Foreign businesses operating in India face several tax implications that need careful consideration to ensure compliance and optimize tax liabilities. Here are the key India business tax implications:

• Corporate Income Tax (CIT): Foreign companies with operations in India are subject to corporate income tax on profits generated within the country. The standard CIT rate for foreign companies is 40%.
• Dividend Distribution Tax (DDT): Dividends paid by an Indian subsidiary to its foreign parent are subject to DDT at a rate of 15%. This tax is levied on the dividends declared, distributed, or paid by the subsidiary​​.
• Withholding Tax: Various payments such as interest, royalties and technical fees made to foreign entities are subject to withholding tax. The standard rate is 20%, but it can be lower depending on the provisions of applicable Double Taxation Avoidance Agreements (DTAAs)​.
• Transfer Pricing: Transactions between related parties must comply with transfer pricing regulations to ensure that they are conducted at arm’s length prices. This is to prevent profit shifting and tax evasion through underpricing or overpricing intercompany transactions​​.
• Goods and Services Tax (GST): Foreign businesses involved in the sale of goods or services within India must register for GST if their turnover exceeds a specified threshold. GST compliance includes periodic returns and payment of taxes on sales​​.

These India business tax implications highlight the complex tax landscape foreign businesses must navigate. Consulting with experienced advisors familiar with Indian tax laws and DTAAs is essential for optimizing tax strategies and ensuring compliance.