Written by the Delhi Legal Company India Entry & FDI Advisory team · Last updated August 2026 · Reviewed against the Finance Acts, the Income-tax Act, 2025 and the Income Tax Rules, 2026
Introduction
The equalisation levy is gone. For some foreign digital businesses, that is bad news.
This is the part almost no coverage explains. The levy was withdrawn in two stages — the 2% e-commerce levy from 1 August 2024, the 6% advertising levy from 1 April 2025 — and the reporting treated it as straightforward relief. A unilateral tax removed, a compliance burden lifted, India aligning with the OECD.
But the levy never travelled alone. It came with an exemption. Income that bore the equalisation levy was exempt from Indian income tax under Section 10(50), and that exemption has sunset with the levy.
So the question for a foreign digital business is no longer “do I pay 2%?” It is “am I now within the income tax net, through significant economic presence or business connection, on income that was previously exempt?”
For a business in a jurisdiction with a favourable Indian treaty, the answer is often better than before. For a business without one, it can be materially worse — a 2% gross levy replaced by exposure to Indian income tax on attributable profits.
This guide sets out exactly what was withdrawn and when, what the Section 10(50) sunset actually does, what applies now, why your treaty position decides the outcome, and what historical exposure survives.
About this guide
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. The equalisation levy is now a historical compliance issue with a live transitional problem attached, and the transition is where the analysis actually matters.
Where a date or a provision is settled we state it. Where the outcome depends on your treaty and your thresholds — and it substantially does — we set out the test rather than a single answer.
Primary sources: the Income Tax Department for the Finance Acts, the Income-tax Act, 2025 and the Income Tax Rules, 2026; and Chapter VIII of the Finance Act, 2016 for the levy itself.
1. What was withdrawn, and exactly when
| EL 1.0 | EL 2.0 | |
|---|---|---|
| Rate | 6% | 2% |
| What it taxed | Online advertisement services provided by non-residents | E-commerce supply of goods or services by non-resident e-commerce operators |
| Introduced by | Chapter VIII of the Finance Act 2016, effective 1 June 2016 | Finance Act 2020, effective 1 April 2020 |
| Who paid it | Deducted by the Indian payer, like TDS | Self-assessed by the non-resident operator |
| Withdrawn by | Finance Act 2025 | Finance (No. 2) Act 2024 |
| Effective from | 1 April 2025 | 1 August 2024 |
The Finance (No. 2) Act, 2024 introduced a sunset provision for the 2% Equalisation Levy. It does not apply to consideration received or receivable for e-commerce supply or services on or after 1 August 2024. The original 6% Equalisation Levy on specified online advertising services was withdrawn from 1 April 2025. Equalisation Levy provisions are not applicable from Assessment Year 2026-27 onward.
1.1 A correction worth making
Some reporting states that the 2% levy ended on 1 August 2025. It did not. The Finance (No. 2) Act, 2024 provided that it does not apply to consideration received or receivable on or after 1 August 2024.
The year matters, because it determines which of your invoices fell inside the levy and which did not — and that question is still live for historical assessments.
1.2 The two payment mechanics were different
This distinction survives the withdrawal, because it determines who has historical exposure.
Under EL 1.0, the Indian payer deducted and remitted, in the manner of a withholding tax. If it was not deducted, the exposure sits primarily with the Indian business that paid for the advertising.
Under EL 2.0, the non-resident e-commerce operator self-assessed and paid. If it was not paid, the exposure sits with the overseas operator.
Groups reviewing historical periods should start by identifying which levy applied to which flow, because the answer tells them whose problem it is.
2. The Section 10(50) sunset: the part that matters
This is the provision that turns a withdrawal into a restructuring.
The sunset of Section 10(50) effective Assessment Year 2026-27 is the most consequential transitional issue. Consider a non-resident e-commerce operator that, under the pre-2024 regime, paid 2 per cent EL on Indian receipts and was exempted from income-tax under Section 10(50).
2.1 How the old regime worked
The equalisation levy and the income tax exemption were a package.
- A non-resident earned income from India that fell within the levy
- The levy was charged on the gross consideration — 6% or 2%
- Section 10(50) exempted that same income from Indian income tax
The design was deliberate. The levy was a simple gross charge in place of an income tax analysis, and the exemption prevented both applying to the same receipt.
2.2 What the sunset does
Remove the levy and remove the exemption, and the income falls back into the ordinary income tax framework.
