Income Tax Form 162: Annual Statement for Liaison Offices in India

Form 162 is an annual compliance statement mandated under Section 505 of the Income-tax Act, 2025, for non-resident entities operating liaison offices in India. It must be filed once every tax year within eight months from the end of the relevant year and is compulsory for such entities. The form captures detailed information about the liaison office’s activities, financials, employees, Indian transactions, and compliance with RBI and FEMA guidelines. It must be filed electronically with a digital signature and cannot be edited once submitted. Supporting documents include audited financial statements, RBI approvals, and an Annual Activity Certificate certified by a Chartered Accountant. The form plays a crucial role in demonstrating that the liaison office’s activities do not constitute a business connection in India and supports RBI renewal or closure processes. Non-compliance can lead to penalties, revocation of RBI approval, and further tax scrutiny or enforcement action.

Income Tax Department
Ministry of Finance, Government of India

FAQs on Income Tax Form 162 (Earlier Form No. 49C): Annual Statement for Liaison Offices in India under section 505 of Income Tax Act, 2025

Annual Statement under section 505 of the Act

Q1: What is Form 162?

Ans: Form 162 serves as an annual statement mandated under Section 505 of the Income tax Act 2025. for non-resident entities maintaining a liaison office in India. It is to be filed under Rule 234. The form provides detailed information about the activities and operations of the liaison office during a specific financial year.

Q2: Who should file Form 162?

Ans: Non-resident entities that have established a liaison office in India in accordance with the guidelines issued by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act, 1999 (FEMA).

Q3: Is Form 162 mandatory?

Ans: Yes, Form 162 is mandatory.

Q4: What is the time limit for filing Form 162?

Ans: Form 162 must be filed within 8 months from the end of the tax year.

Q5: How many times can Form 162 be filed in a year?

Ans: Form 162 must be filed once in a tax year.

Q6: What documents are required to file Form 162?

Ans: Following documents may be required for filing Form 162:

• Communication addresses, emails, phone nos.
• The certified Annual Activity Certificate (AAC) from a Chartered Accountant verifying that the Liaison Office’s activities during the year were in line with RBI’s approval.
• Details of agents, distributors, and others representing the non-resident in India.
• RBI approval documentation: registration number of LO, date of opening, etc.
• Details of employees in India, salary/outside India or payments for services in India.
• Audited financial statements of the Liaison Office (and possibly of the parent entity or group) with relevant India-specific receipts/income/expenses.
• Details of Indian parties (customers, suppliers) with whom transactions undertaken
• PAN of Indian parties, addresses of offices in India, registration numbers.

Q7: Can I edit Form 162 after submission?

Ans: No. Once Form 162 is submitted and acknowledgment is generated, it cannot be edited. Ensure all details are correct before submission.

Q8: Do I need to attach proof of tax payment?

Ans: No. Form 162 does not require any proof of tax payment.

Q9: While filling Part A, can I leave Aadhaar or mobile number blank? Ans:

• Not relevant, as Aadhar is no longer part of Part A information.
• Contact details will help faster communication and it is recommended to provide it.

Q10: What if I do not have a PAN?

Ans: Form 162 cannot be submitted without a valid PAN.

Q11: Can Form 162 be filed offline?

Ans: No. Form 162 can only be submitted online through the Income Tax e-Filing portal.

Q12: What is the process flow of filing Form 162?

Ans: The process flow for filing Form 162 includes following steps

1. Preparation:

• • Gather all necessary financial documents, including balance sheets, profit & loss accounts, and details of activities undertaken.
  • Ensure compliance with RBI and FEMA guidelines.
  • Digital signature for authorized signatory.

2. Filing:

• • Form 162 must be filed electronically through the e-filing portal of the Income Tax Department.
  • The statement should be digitally signed by the authorized signatory of the

Q13: Why is Form 162 important?

Ans: Filing Form 162 enables the non-resident entities maintaining a liaison office in India, to provide detailed information about the activities and operations of the liaison office during a specific tax year. This is mandatory for non- resident entities registered as liaison office in India, for the business activities not to be considered as business connection in India. Further, it is also supporting evidence for RBI’s annual renewal or closure applications of the Liaison Office and is a record for the parent company’s statutory filings or audits abroad (especially where India reporting is required)

Failure to file Form 162 or adhere to the prescribed timelines can lead to:

• Levy of Penalty under Section 460 of the Income tax Act 2025.
• Revocation of the liaison office’s permission by the RBI.
• Other appropriate action related to assessment of income and other measures under the Income tax Act 2025.

Guidance Note on Income Tax Form 162 (Earlier Form No. 49C): Annual Statement for Liaison Offices in India under section 505 of Income Tax Act, 2025

A. PURPOSE

Form 162 serves as an annual statement mandated under Section 505 of the Income Tax Act, 2025, for non-resident entities maintaining a liaison office in India. It is to be filed under Rule 234 of Income-tax Rules, 2026. The form provides detailed information about the activities and operations of the liaison office during a specific financial year.

