchase documents and improvement cost records.

3. Use specified modes for receipt and repatriation of sale proceeds, following RBI rules.

Related: Income tax on sale of property in India by NRIs (link: /blog/income-tax-sale-property-india-nris)

Return filing and compliance for NRIs

Even when TDS is deducted at source, income tax rules for NRIs investing in India may still require filing of return of income if:

• Total income exceeds the basic exemption limit, or
• There is long term capital gain eligible for special treatment, or
• The NRI wants to claim refund of excess TDS or relief under DTAA.

Compliance checklist for NRIs:

1. Maintain updated KYC and PAN details with banks, brokers and tenants.

2. Track TDS credits in Form 26AS and Annual Information Statement.

3. File income tax return using the correct ITR form for NRIs.

4. Disclose foreign assets if required in a year when residential status changes.

Official references for NRI investors

NRIs should regularly review official guidance on income tax rules for NRIs investing in India. Helpful links are:

• Income Tax Department NRI section: https://www.incometaxindia.gov.in
• RBI guidelines on NRE, NRO and FCNR accounts.
• CBDT circulars on TDS, DTAA relief and special provisions for non residents.

Income tax rules for NRIs investing in India are becoming more data driven and information rich, with AIS and SFT reporting. With timely planning and proper documentation, NRIs can stay compliant while making full use of investment opportunities in India.

New income tax act for small businesses in India is a major focus area for proprietors, partnership firms, LLPs and closely held companies. Many FastLegal clients want to know how the new income tax act for small businesses in India will affect their tax rates, compliance burden and choice of business structure. This guide gives a practical overview.

Who is a small business under new income tax act

The new income tax act for small businesses in India is expected to continue using a mix of turnover, profit and legal form conditions to decide which provisions apply. Typical small businesses include:

• Proprietorship concerns
• Partnership firms and LLPs
• Small private limited companies
• Startups and professional practices with modest turnover

Key parameters that matter under new income tax act for small businesses in India include:

• Turnover threshold for tax audit and presumptive taxation
• Applicability of lower corporate tax rates
• Deduction limits for expenses, depreciation and interest

Choice of business form under the new regime

Small business owners often ask whether they should operate as proprietorship, partnership, LLP or company under new income tax act for small businesses in India. Factors to consider are:

1. Tax rates

• Individual slab rates for proprietorships.
• Flat rates plus surcharge and cess for firms and companies.
• Special lower corporate tax rates for certain domestic companies.

2. Limited liability and risk management

• Proprietorships do not offer limited liability.
• LLPs and companies give separation between business and personal assets.

3. Compliance and maintenance costs

• Company form involves more filings under company law as well as tax law.

Related: Income tax rules for professionals and consultants in India (link: /blog/income-tax-rules-professionals-consultants-india)

Presumptive taxation under new income tax act for small businesses

Presumptive taxation schemes allow eligible small businesses and professionals to declare income at a fixed percentage of turnover or receipts instead of maintaining detailed books. Under new income tax act for small businesses in India, these schemes may continue with updated turnover limits and percentages.

Important points:

• Turnover or gross receipts must be within prescribed limits.
• Declared profit percentage may differ for businesses and professionals.
• Cash receipt restrictions may apply for presumptive benefit.

Checklist for using presumptive taxation:

1. Verify eligibility based on business type and turnover.

2. Review impact on loan eligibility and financial reporting.

3. Ensure that you are comfortable with profit percentage in comparison to actual margins.

4. File income tax return in the correct form within due date.

Related: Checklist for small business income tax return filing in India (link: /blog/checklist-small-business-income-tax-return-india)

Books of account, audit and compliance

Under new income tax act for small businesses in India, maintenance of books of account and audit requirements will remain central. Small businesses must:

• Maintain proper books of account, vouchers and supporting documents.
• Maintain separate bank accounts for business transactions.
• Reconcile turnover with GST returns where applicable.
• Track TDS collected and TDS suffered on payments.

Tax audit requirements will apply based on turnover limits, profit percentages and cash transaction conditions as set out in the new law and rules. Non compliance can lead to penalties and disallowance of expenses.

Paying advance tax and managing cash flow

Small businesses must pay advance tax under the new income tax act:

• In four instalments based on estimated income, or
• Under presumptive schemes, often in one instalment by a specified date.

New income tax act for small businesses in India will likely keep interest for default or deferment of advance tax. To manage cash flow:

1. Prepare quarterly profit and loss statements.

2. Estimate annual taxable income after reasonable adjustments.

3. Compare with advance tax already paid and make up shortfalls on due dates.

4. Keep separate reserve for taxes in your bank account.

Digital compliance and utilities

The Income Tax Department provides online utilities for small businesses to comply with new income tax act for small businesses in India:

• Online registration and PAN based login.
• E filing utilities for income tax returns of proprietors, firms and companies.
• Online payment facility for advance tax and self assessment tax.
• Pre filled data from AIS, TDS and GST for reconciliation.

