Get your FY 2026-27 cross-border tax & FEMA compliance checklist ready. DSRV India covers key deadlines, TDS rules, transfer pricing & RBI reporting for Indian businesses.
Alright, let's talk about something that most businesses know they should do at the start of every financial year but almost never do properly getting their cross-border tax and FEMA compliance house in order. Look, we get it. April hits and everyone's busy closing books for the previous year, filing last-minute returns, reconciling GST, and dealing with a hundred other things on their plate. But here's what happens when you push cross-border compliance to the back burner you end up scrambling in December or January when a notice lands on your desk, or worse, when your statutory auditor flags something during the year-end audit that should have been handled back in April.
We've seen this pattern play out hundreds of times over the past 38 years at DSRV and Co LLP, the trusted chartered accountant firm in India. Businesses whether they're mid-sized manufacturers importing raw materials from China, IT companies paying royalties to parent entities in the US, or startups receiving foreign investment they all share one common blind spot. They treat cross-border compliance as something reactive rather than proactive.
So this year, we decided to put together a comprehensive, no-nonsense checklist that covers everything your business needs to address right from the beginning of FY 2026–27. No confusing jargon. No vague advice. Just a clear, actionable roadmap that you can actually sit down with your finance team and work through.
Must Read: KEY FEMA RULES THAT EVERY NRI MUST UNDERSTAND
Before we dive into the checklist itself, let's quickly understand why this particular financial year demands extra attention.
Over the past 18 months, we've seen some significant shifts in India's cross-border tax and FEMA framework. The RBI has tightened ODI and FDI reporting norms. The CBDT has been issuing clarifications on withholding tax obligations for digital payments. Transfer pricing scrutiny has intensified especially for management fee arrangements and intra-group service transactions. And the GST Council has brought more clarity (and complexity) around the taxability of imported services under reverse charge.
Add to that India's expanding DTAA network, the Pillar Two global minimum tax rules starting to take shape, and increased information exchange between tax authorities worldwide through CRS and FATCA and you've got a compliance environment that is fundamentally different from what it was even two years ago.
The businesses that stay ahead? They're the ones who map out their compliance obligations at the start of the year and build systems around them. The ones who scramble? They end up paying more in interest, penalties, and professional fees than they would have spent on proactive planning.
So let's get into it.
This is where you start. Sit down with your finance team and list out every single payment your company makes to non-residents. This includes
For each of these, you need to determine three things: What is the nature of the payment under the Income Tax Act? What does the applicable DTAA say about it? And what TDS rate applies domestic rate or treaty rate?
Many businesses make the mistake of applying a blanket 10% TDS rate on all foreign payments without actually analyzing the nature of the payment or checking the DTAA provisions. That's a recipe for trouble. Different payments attract different rates. And some payments like pure reimbursements without any income element may not even be taxable in India if structured and documented properly.
If your company claims DTAA benefits on any foreign payment, you need a valid Tax Residency Certificate from the payee. No TRC, no treaty benefit it's that straightforward. And this isn't something you should be chasing in March when the auditor asks for it. Get these certificates at the beginning of the year itself. Make sure they're current, valid for the relevant period, and contain all mandatory details prescribed under Rule 21AB.
Also keep Form 10F ready self-declaration by the non-resident because many DTAAs require this along with the TRC.
Every foreign remittance (with limited exceptions) requires filing of Form 15CA, and in many cases, a Chartered Accountant's certificate in Form 15CB. This is not optional. Banks will not process the remittance without it. And if you file incorrect details say you declare a lower TDS rate without proper documentation you're inviting scrutiny.
Our advice? Don't treat 15CA/15CB as a last-minute bank formality. Treat it as a compliance document that needs to be prepared carefully, with proper analysis of the payment nature and applicable tax rate.
If your company earns income from overseas whether it's from a foreign subsidiary, branch profits, consulting fees, or capital gains on foreign investments advance tax obligations apply. You need to estimate this income at the start of the year and plan your quarterly advance tax installments accordingly.
The due dates remain the same 15th June, 15th September, 15th December, and 15th March. Miss these, and you'll face interest under Section 234B and 234C. We've seen businesses pay lakhs in avoidable interest simply because nobody factored foreign income into the advance tax calculation.
Also Read: MUST HAVE DOCUMENTS WHILE FILING FOR INCOME TAX RETURN
If your company has international transactions with associated enterprises exceeding ₹1 crore in aggregate value, transfer pricing documentation is mandatory. And this isn't something you prepare after the year ends. The groundwork starts now.
Review your intercompany agreements. Are the terms still reflecting arm's length conditions? Have pricing benchmarks changed? Is the functional and risk profile of your Indian entity still the same as what was documented last year?
We always tell our clients think of TP documentation as a living document, not a one-time exercise. Update it as business realities change.
This is closely linked to the documentation point, but it deserves its own mention because of how often it goes wrong. Many companies operate on intercompany agreements that were drafted five or seven years ago and have never been updated. The business has changed. The services have changed. The pricing has changed. But the agreement still says the same thing it said in 2019.
Tax authorities love catching these inconsistencies. If your agreement says you're providing "basic accounting support" but your actual invoices show "strategic advisory and management oversight" that mismatch will be flagged during assessment. Update your agreements now. Make sure they accurately reflect the current nature of transactions, compensation mechanisms, and commercial rationale.