That framework has its own nexus rules — business connection and significant economic presence — and if they are satisfied, the income is taxable under the Income-tax Act.
| Before | Now | |
|---|---|---|
| Charge | 2% or 6% on gross consideration | Income tax on attributable profits, where nexus exists |
| Basis | Gross | Net, on income attributable to Indian operations |
| Income tax exemption | Yes, under Section 10(50) | No |
| Treaty relief | Not available — levy sat outside the Income-tax Act | Potentially available — SEP is inside the Act |
| Foreign tax credit | Generally unavailable | Generally available where Indian tax is paid |
| Compliance | A simple levy return | Indian return, potentially transfer pricing, potentially a PE analysis |
2.3 So who is better off?
This is the whole question, and the answer splits sharply.
Treaty jurisdictions: often better off. The levy was outside the Income-tax Act and therefore outside India’s treaties, so no treaty relief and no foreign tax credit were available. SEP sits inside the Act, so where a treaty applies and its permanent establishment article has not been correspondingly amended, the treaty position can prevail — and treaty PE generally requires a physical or agency nexus that a purely digital business does not have.
A business in that position may now have no Indian tax at all, where before it paid 2% or 6% with no credit.
Non-treaty jurisdictions: often worse off. With no treaty to displace the domestic rule, SEP applies directly. A 2% gross levy is replaced by income tax on attributable profits, with the filing, documentation and potential transfer pricing that comes with it.
That is the point behind the observation, made when the 2% withdrawal was announced, that this could be from bad to worse for some.
3. What applies now
Two nexus rules, both inside the Income-tax Act.
3.1 Business connection
The general rule. A non-resident is taxable in India on income accruing or arising through a business connection, to the extent attributable to operations carried out in India.
For a digital business, business connection typically arises through a dependent agent, or through a person in India who habitually concludes contracts or plays the principal role leading to their conclusion.
3.2 Significant economic presence
The rule built for exactly this situation. Under the Income-tax Act, 2025, significant economic presence sits at Section 9(8)(d), with thresholds prescribed by Rule 13 of the Income Tax Rules, 2026, carrying forward the earlier position.
| Limb | Threshold |
|---|---|
| Transaction value with persons in India during the year | ₹2 crore |
| Systematic and continuous solicitation of business, or interaction with users in India | 3 lakh users |
Either limb alone is sufficient. A platform with modest Indian revenue but a large free user base is caught by the second limb, which is precisely the design intent.
Note also the carve-out: the Finance Act, 2025 clarified that activities confined to the purchase of goods in India for the purpose of export do not constitute significant economic presence.
Our guide to permanent establishment risk in India covers both rules in detail, including the treaty interaction.
3.3 It is on the return form
Significant economic presence status is a disclosure the Indian return forms ask for directly. That means the position has to be reached and documented before filing, rather than defended if an assessment follows.
4. Why your treaty decides the outcome
Under the equalisation levy this question did not arise. Now it decides everything.
4.1 The structural point
SEP is a domestic law nexus rule. Where a treaty applies, the taxpayer may take whichever position is more beneficial, and business profits are taxable in India only where the enterprise has a permanent establishment there.
A treaty permanent establishment generally requires a fixed place of business or a dependent agent. A foreign company selling digital services into India from overseas, with no Indian office, employees or agent, does not obviously have either.
So where the treaty’s permanent establishment article has not been amended to accommodate a digital nexus, the treaty position can prevail over SEP.
4.2 What to check in your specific treaty
| Article | Question |
|---|---|
| Permanent establishment | Has it been modified to reflect a digital or economic nexus? |
| Business profits | Are they taxable only where a PE exists? |
| Royalties | How is “royalty” defined, and could your software or platform payments fall within it? |
| Fees for technical services | Does the article exist, and does a make-available condition apply? |
| Limitation on benefits | Does the entity actually qualify for treaty benefits? |
4.3 The characterisation risk
Even where the PE analysis is clean, a digital business can be taxed in India if its receipts are characterised as royalty or fees for technical services rather than business profits — because those articles allocate taxing rights to the source state at a treaty rate, without requiring a PE.
This is a live issue for software, SaaS and database access payments, and it is fact and treaty specific. A business whose SEP analysis concludes “the treaty protects us” has answered only one of the two questions.
4.4 Documentation
Treaty relief requires a Tax Residency Certificate covering the period, Form 10F filed electronically, and where relevant a no-permanent-establishment declaration and beneficial ownership declaration. Under the equalisation levy none of this was needed, because there was no treaty position to establish.