Useful link: https://www.incometax.gov.in

Related: Step by step guide to filing ITR for partnership firms (link: /blog/step-by-step-itr-filing-partnership-firms)

Practical tips for FastLegal clients

Here are some practical tips for small businesses preparing for new income tax act in India:

1. Choose the right business form considering long term growth and funding.

2. Keep clean digital records for invoices, expenses and bank statements.

3. Match sales and purchases between GST and income tax records.

4. Use accounting software that is updated for new income tax act for small businesses in India.

5. Review your drawings, partner remuneration and interest to partners in light of new limits.

6. Have a yearly tax planning review before year end instead of last minute rush.

Related: Tax planning for small private limited companies in India (link: /blog/tax-planning-small-private-limited-companies-india)

New income tax act for small businesses in India is not only about rate changes. It is also about better record keeping, digital compliance and risk management. With some planning and the right professional support, small businesses can stay compliant and still focus on growth.

TDS on salary in India under new income tax act is one of the most common compliance obligations for employers. Every month, HR and finance teams must deduct and deposit tax from employee salaries under section 192 type provisions and related rules. This guide explains how TDS on salary in India under new income tax act will work, what information employers must collect, and how employees can plan their tax liability.

Basics of TDS on salary in India under new income tax act

TDS on salary in India under new income tax act will continue to follow the principle that tax is deducted at average slab rate based on estimated annual income of the employee. Key elements are:

• Employer is responsible to estimate annual taxable salary for each employee.
• Applicable tax rate is determined based on the chosen regime, new regime or any alternative if permitted.
• TDS on salary is deducted every month or at the time of payment, whichever is earlier.
• Any shortfall or excess is adjusted in remaining months of the year.

Employers must also consider surcharge, health and education cess, and any relief under section 89 for arrears or advance salary.

Information HR must collect for TDS on salary

To compute TDS on salary in India under new income tax act correctly, HR and payroll teams should collect the following details from employees at the start of the year and update them during the year:

1. Declaration of expected income from all employers, including previous employer salary and TDS details.

2. Details of other income such as house property income, interest, and any eligible loss to be adjusted, where permitted.

3. Choice of tax regime for the year and confirmation in the prescribed manner.

4. Investment declarations and proofs if any deductions are allowable under the new law.

A simple checklist for HR:

• Obtain employee PAN and Aadhaar as required.
• Collect regime selection declarations.
• Capture previous employer Form 16 or salary statement.
• Configure payroll software to apply new income tax slabs and rules.

Related: New income tax act for salaried employees overview (link: /blog/new-income-tax-act-salaried-employees-overview)

Step by step calculation of TDS on salary

Here is a practical step by step method for computing TDS on salary in India under new income tax act:

1. Compute gross annual salary

• Basic salary
• Dearness allowance where applicable
• House rent allowance
• Special allowance and other allowances
• Bonus, incentives and variable pay based on expected payouts

2. Subtract exempt allowances and perquisites

• HRA exemption based on rent details, if allowed under new law
• Leave travel allowance where permitted
• Exempt portion of food benefits, LTA and other perquisites as per rules

3. Subtract standard deduction and other allowable deductions

• Standard deduction for salaried employees as specified
• Deductions for specified investments, insurance, NPS etc, if allowed under the chosen regime

4. Determine total taxable salary income

5. Add other taxable income reported by employee

• Interest on deposits
• Rental income after standard deduction
• Any other income that the employee wants the employer to consider

6. Apply slab rates under the chosen regime

• Apply income slabs and rates as notified under the new income tax act
• Add surcharge based on income level
• Add health and education cess at applicable rate

7. Divide total annual tax by remaining months in the year

8. Deduct TDS on salary in India under new income tax act every month and show in payslip.

Related: Checklist for payroll TDS compliance under new income tax rules (link: /blog/checklist-payroll-tds-compliance-new-rules)

Common mistakes in TDS on salary and how to avoid them

Some common mistakes that FastLegal sees in TDS on salary in India under new income tax act are:

• Not updating TDS after mid year salary revision or promotion.
• Ignoring previous employer salary and TDS, leading to short deduction.
• Applying old regime deductions when employee has chosen new regime, or the reverse.
• Misclassifying allowances that are fully taxable under new rules.
• Delay in deposit of TDS and filing of TDS returns, which leads to interest and late fees.

To avoid these issues, employers should:

• Use updated payroll software that reflects new income tax act and rule changes.
• Put in place a standard process to collect declarations and proofs by fixed cut off dates.
• Run a quarterly reconciliation between tax deducted and estimated annual tax.

TDS certificates, Form 16 and employee experience

Under the new income tax act, employee experience with TDS on salary in India is as important as technical compliance. HR teams should:

• Issue accurate Form 16 within the prescribed timeline.
• Ensure that employee PAN is correctly quoted and TDS is reflected in Form 26AS and AIS.
• Provide employees with annual tax computation statements explaining how TDS on salary in India under new income tax act has been worked out.
• Help employees understand the impact of investment choices and regime selection.