If your group's consolidated revenue exceeds the prescribed threshold (₹5,500 crores for CbCR), make sure the Master File and Country-by-Country Report obligations are mapped out. The Indian constituent entity needs to file these with the Indian tax authorities, and the timelines are strict.
Even if your group files the CbCR in the parent entity's jurisdiction, the Indian entity still needs to intimate the prescribed details to the CBDT. Don't assume the parent company's filing covers your Indian obligations it doesn't.
Must Read: Importance Of Transfer Pricing & TP Report Filing Due Date
Any service received from a person located outside India, where the place of supply is in India, attracts GST under the reverse charge mechanism. This means the Indian recipient of the service is liable to pay GST not the foreign service provider.
Common examples include foreign consulting fees, cloud hosting charges, software development services received from overseas vendors, and management fees paid to foreign parent companies.
Many businesses either miss this reverse charge obligation entirely or claim it's covered under some exemption that doesn't actually apply. The GST department has been increasingly active in auditing these transactions. So review all your import-of-service arrangements and make sure reverse charge GST is being properly discharged and reported.
If your business exports services or goods, make sure your Letter of Undertaking (LUT) for FY 2026–27 is filed before you make the first zero-rated supply. The LUT is filed annually on the GST portal, and without it, you'll have to pay IGST upfront and then claim refund which ties up working capital unnecessarily.
Also verify that your export invoices carry all mandatory particulars, that foreign inward remittance certificates (FIRCs) are being collected for every export realization, and that your refund claims (if any) are filed within the prescribed two-year window.
Here's something that catches a lot of businesses off guard during assessments. The tax department now cross-references your Form 15CA/15CB data with your GST returns. If you've shown a foreign payment in 15CA but there's no corresponding reverse charge GST entry in your GSTR-3B that's a red flag.
Similarly, if you've claimed input tax credit on reverse charge GST paid on imported services, make sure the underlying payment is genuinely for a taxable service and not something that's exempt or outside the GST net.
If your company holds any overseas investment whether it's a subsidiary, joint venture, or even an immovable property the Annual Performance Report for FY 2025–26 needs to be filed with the RBI through your authorized dealer bank. The deadline typically falls within December of the following year, but don't wait until then. Start compiling the financial data of your overseas entity now so you're not chasing documents at the last minute.
The Foreign Liabilities and Assets (FLA) return is another annual compliance that Indian companies with foreign investment (inward FDI) need to file with the RBI. The deadline for FY 2025–26 data is typically 15th July 2026. If your company has received any FDI equity, preference shares, convertible debentures this return is mandatory.
If your company has any External Commercial Borrowings, check that all ECB-2 returns are being filed monthly with the RBI through your AD bank. Also verify that the all-in-cost ceiling prescribed by the RBI is being adhered to, end-use conditions are met, and any prepayment or refinancing is done within the regulatory framework.
With the new ODI rules under the Foreign Exchange Management (Overseas Investment) Rules, 2022, the reporting requirements have become more granular. If your company has made any overseas investment or plans to make one in FY 2026–27 make sure you understand the new forms, timelines, and conditions. Non-compliance with ODI reporting is being taken seriously by the RBI, and delays attract compounding penalties.
The beginning of a new financial year is the perfect time to step back and look at the bigger picture. Is your current cross-border structure still tax-efficient? Are there treaty benefits you're not utilizing? Could a restructuring maybe moving certain functions, risks, or assets result in a better overall tax position?
These are conversations you should be having with your tax advisors proactively, not reactively when an assessment order lands on your table.
The OECD Pillar Two rules the global minimum tax of 15% are now being implemented across multiple jurisdictions. While India hasn't formally enacted domestic legislation yet, the impact is already being felt by Indian multinationals with operations in countries that have adopted these rules. If your group's global revenue exceeds €750 million, you need to start modeling the Pillar Two impact on your effective tax rate and identify any top-up tax exposure.
This sounds basic, but you'd be surprised how many businesses even large ones don't have a proper compliance calendar for cross-border obligations. TDS deposit dates, advance tax deadlines, form filing timelines, FEMA reporting dates, transfer pricing documentation deadlines put all of these in one calendar, assign responsibilities, and review it monthly.
We've created customized compliance calendars for hundreds of our clients at DSRV, and it's one of the simplest tools that delivers the most value.
Look, we understand that cross-border compliance feels overwhelming. The rules are spread across multiple laws Income Tax Act, FEMA, GST, transfer pricing regulations, RBI master directions and they keep changing. But the cost of non-compliance is always higher than the cost of getting it right the first time.
The businesses that thrive in a complex regulatory environment aren't the ones with the biggest legal teams. They're the ones with the right advisors who help them stay three steps ahead.
At DSRV and Co LLP, we've been doing exactly that for over 38 years. Whether you're a mid-sized manufacturer dealing with cross-border supply chains, an IT company with overseas subsidiaries, a startup receiving foreign funding, or an NRI managing investments in India we've got you covered.
Need help building your FY 2026–27 cross-border compliance roadmap?
Get in touch with our team today.
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