See TDS on payments to your foreign parent for the mechanics.
5. The Indian payer’s position changed too
This is frequently missed, because the coverage focused on the non-resident.
Under EL 1.0, an Indian business paying a foreign platform for online advertising deducted the 6% levy and remitted it. That was the whole obligation, and no withholding tax analysis was required because Section 10(50) exempted the income.
Now there is no levy to deduct — but the payment may be subject to withholding under the ordinary provisions, depending on how it is characterised and what the applicable treaty says.
| Then | Now |
|---|---|
| Deduct 6% levy, remit, file the levy statement | Characterise the payment; apply the treaty; withhold at the correct rate; collect TRC and Form 10F; file the remittance forms |
| No treaty analysis needed | Treaty analysis is the whole exercise |
| Simple, if crude | More accurate, and more work |
An Indian subsidiary that stopped deducting the levy in April 2025 and did nothing else has a gap. The obligation did not disappear; it changed shape.
6. Historical exposure survives
Withdrawal is prospective. Everything before it remains live.
Equalisation Levy assessments for periods up to 31st March 2025 continue to be governed by the pre-amendment Chapter VIII of the Finance Act 2016. The Commissioner (Appeals) and the ITAT retain jurisdiction over EL disputes arising from these periods. The complete withdrawal of the levy with effect from 1st April 2025 does not invalidate or extinguish pending demands or refund claims for earlier periods.
Compliance obligations for prior periods survive abolition: unpaid levies, unfiled Form 1 statements and pending assessments remain enforceable, with penalties up to ₹1,000 per day.
6.1 What to review
| Period | What applied | What to check |
|---|---|---|
| 1 June 2016 – 31 March 2025 | EL 1.0 at 6% on online advertising | Whether the Indian payer deducted and remitted; whether the annual statement was filed |
| 1 April 2020 – 31 July 2024 | EL 2.0 at 2% on e-commerce supply and services | Whether the non-resident operator self-assessed and paid; whether the statement was filed |
| From 1 August 2024 | No 2% levy | Whether SEP or business connection now applies |
| From 1 April 2025 | No 6% levy | Whether withholding applies to advertising payments under the ordinary provisions |
6.2 The date-of-transaction question
Transactions from earlier periods may still be subject to review, assessment, interest, penalty or litigation. The date of the transaction, the contractual right to receive payment, invoice timing and payment terms can all matter when analysing historical exposure.
The 2% levy applied to consideration received or receivable on or after a date. For a business with long payment terms or annual contracts straddling 1 August 2024, whether a particular receipt fell inside or outside the levy is a genuine question rather than a formality.
Resolve it now, on the contracts, rather than during an assessment three years from now.
6.3 The refund side
The withdrawal does not extinguish refund claims either. A business that overpaid, or paid on transactions that were arguably outside the charge, retains its position for the earlier periods.
7. Who is affected, and how
| Business | Under the levy | Now |
|---|---|---|
| Global advertising platform, treaty jurisdiction | 6% deducted by Indian payers, no credit | Treaty PE analysis; often no Indian tax |
| SaaS provider, treaty jurisdiction, no Indian presence | 2% on Indian receipts, exempt from income tax | SEP likely crossed; treaty may protect; check royalty characterisation |
| SaaS provider, non-treaty jurisdiction | 2%, exempt from income tax | Income tax on attributable profits — materially worse |
| Marketplace facilitating sales into India | 2% on facilitated value | SEP analysis on both limbs; user numbers may matter more than revenue |
| Gaming or streaming platform with a large Indian user base | 2% on Indian receipts | User limb likely crossed — treaty position decisive |
| Foreign company with an Indian subsidiary | Levy on the non-resident’s own receipts | PE and transfer pricing analysis; the subsidiary’s own position is separate |
| Indian business buying foreign advertising | Deducted 6% and remitted | Withholding analysis on the payment |
7.1 The user-limb point
Businesses that were comfortable under the levy because their Indian revenue was small should reassess.
The levy was charged on receipts, so a small Indian revenue meant a small levy. SEP has a user limb that operates independently of revenue — systematic and continuous solicitation of business, or interaction with more than three lakh users in India.
A freemium platform with a large Indian user base and modest Indian revenue was lightly affected by the levy and can be squarely within SEP.
8. The Pillar One context
The withdrawal did not happen in isolation.
India introduced the equalisation levy and the significant economic presence provision as unilateral measures, drawing on BEPS Action 1. With the Pillar One solution of the OECD around the corner, all eyes have been on India to see how and when it will roll back the unilateral measures entirely to pave the way for Pillar One.