Related: Guide to reading Form 16 and Form 26AS for salaried taxpayers (link: /blog/guide-reading-form16-form26as-salaried)

Official utilities and references for TDS on salary

Employers should always cross check their TDS on salary process with official resources. Useful links are:

• Income Tax Department TDS on salary calculator and utilities: https://www.incometaxindia.gov.in
• TDS return preparation utilities and file validation tools from the department.
• CBDT circulars each year explaining TDS on salary in India under new income tax act and applicable slab rates.

TDS on salary in India under new income tax act is the front line of tax compliance for employers. Getting it right reduces notices, employee grievances and last minute rush at year end. FastLegal can help you review your payroll processes and align them with the new law, rules and official utilities.

From 1 April 2026, the new Income Tax Act, 2025 will replace the old Income Tax Act, 1961 for current years. One of the biggest practical changes for businesses and professionals is the renumbering and restructuring of income tax forms.

If you are used to forms like 15CA, 15CB, 26QB and 10F, you now need to know their new form numbers under the Income Tax Act, 2025. This guide explains how forms are shown on the income tax e-Filing portal, gives examples of new and old form numbers, and shares a practical checklist for updating your compliance.

How to find forms on the e-Filing portal under the new law

On the income tax e-Filing portal, forms are now organised in three tabs. When you log in and go to the forms section, you should first select the correct tab:

1. Forms as per Income Tax Act 2025

Use this tab for forms that relate to the new Income Tax Act, 2025. For financial years starting 1 April 2026 onwards, this will be the primary tab.

2. Forms as per Income Tax Act 1961

Use this tab for forms relating to the earlier Income Tax Act, 1961. This is relevant for past years and certain transitional filings.

3. Forms as per Other Acts

Use this tab for forms under other laws that are still filed on the income tax portal. For example, equalisation levy or certain TDS related forms.

Action point: before starting any filing, always confirm which Act applies to the year and purpose, and choose the correct tab. This will avoid uploading the right information under the wrong law.

Common forms and their new numbers under the Income Tax Act 2025

The CBDT has given a mapping of forms under the new Income Tax Act, 2025 to their equivalents under the Income Tax Act, 1961. Some important examples for day to day business use are:

1. Certificates and declarations for TDS and TCS

• Declaration to receive income without deduction of tax
• Old: Form 15G or 15H under ITA 1961
• New: Form 121 under ITA 2025
• Use: For eligible taxpayers to declare that their income is below taxable limit so that tax need not be deducted at source.

• Declaration for buying goods without tax collection at source
• Old: Form 27C under ITA 1961
• New: Form 127 under ITA 2025
• Use: For buyers to obtain goods without TCS in specified cases.

• Challan cum statement for certain TDS payments
• Old: Forms 26QB, 26QC, 26QD, 26QE under ITA 1961
• New: Form 141 under ITA 2025
• Use: For TDS on purchase of property, rent and other specified payments under section 393(1).

2. Forms for payments to non residents

• Information for remittance to non resident
• Old: Form 15CA
• New: Form 145
• Use: To report details of payments made to non residents or foreign companies.

• Certificate of an accountant for foreign remittances
• Old: Form 15CB
• New: Form 146
• Use: Chartered accountant certificate for certain foreign remittances to confirm correct tax deduction.

3. Registration and approval of charitable and non profit entities

• Application for provisional registration or approval
• Old: Form 10A
• New: Form 104
• Use: For trusts, NGOs and similar organisations to apply for provisional registration or approval.

• Application for final registration or approval
• Old: Form 10AB
• New: Form 105
• Use: For registration under section 332 and approval for deduction under section 133(1)(b)(ii).

• Order for provisional registration or approval
• Old: Form 10AC
• New: Form 106
• Use: For orders granting or rejecting provisional registration.

• Statement of donations and certificate to donors
• Old: Form 10BD (statement) and 10BE (certificate)
• New: Form 113 (statement or correction statement) and Form 114 (certificate of donation)

4. Forms for international tax planning and disputes

• Certificate of residence and treaty related filings
• Old: Form 10F and 10FA
• New: Forms 41 and 42
• Use: For providing information under section 159, and for application for certificate of residence under tax treaties.

• Advance Pricing Agreements (APA) and related filings
• Old: Forms 3CEC, 3CED, 3CEDA, 3CEF
• New: Forms 50, 51, 52
• New dedicated renewal form: Form 54 (no direct old equivalent)
• Use: For APA pre-filing, application, compliance and renewal.

• Mutual agreement procedure (MAP)
• Old: Form 34F
• New: Form 55
• Use: For Indian residents seeking to invoke MAP under tax treaties.

5. Special sector forms

• Affordable housing and semiconductor projects
• Old: Forms 3CN, 3CS
• New: Forms 18 and 19

• Agricultural extension projects
• Old: Form 3C-O
• New: Form 20

• Tonnage tax scheme
• Old: Form 65
• New: Form 80

There are also separate forms for pension funds, sovereign wealth funds and units in International Financial Services Centres (IFSC) under the new schedules and notifications.