B. WHO SHOULD FILE

Non-resident entities that have established a liaison office in India in accordance with the guidelines issued by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act, 1999 (FEMA).

C. FREQUENCY & DUE DATES

• Form 162 must be filed once in a tax year
• The Form must be filed within 8 months from the end of the tax year. As per Notification No. 14/2025, the filing deadline for Form 162 has been changed to align with the submission timeline for the Annual Activity Certificate to RBI.

D. STRUCTURE OF FORM 162

Form 162 requires the following information:

Part A

1) Details of the Head Office such as Name, Address, Country, Email, Phone No. Country of Tax Residency etc.

2) Details of the Principal Office in India such as Name, Address, Email, Phone No. etc.

3) Details of the Chartered Accountant signing the Annual Activity Certificate such as Membership Number, Firm Registration Number etc.

Part B

1) Details of Persons in charge, agents/representatives

2) RBI approval date, registration number etc.

3) Liaison office-wise details: activities undertaken, no. of employees working, details of salaries, parties with whom liasioning is done, other entities for which liasioning activity undertaken etc.

4) Other details

– India Specific Financials such as receipts and expenses of the entity in total and of the liaison office separately

– Purchases, sales from/to Indian parties of the entity in total and of the liaison office separately

– Information on permanent establishment of group entities, liaison offices of group entities.

E. WHAT ARE THE DOCUMENTS REQUIRED TO FILE THE FORM 162?

• Communication addresses, emails, phone nos. of Head Office, Liaison Office .
• The certified Annual Activity Certificate (AAC) from a Chartered Accountant verifying that the Liaison Office’s activities during the year were in line with RBI’s approval.
• Details of agents, distributors, and others representing the non­resident in India.
• RBI approval documentation: registration number of LO, date of opening, etc.
• Details of employees in India, salary/outside India or payments for services in India.
• Audited financial statements of the Liaison Office (and possibly of the parent entity or group) with relevant India-specific receipts/income/expenses.
• Details of Indian parties (customers, suppliers) with whom transactions undertaken
• PAN of Indian parties, addresses of offices in India, registration numbers.

F. FILING COUNT

On an average in the last 5 years, around 470 forms have been filed.

G. WHAT IS THE PROCESS FLOW OF FILING FORM 162?

1. Preparation:

• • Gather all necessary financial documents, including balance sheets, profit & loss accounts, and details of activities undertaken.
  • Ensure compliance with RBI and FEMA guidelines.
  • Digital signature for authorized signatory

2. Filing:

• • Form 162 must be filed electronically through the e-filing portal of the Income Tax Department.
  • The statement should be digitally signed by the authorized signatory of the non-resident entity.

3. Verification:

• • The Income Tax Department may verify the submitted information and may request additional documents or clarifications if necessary.

H. OUTCOME OF PROCESSED FORM 162:

For Liaison Office (LO):

• Proof of annual compliance with the Indian Income-tax Department.
• Supporting evidence for RBI annual renewal or closure applications of the Liaison Office.
• A record for the parent company’s statutory filings or audits abroad, if needed.

For the Department:

• The form is made available to the International Taxation to enable verification and cross-checking with Annual Activity Certificate
• The information may be shared with the Transfer Pricing division when the cross-border transactions are to be verified.

I. CONSEQUENCES OF NON-COMPLIANCE

Failure to file Form 162 or adhere to the prescribed timelines can lead to:

• Levy of Penalty under Section 460 of the Income-tax Act, 2025.
• Revocation of the liaison office’s permission by the RBI.
• Other appropriate action related to proper assessment of income and other measures under the Income-tax Act, 2025

J. BRIEF NOTE ON BROAD OR QUALITATIVE CHANGES PROPOSED:

Key updates include the following:

1. Part A, standard template is amended to capture the details of Head Office, Liaison Office and Chartered Accountant.

2. Fields already existing in Part A are removed from Part B.

3. Related questions are put together and ensure smooth flow of the information sought.

K. CHALLENGES AND SOLUTIONS

Earlier, Form 162 required the Liaison Office to enter similar kind of information at various places which was disorganized and therefore time taking. The revised Form 162 will be a smart one to enhance user experience and provide ease of filing through:

• Grouping information related to the same issue such as employees and salaries, RBI approval and dates etc.
• Standardization of name & address fields etc.

L. COMMON CHANGES MADE ACROSS FORMS

1. To make Forms system-friendly and enable e-filing and uploading, certain anomalies found due to grouping of Name, Designation, Address, PAN and Aadhaar number have been separated into different boxes.

2. Assessment / Financial / Previous year or years have been replaced with Tax year or years, wherever appearing in the Form/Annexure.

3. Sections, Clauses and Schedules changes as per the Income-tax Act, 2025.

4. Common verification statement.