The rationale given for withdrawing the 2% levy was that it was “ambiguous” and led to a “compliance burden”.
There was also a trade dimension. The decision came at a time when India and the US were involved in broader trade negotiations, and analysts speculated that the move was influenced by reciprocal tariff proposals targeting countries imposing digital taxes on US technology firms. The Finance Minister denied the link, noting that the 2% levy was withdrawn after stakeholder discussions in July 2024.
8.1 What it means for planning
Two practical implications.
SEP remains, for now. India removed the levy but retained SEP, which is a domestic nexus rule. Whether and when SEP is itself modified depends on the multilateral position.
The framework may change again. A digital business planning a multi-year India position should treat the current arrangement as the current arrangement rather than a settled endpoint, and revisit it.
9. Three situations, worked through
Scenario A — The SaaS business that got better off
A UK software company sells subscriptions to Indian businesses from London. No Indian office, employees or agent. Indian revenue around ₹15 crore.
Under the levy. 2% on Indian receipts, self-assessed, with no treaty relief and no foreign tax credit — a straight cost.
Now. SEP is comfortably crossed on the revenue limb. But the India-UK treaty applies, and on the facts there is no permanent establishment. Where the treaty position prevails, business profits are not taxable in India.
The remaining question. Whether the subscription receipts are business profits or fall within the royalty article — which is fact and treaty specific and needs answering rather than assuming.
Net. Probably better off, with a documentation requirement it did not previously have: TRC, Form 10F, and a documented position.
Scenario B — The platform that got worse off
A gaming company incorporated in a jurisdiction with no Indian tax treaty. Indian revenue around ₹9 crore and roughly 1.4 million Indian accounts. No presence in India of any kind.
Under the levy. 2% on Indian receipts. Simple, and capped by the rate.
Now. Both SEP limbs are crossed, and there is no treaty to displace the domestic rule. Business connection is established, and income attributable to Indian operations is taxable under the Income-tax Act — with a return to file and a disclosure the form asks for directly.
Net. Materially worse, and the change happened without the business doing anything.
Scenario C — The Indian buyer with a gap
An Indian subsidiary of a European group spends significantly on advertising with foreign platforms. Until March 2025 it deducted and remitted the 6% levy.
What it did. From April 2025 it stopped deducting the levy, correctly, and made the payments gross.
What it missed. The withholding analysis. With Section 10(50) gone, the payment needs characterising, the treaty position establishing, and withholding applying at the correct rate — with a TRC and Form 10F from the platform.
The exposure. Short deduction sits with the Indian payer, along with interest and disallowance consequences.
The lesson. The obligation did not end. It changed shape, and the change required work that stopping does not accomplish.
10. Twelve mistakes
- Treating the withdrawal as pure relief. The Section 10(50) exemption went with it.
- Not reassessing SEP once the exemption sunset.
- Assuming the treaty protects you without checking the PE article or the royalty article.
- Ignoring the user limb. A large free user base can trigger SEP regardless of revenue.
- Scaling India revenue from a non-treaty jurisdiction without modelling the new position.
- Using the wrong withdrawal date. The 2% ended 1 August 2024, not 2025.
- Assuming historical exposure died with the levy. Assessments up to 31 March 2025 remain governed by the pre-amendment framework.
- Not filing outstanding levy statements for earlier periods, where penalties continue to accrue.
- Abandoning a refund claim for earlier periods on the assumption that withdrawal extinguished it.
- Stopping the levy deduction without starting the withholding analysis, as the Indian payer.
- No TRC or Form 10F, because none was needed under the levy.
- Not documenting the SEP position before filing, when the return form asks for it directly.
11. Checklist
Historical review
- All Indian receipts identified for periods when each levy was in force
- EL 1.0 position confirmed: did Indian payers deduct and remit; were statements filed
- EL 2.0 position confirmed: was the levy self-assessed and paid; were statements filed
- Contracts straddling 1 August 2024 analysed on the date of receipt or receivability
- Pending assessments and appeals identified, with the pre-amendment framework applied
- Any refund claims for earlier periods preserved
- Outstanding statements filed, given continuing penalties
Current position
- Indian revenue tested against the ₹2 crore SEP threshold
- Indian user numbers tested against the 3 lakh threshold, with the counting methodology documented
- Business connection assessed — any agent, employee or contract-concluding activity in India
- Treaty identified and the PE article checked for digital nexus modification
- Royalty and fees for technical services articles checked against the nature of the receipts
- Limitation on benefits article assessed
- TRC obtained and Form 10F filed where treaty relief is claimed
- SEP position documented before the return is filed
For the Indian payer
- Payments to foreign digital platforms identified
- Each characterised — business profits, royalty, or fees for technical services
- Treaty rate established and applied
- TRC and Form 10F collected from the payee
- Remittance forms filed and acknowledgements retained
- Any gap since April 2025 quantified and addressed
Sold into India under the levy and assumed it got simpler?