Related: New income tax act for small businesses in India overview (link: /blog/new-income-tax-act-small-businesses-overview)

What businesses and professionals should do now

Even before 1 April 2026, it is sensible to get ready for the new form regime. A simple three step approach can help:

Step 1: Map your current forms

• List all income tax forms you and your clients use frequently.
• Include TDS, TCS, foreign remittance, property TDS, donation reporting and NGO registration forms.
• Use the official ITA 2025 mapping guide to write the new form number next to the old one.

Step 2: Update your processes and templates

• Change form references in your standard engagement letters, tax calculation sheets and SOPs from the old ITA 1961 numbers to the new ITA 2025 numbers.
• Update any checklists that staff follow during return season.
• If you use practice management or ERP software, ask your vendor to update form names and numbers.

Step 3: Train your team and clients

• Conduct a short training session or webinar explaining:

1) The three tabs on the e-Filing portal

2) The most common form mappings relevant to your practice

3) Any new forms that may now apply

• For key clients, share a one page cheat sheet listing old and new form numbers for their regular compliance.

Related: Checklist for salaried employees filing income tax return in India (link: /blog/checklist-salaried-employee-income-tax-return-new-act)

How FastLegal can help with the new income tax forms

FastLegal works with small businesses, professionals, NRIs and startups to keep their tax compliance simple even when the law changes. For the new Income Tax Act, 2025 and form changes, we can assist with:

1. Mapping your current compliance to the new forms and sections

2. Updating your annual compliance calendar and checklists

3. Handling foreign remittance certificates (new Forms 145 and 146)

4. Structuring NGO and charitable registrations under the new regime

5. Coordinating with your CA for APA, MAP and international tax filings where required

The goal is to make sure that form renumbering does not lead to missed deadlines, wrong filings or penalties.

Official references and further reading

Official references you should bookmark:

• Income Tax Department e-Filing portal
• CBDT notifications and circulars on the Income Tax Act, 2025
• Official form mapping guide from the Income Tax Act, 1961 to the Income Tax Act, 2025

If you want a customised form mapping sheet for your business or practice, you can reach out with your current forms list and we will prepare a tailored ITA 2025 mapping.

Residential status under new income tax law in India is one of the most important concepts for both individuals and businesses. It decides which income is taxable in India and which stays outside the tax net. This article explains residential status under new income tax law in India, how it is determined, and what it means for your global income.

Why residential status under new income tax law in India matters

Residential status under new income tax law in India is not about your citizenship or visa. It is a year by year test based on how many days you stay in India and other tie breaker conditions. Once your residential status is fixed for a year, it controls:

• Whether your global income is taxable in India or only Indian income
• How DTAA relief is applied for foreign income
• Whether you must report foreign assets and bank accounts
• TDS and advance tax planning under the new regime

For many FastLegal clients, small changes in travel days can change their residential status under new income tax law in India and lead to unexpected tax demands.

Basic tests for residential status under the new Income tax Act

Under the new Income tax Act, the basic tests to decide if an individual is resident in India generally follow these broad principles:

1. Stay in India for at least a minimum number of days during the relevant previous year, for example 182 days or more in many cases.

2. Or a combination rule where presence in India in the current year and during the last few years is counted together.

3. Special rules for Indian citizens and persons of Indian origin who visit India.

The exact day count and conditions will be given in the final enacted sections of the new Income tax Act and corresponding rules. You must always read the section language, explanations and provisos before applying the conditions in practice.

Resident, not ordinarily resident, and non resident under new income tax law

Once the day count test is applied, individuals are normally classified into three buckets under new income tax law:

• Resident and ordinarily resident (ROR)
• Resident but not ordinarily resident (RNOR)
• Non resident (NR)

Residential status under new income tax law in India will define how much of your income is taxed as follows in broad terms:

1. Resident and ordinarily resident

• Taxable in India on global income, that is income earned or received anywhere in the world.
• Must report foreign assets, foreign bank accounts and investments.
• Full disclosure requirements under income tax return forms and foreign asset schedules.

2. Resident but not ordinarily resident

• Taxable on income received or deemed to be received in India.
• Taxable on income that accrues or arises in India.
• Limited foreign income may be taxed if it is from a business controlled in or a profession set up in India under the detailed provisions of the new Act.

3. Non resident

• Generally taxable only on income that is received in India or that accrues or arises in India.
• Foreign income kept outside India is normally not taxed in India, subject to anti avoidance rules and special provisions.

Residential status under new income tax law for NRIs and expatriates

For NRIs and expatriates, residential status under new income tax law in India needs extra attention because:

• They may have salary income split between India and overseas payrolls.
• They may receive stock options, RSUs and bonuses that vest while they are outside India.
• They may be seconded to Indian entities or posted abroad by Indian employers.

