Clause 111 - Tax on branch profits

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.