For some businesses it did. For others the 2% became income tax on attributable profits, and nothing about the business changed. Tell us where your entity is tax-resident, your Indian revenue and your Indian user numbers and we will tell you whether SEP is crossed, whether your treaty helps, and what historical exposure is still open.
12. Frequently asked questions
Q1. Has the equalisation levy been abolished in India?
Yes, both versions. The 2% levy on e-commerce supply and services was abolished by the Finance (No. 2) Act, 2024 for consideration received or receivable on or after 1 August 2024. The 6% levy on online advertising was withdrawn by the Finance Act 2025 with effect from 1 April 2025. Equalisation levy provisions do not apply from Assessment Year 2026-27 onward.
Q2. When exactly did the 2% levy end?
1 August 2024, not 2025. Some reporting states 2025 and it is wrong. The date matters because it determines which receipts fell inside the levy, and that question remains live for historical assessments and for contracts straddling the date.
Q3. Does the withdrawal mean foreign digital businesses pay less Indian tax?
Not necessarily, and for some the position is worse. The levy came with an income tax exemption under Section 10(50), and that exemption has sunset alongside it. Income that was previously subject to a 2% or 6% gross levy and exempt from income tax now falls back into the ordinary framework, where significant economic presence or business connection may apply.
Q4. What is the Section 10(50) sunset?
Under the old regime, income subject to the equalisation levy was exempt from Indian income tax under Section 10(50) — the levy and the exemption were a package. With the levy gone, the exemption sunsets effective Assessment Year 2026-27, and the income falls back into the income tax net subject to the ordinary nexus rules.
Q5. What applies now instead of the levy?
Business connection and significant economic presence, both inside the Income-tax Act. Under the Income-tax Act, 2025, SEP sits at Section 9(8)(d), with thresholds in Rule 13 of the Income Tax Rules, 2026: ₹2 crore of transaction value with persons in India, or interaction with more than 3 lakh users in India. Either limb alone is sufficient.
Q6. Why could the new position be worse than the levy?
Because a 2% gross levy is replaced by income tax on attributable profits, with a return to file, potential transfer pricing and a documented position to maintain. For a business in a non-treaty jurisdiction, with no treaty to displace the domestic SEP rule, that is a materially heavier outcome than the flat levy it replaced.
Q7. Why could the new position be better?
Because the levy sat outside the Income-tax Act and therefore outside India’s tax treaties, so no treaty relief and no foreign tax credit were available — the levy was a straight cost. SEP is inside the Act, so where a treaty applies and its permanent establishment article has not been correspondingly amended, the treaty position can prevail and there may be no Indian tax at all.
Q8. Does a tax treaty protect us from SEP?
Often, but it must be checked. Where a treaty applies, business profits are taxable in India only where the enterprise has a permanent establishment, and a treaty PE generally requires a fixed place or a dependent agent that a purely digital business does not have. Whether the treaty prevails depends on that specific treaty and whether its PE article has been modified.
Q9. Is the PE article the only thing to check?
No, and this is a common gap. Even with a clean PE analysis, receipts can be taxable in India if characterised as royalty or fees for technical services, because those articles allocate taxing rights to the source state at a treaty rate without requiring a PE. This is live for software, SaaS and database access payments and is fact and treaty specific.
Q10. Our Indian revenue is small. Are we outside SEP?
Not necessarily. SEP has two limbs and either alone is sufficient. The user limb applies where there is systematic and continuous solicitation of business or interaction with more than 3 lakh users in India, independently of revenue. A freemium platform with a large Indian user base and modest revenue was lightly affected by the levy and can be squarely within SEP.
Q11. Do historical equalisation levy obligations survive the withdrawal?
Yes. Assessments for periods up to 31 March 2025 continue to be governed by the pre-amendment Chapter VIII of the Finance Act 2016, and the Commissioner (Appeals) and ITAT retain jurisdiction over disputes from those periods. The withdrawal does not invalidate or extinguish pending demands or refund claims.