Key points for NRIs and expatriates under new income tax law:

1. Track physical presence in India with a day wise calendar each financial year.

2. Check special exceptions for crew members of ships, seafarers and employees of Indian companies working abroad.

3. Review tie breaker rules under Double Tax Avoidance Agreements when dual residence is possible.

4. Consider tax equalisation policies and home country tax relief in structuring compensation.

Related: Residential status and DTAA relief for NRIs working in multiple countries (link: /blog/residential-status-dtaa-relief-nri)

Residential status for companies and firms under the new regime

The new Income tax Act will also define when a company, LLP or firm is resident in India. Under recent provisions, a company can be resident if:

• It is incorporated in India, or
• Its place of effective management is in India.

For businesses, residential status under new income tax law in India affects:

• Whether global profits of the company are taxed in India
• How transfer pricing and controlled foreign company rules are applied
• Obligation to file income tax return and maintain books of account in India

Indian promoters using foreign holding companies must carefully consider place of effective management tests, board meeting locations, and key management decision points.

Related: New income tax act for small businesses in India overview (link: /blog/new-income-tax-act-small-businesses-overview)

Compliance steps and practical checklist

Here is a practical checklist for determining residential status under new income tax law in India for individuals:

1. Prepare a travel summary for the financial year with entry and exit dates for India.

2. Count total days in India during the relevant year.

3. Count days in India during the preceding years as required by the statute.

4. Apply the primary residence tests and any special rules for Indian citizens and persons of Indian origin.

5. Categorise the person as ROR, RNOR or NR.

6. Map taxability of each income stream based on the residential status.

7. Plan TDS, advance tax and foreign tax credit claims accordingly.

8. Ensure correct income tax return form and foreign asset reporting where required.

Related: Checklist for non residents filing income tax return in India (link: /blog/checklist-non-resident-income-tax-return-india)

Official references and further reading

You should always cross check residential status provisions in the bare Act and in the official utilities. Useful sources include:

• Bare text of the new Income tax Act as notified by the Government of India.
• Income tax rules and forms on the Income Tax Department website: https://www.incometaxindia.gov.in
• CBDT circulars and clarifications on residential status and DTAA interpretation.

Residential status under new income tax law in India is a foundation concept. Getting it right early will help you avoid future disputes, penalties and interest. If you are an NRI, frequent traveller, expatriate employee or business owner with cross border structures, consider a detailed residential status review each year before filing your return.

Primary keyword: FEMA FDI rules for foreign companies in India

Foreign founders and overseas companies that want to enter the Indian market must understand the FEMA FDI rules for foreign companies in India. FEMA stands for the Foreign Exchange Management Act, which governs foreign investment, foreign exchange and cross border payments in India.

This guide gives a high level overview of entry options, sector wise restrictions, and core compliance requirements under FEMA and the FDI policy.

Overview of FEMA and FDI framework in India

FEMA FDI rules for foreign companies in India are mainly framed through:

• FEMA regulations issued by the Reserve Bank of India.
• Consolidated FDI Policy issued by the Government of India.
• Sector specific rules from regulators such as SEBI, IRDAI and others.

Foreign investors must check sector caps, approval routes and pricing guidelines before investing.

Useful reference sites:

• Reserve Bank of India: https://www.rbi.org.in
• Department for Promotion of Industry and Internal Trade: https://dpiit.gov.in
• Securities and Exchange Board of India: https://www.sebi.gov.in

Common entry options for foreign companies in India

Wholly owned subsidiary or joint venture company

Under FEMA FDI rules for foreign companies in India, many sectors allow 100 percent foreign direct investment under the automatic route. Foreign founders can incorporate an Indian company as a wholly owned subsidiary or jointly with Indian partners.

Key steps:

1. Incorporate an Indian company under the Companies Act through the MCA portal.

2. Issue shares to foreign shareholders at a price that meets pricing guidelines.

3. Report the foreign investment in prescribed forms to the RBI within specified timelines.

Limited liability partnership with foreign investment

In some sectors and subject to conditions, foreign investment can also be made in LLPs in India.

Important points:

• Check whether the sector allows FDI in LLPs.
• Ensure compliance with both FEMA and LLP regulations.

Liaison office, branch office or project office

Foreign companies that want a limited presence can set up liaison, branch or project offices subject to RBI permissions.

• Liaison office: communication and representation activities, no commercial operations.
• Branch office: permitted activities such as export, import and consultancy in approved sectors.
• Project office: set up for specific projects in India.

Each structure has separate eligibility conditions, activities and reporting requirements.

Automatic route vs government approval route

Under FEMA FDI rules for foreign companies in India, foreign investment can be under:

• Automatic route, where no prior government approval is needed if sector conditions are met.
• Government approval route, where investment requires approval from the relevant ministry or department.

