Branch profits tax imposes an additional levy on foreign company branch income, with credit for pre-paid taxes allowed.

Branch profits tax is an additional tax on every foreign company's branch profits for a financial year, charged at the rate specified in Paragraph D of the Second Schedule. "Branch profits" are income attributable to a permanent establishment or immovable property in India included in total income, reduced by the income-tax payable on that attributable income. Liability is discharged by payment of pre-paid taxes as if the branch profits tax were income-tax, and the charged tax is collected after allowing credit for pre-paid taxes under the Code.

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