Q12. What happens to unpaid levies and unfiled statements?
They remain enforceable. Unpaid levies, unfiled statements and pending assessments survive abolition, with penalties that can continue to accrue. A business with outstanding filings for earlier periods should deal with them rather than assuming the withdrawal closed the position.
Q13. Can we still claim a refund for earlier periods?
Yes. The withdrawal is prospective and does not extinguish refund claims. A business that overpaid, or paid on transactions arguably outside the charge, retains its position for the earlier periods under the pre-amendment framework.
Q14. How do we determine whether a receipt fell inside the 2% levy?
The levy applied to consideration received or receivable on or after the relevant date, so the date of the transaction, the contractual right to receive payment, invoice timing and payment terms can all matter. For annual contracts or long payment terms straddling 1 August 2024, this is a genuine analysis rather than a formality, and it is better resolved now than in an assessment.
Q15. Who paid the levy — the Indian payer or the foreign company?
It depended on which levy. EL 1.0 at 6% was deducted by the Indian payer and remitted, in the manner of a withholding tax. EL 2.0 at 2% was self-assessed and paid by the non-resident e-commerce operator. That distinction determines where historical exposure sits.
Q16. We are an Indian company that used to deduct the 6% levy. What do we do now?
Do not simply stop. With Section 10(50) gone, the payment needs characterising, the treaty position establishing, and withholding applying at the correct rate, supported by a TRC and Form 10F from the platform and the prescribed remittance forms. Stopping the levy deduction without starting the withholding analysis leaves a short-deduction exposure with the Indian payer.
Q17. Why was the levy withdrawn?
The stated rationale for the 2% withdrawal was that the levy was ambiguous and created a compliance burden, and both withdrawals form part of India’s move toward the OECD Pillar One framework by rolling back unilateral measures. There was also a trade dimension, with reciprocal tariff proposals targeting digital services taxes, though the Finance Minister denied the link and noted the 2% withdrawal followed stakeholder discussions in July 2024.
Q18. Was the equalisation levy creditable in our home country?
Generally not, and this was the central criticism. The levy was introduced outside the Income-tax Act and was therefore not covered by India’s tax treaties, so non-residents could not claim a credit at home and faced genuine double taxation. Indian tax paid under the income tax framework is generally creditable, which is one reason the new position can be better for treaty jurisdictions.
Q19. Does SEP still exist, or was it withdrawn too?
It still exists. India removed the equalisation levy but retained significant economic presence, which is a domestic nexus rule inside the Income-tax Act. Whether and when SEP is itself modified depends on the multilateral position under Pillar One, so a digital business planning a multi-year India position should revisit it rather than treating the current framework as settled.
Q20. Do we have to disclose SEP status on our Indian return?
Yes. Indian return forms applicable to companies, including foreign companies, ask for significant economic presence status directly. That means the position must be reached and documented before filing rather than defended after an assessment begins.
Q21. Does buying goods in India for export create SEP?
No. The Finance Act, 2025 clarified that transactions or activities of a non-resident in India confined to the purchase of goods for the purpose of export do not constitute significant economic presence. Sourcing operations that go beyond purchasing — quality control performed as a service, or sales activity — need separate assessment.
Q22. What should a foreign digital business do first?
Test both SEP limbs against actual Indian revenue and user numbers; identify the applicable treaty and check its PE, royalty and fees for technical services articles; obtain a TRC and file Form 10F if relief will be claimed; and separately review historical levy periods for unpaid amounts, unfiled statements or preserved refund claims. Document the conclusion before the next return.
Related reading
- Permanent establishment risk in India — SEP, business connection and the treaty interaction in full
- Best business structures in India for foreign companies — whether to sell in without an entity at all
- TDS on payments to your foreign parent — the withholding mechanics the Indian payer now needs
- Transfer pricing for Indian subsidiaries — where an Indian entity is involved in the flow
Talk to us before your next India filing
Delhi Legal Company works exclusively with foreign companies establishing and operating in India. SEP and permanent establishment analysis, treaty positions and documentation, withholding on payments to foreign platforms, and historical equalisation levy exposure — run as one workstream, because the withdrawal moved the question rather than closing it.
How we usually start. Tell us where your entity is tax-resident, your Indian revenue, your Indian user numbers, and how you sell into India. We come back with whether SEP is crossed, whether your treaty helps and on which article, what documentation you need, and what remains open from the levy years.