Foreign founders should:

1. Identify the sector of their proposed Indian business.

2. Check the latest FDI policy for sectoral caps and routes.

3. Confirm if there are any special conditions for investors from certain countries.

Pricing and valuation guidelines for FDI

When issuing or transferring shares of an Indian company to foreign investors, FEMA prescribes pricing guidelines so that transactions are at or above a minimum fair value in case of issue or transfer from resident to non resident.

Typical requirements include:

• Valuation by a registered valuer or merchant banker.
• Use of accepted valuation methods such as DCF or comparable multiples depending on the stage and type of company.

Failure to follow pricing rules can lead to compounding and penalties.

Reporting and compliance under FEMA

FEMA FDI rules for foreign companies in India impose several reporting obligations.

Key forms and timelines may include:

1. Reporting of foreign investment at the time of share issue.

2. Annual returns of foreign liabilities and assets.

3. Reporting of transfer of shares between residents and non residents.

4. Reporting for downstream investment by an Indian company with foreign investment into another Indian entity.

Reporting is made through online portals designated by the RBI and government. Delayed reporting can attract late submission fees and other consequences.

Sector specific restrictions and conditions

While many sectors are open to 100 percent FDI under automatic route, some sectors have:

• Lower caps on foreign shareholding.
• Conditions on management and control.
• Specific licensing requirements.

Examples include sectors like insurance, defence, print media and certain financial services activities. Always cross check the latest policy for your specific sector.

Practical steps for foreign founders planning India entry

If you are a foreign founder evaluating the FEMA FDI rules for foreign companies in India, a practical approach is:

1. Clarify the proposed business model and sector in India.

2. Choose an entry structure such as subsidiary, LLP or office presence.

3. Check FDI caps, routes and conditions for your sector.

4. Prepare a basic investment and shareholding structure.

5. Obtain legal and tax advice on FEMA, company law and taxation.

6. Implement incorporation, bank account opening and FDI reporting in a coordinated way.

Consequences of non compliance under FEMA

Non compliance with FEMA FDI rules for foreign companies in India can result in:

• Monetary penalties and compounding fees.
• Restrictions on repatriation of funds until issues are resolved.
• Delays in future approvals and banking transactions.

Proactive compliance and timely reporting are much easier and cheaper than rectifying violations later.

Related: How foreign founders can incorporate a private limited company in India (link: /blog/foreign-founders-incorporate-private-limited-india)

Related: Tax basics for foreign owned subsidiaries in India (link: /blog/tax-basics-foreign-owned-subsidiaries-india)

Related: Checklist for liaison and branch offices of foreign companies in India (link: /blog/liaison-branch-office-checklist-india)

Primary keyword: advance tax for professionals in India

Many freelancers, consultants and independent professionals are unsure about advance tax for professionals in India. They often discover the rules only when they receive interest notices from the Income Tax Department. This guide explains when you need to pay advance tax, how to calculate it, and how to avoid common mistakes.

Who has to pay advance tax in India

Advance tax is not only for companies. It also applies to individuals, including professionals, if their total tax liability for the year is above a basic limit after considering TDS.

Broadly, you need to consider advance tax for professionals in India if:

• You earn income from freelancing, consulting, professional practice or business.
• Your total estimated tax liability for the financial year is at least the threshold notified in the law after reducing TDS.

Salaried employees usually do not need to worry about advance tax separately if their employer deducts correct TDS every month. But if you have both salary and professional income, you must still check the advance tax rules.

You can read official guidance and file returns on the income tax portal: https://www.incometax.gov.in

How to estimate your income and tax for the year

To work out advance tax for professionals in India, you first need a realistic estimate of your income.

Steps:

1. Estimate your gross receipts from professional work for the full year.

2. Deduct allowable expenses such as rent, software, staff salaries and travel.

3. Arrive at your estimated taxable professional income.

4. Add other income such as interest, capital gains or rental income.

5. Apply the correct tax slab rates and surcharge or cess as applicable.

6. Reduce any TDS that will be deducted by clients.

The remaining amount is your estimated tax liability on which advance tax will apply.

Due dates for advance tax payments

For most individual professionals in India, advance tax is payable in four instalments during the financial year.

The law prescribes specific percentages of total tax to be paid by each date. Missing these percentages or paying late can lead to interest under sections 234B and 234C of the Income tax Act.

Practical approach:

• Review your income and tax position at least before each due date.
• Adjust instalments based on updated estimates instead of waiting till year end.

Always check the latest due dates and percentages on the Income Tax Department website or with your tax advisor.

How to pay advance tax online in India

Once you have calculated the advance tax for professionals in India, you can pay it online.

Steps:

1. Visit the e pay tax section on the income tax portal at https://www.incometax.gov.in

2. Select the relevant challan for advance tax payment.

3. Enter your PAN, assessment year and other details carefully.

4. Pay using net banking, debit card or other available modes.

5. Download and save the payment receipt or challan for your records.

Make sure the correct assessment year and tax type are selected to avoid adjustment issues later.

Common mistakes made by professionals

Some frequent errors related to advance tax for professionals in India are:

1. Ignoring advance tax because income is irregular.

2. Assuming that TDS deducted by a few clients will cover all tax.

3. Not including non professional income such as capital gains.

4. Underestimating income to reduce instalments and then facing interest.

5. Forgetting to track advance tax payments when changing accounting or tax consultants.

Even if your income is uneven, you can revise your estimate at each instalment and pay the balance.

Tips to make advance tax compliance easier

1. Maintain monthly profit and loss records instead of waiting till year end.

2. Use a simple spreadsheet or accounting software to track income and expenses.

3. Reconcile TDS as per Form 26AS or AIS with your own records.

4. Keep a calendar reminder before each advance tax due date.

5. Discuss any major changes in income with your CA before the instalment dates.

Interaction with presumptive taxation schemes

Some professionals in India may be eligible for presumptive taxation schemes where income is declared at a fixed percentage of gross receipts subject to conditions.

Even under presumptive schemes, advance tax obligations can apply. You still need to:

• Estimate tax on presumptive income.
• Consider other income and TDS.
• Pay advance tax on time to avoid interest.

Always verify eligibility conditions and recent amendments before opting for presumptive schemes.

Related: Tax planning basics for Indian freelancers and consultants (link: /blog/tax-planning-freelancers-consultants-india)

Related: How to read Form 26AS and AIS for Indian taxpayers (link: /blog/how-to-read-form-26as-ais-india)

Related: Common income tax mistakes made by Indian professionals (link: /blog/common-income-tax-mistakes-indian-professionals)

Primary keyword: founders agreement in India

A clear founders agreement in India is one of the most important documents for any startup with more than one founder. It sets out ownership, roles, vesting, decision making and exit rights. Without a proper founders agreement in India, even strong ideas can collapse because of internal disputes.

This guide explains the key clauses you should consider and how to approach them in a practical way.

Why a founders agreement matters for Indian startups

Indian startups often begin as informal collaborations between friends or colleagues. Work starts on the product or service, and legal paperwork is pushed to later.

Some common problem areas when there is no written founders agreement in India:

• Disputes about who owns what percentage.
• One founder leaving with a large shareholding.
• Confusion about who is responsible for which function.
• Investors asking for clarity and not getting it.

A written agreement reduces these issues and gives a clear reference point.

When should you sign a founders agreement in India

Ideally, founders should sign the agreement:

• Before incorporating the company, or
• Immediately after incorporation but before raising external funding.

You can update or restate the founders agreement later, but documenting the basic understanding early builds trust and avoids misunderstandings.

Core clauses to include in a founders agreement

Equity split and initial ownership

This clause records how much equity each founder will hold in the company. It should match the shareholding in the incorporation documents and cap table.

Points to consider:

• Base the split on contribution of time, skills, capital and relationships.
• Avoid vague verbal promises that are not reflected in shares.
• Mention how future employee stock option pools will be handled.

Vesting and cliffs for founders

Vesting means that a founder earns their equity over time instead of getting all of it on day one. A typical structure for a founders agreement in India is:

• 4 year vesting period with a 1 year cliff.
• If a founder leaves before the cliff, they get no or very limited equity.
• After the cliff, equity vests monthly or quarterly.

Vesting aligns effort with reward and protects the company if someone leaves early.

Roles, responsibilities and time commitment

Document who is responsible for which area: product, tech, sales, operations, finance, legal and compliance. Also mention the expected minimum time commitment for each founder.

For example:

• Full time commitment from all founders after a certain funding round.
• Restrictions on working for competing businesses.

Decision making and voting rights

The founders agreement should clarify how key decisions are taken.

Examples of key decisions:

• Issuing new shares or bringing in investors.
• Approving annual budgets.
• Buying or selling important assets.
• Changing business model materially.

You can define which decisions require simple majority and which require unanimous approval.

Intellectual property ownership

All IP created by the founders for the startup should belong to the company, not to the individual founders. The agreement should confirm this and include an assignment or present assignment clause so that code, designs, brand names and content are clearly owned by the company.

Non compete and non solicitation

Indian law has restrictions on strict non compete clauses, especially after termination. However, a founders agreement in India can still:

• Restrict founders from working on competing projects while they are part of the company.
• Restrict solicitation of employees, clients or vendors for a reasonable period after leaving.

These clauses should be reasonable and tailored to Indian legal principles.

Exit, buyout and dispute resolution

The agreement should set out:

• What happens if a founder wants to leave voluntarily.
• In which cases a founder can be treated as a bad leaver versus good leaver.
• How their shares will be bought back or transferred.
• How valuation will be determined.

Use a clear dispute resolution clause and mention governing law and jurisdiction in India. You can also include arbitration where suitable.

Aligning the founders agreement with your cap table and articles

A founders agreement in India is only one part of the legal structure. It should be consistent with the companys Articles of Association, shareholder agreements and cap table.

Practical steps:

1. Map founders agreement clauses to actual shareholding and rights in the Articles.

2. Update the agreement when new investors come in and sign separate shareholder agreements.

3. Keep versions and board resolutions aligned so that there is no conflict between documents.

Common mistakes to avoid with founders agreements

1. Copy pasting foreign templates without adapting to Indian law.

2. Ignoring vesting because conversations feel awkward.

3. Not covering what happens if a founder is inactive but refuses to resign.

4. Failing to assign IP created before incorporation.

5. Missing clear treatment of personal expenses and reimbursements.

A short but clear founders agreement is better than an overly complex document that nobody understands.

Next steps for founders in India

If you have not yet signed a founders agreement in India, a simple plan is:

1. Sit with your co founders and list the major topics that worry you.

2. Draft a plain language summary of your understanding on each point.

3. Work with a startup lawyer to convert that summary into a formal agreement.

4. Get it signed and store both soft and hard copies with board records.

Related: Cap table basics for early stage Indian startups (link: /blog/cap-table-basics-indian-startups)

Related: Private limited company registration checklist for Indian founders (link: /blog/private-limited-registration-checklist-india)

Related: Understanding ESOPs for employees and founders in India (link: /blog/esops-for-indian-startups)

Primary keyword: how to set up a construction business in India

If you want to know how to set up a construction business in India, you need more than just on site experience. You must pick the right entity, complete registrations, and manage contracts and taxes correctly. This guide walks through the legal and compliance checklist for new construction and real estate contractors in India.

Decide the right structure for your construction business

The first step in how to set up a construction business in India is to choose the correct legal structure.

Common options:

1. Proprietorship.

2. Partnership firm.

3. Limited liability partnership.

4. Private limited company.

For small contractors who work on local projects and do not plan to raise funding, a proprietorship or partnership might be enough. For businesses that will handle larger contracts, government tenders or joint ventures, an LLP or private limited company offers better credibility and limited liability.

Key registrations for construction businesses in India

Company or LLP registration with MCA

If you choose a private limited company or LLP, you must register on the Ministry of Corporate Affairs portal.

• Incorporate the entity using SPICe+ (company) or FiLLiP (LLP).
• Obtain PAN and TAN.
• Open a current account.

Official information: https://www.mca.gov.in

GST registration for construction services

Most construction businesses will cross the basic turnover threshold or work with clients who require GST compliant invoices.

Steps:

1. Evaluate whether your turnover and type of construction activity require GST registration.

2. Apply online at the GST portal: https://www.gst.gov.in

3. Classify your services correctly under the right HSN or SAC code.

4. Set up invoicing and input tax credit tracking.

Local licenses and registrations

Depending on your city and state, you may need:

• Shops and Establishments registration.
• Labour department registration if you employ workers above a certain number.
• Registration under the Building and Other Construction Workers laws where applicable.
• Trade license from local municipal authorities.

Always check local rules on your state government and municipal corporation websites.

Essential agreements for construction businesses in India

Having standard agreements protects your construction business from disputes and payment issues.

Key contracts:

1. Construction contract or work order with clear scope, timelines, payment terms and penalties.

2. Sub contractor agreements when you outsource work.

3. Material supply agreements with vendors.

4. Employment or contractor agreements for key staff.

5. NDAs and non solicitation clauses when sharing designs or confidential data.

While many contractors rely on informal emails and WhatsApp messages, using written agreements reduces risk and helps in legal enforcement if something goes wrong.

Tax considerations for construction businesses

Construction businesses in India face both direct tax and indirect tax issues.

Direct tax points:

• Maintain proper books of account from day one.
• Track project wise income and expenses.
• Understand deduction of TDS on payments received and paid.
• Plan capital expenditure and depreciation on machinery and equipment.

Indirect tax points under GST:

• Confirm the correct GST rate for your type of construction project.
• Understand reverse charge mechanism where applicable.
• Claim input tax credit correctly on materials and services.

Information on income tax rules is available at https://www.incometax.gov.in

Compliance checklist before starting work on site

Before you begin work on a new site in India, run through this quick checklist:

1. Entity incorporation completed and bank account opened.

2. GST registration obtained, if required.

3. Local trade license and labour registrations completed.

4. Standard form of construction contract reviewed and ready.

5. Insurance policies in place for workers and site risk.

6. Accounting system set up for invoicing and expense tracking.

Building a compliant and scalable construction business

Knowing how to set up a construction business in India is not only about getting the first project. It is about building a structure that can scale safely.

Practical tips:

• Separate business and personal expenses fully.
• Keep written approvals and signed documents for project changes.
• Record site measurements and work completion stages carefully.
• Review contracts before bidding for large tenders.

Related: How to choose between proprietorship, partnership and company for Indian contractors (link: /blog/entity-choice-for-contractors-india)

Related: GST for construction and real estate businesses in India basic guide (link: /blog/gst-construction-real-estate-india)

Related: Key clauses in construction contracts for Indian builders and contractors (link: /blog/key-clauses-construction-contracts-india)