Accounting and bookkeeping in India — 2026 guide for foreign-invested companies

India accounting and bookkeeping services: monthly, quarterly and annual compliance

MSA Asia handles India accounting and bookkeeping end to end for foreign-invested companies. We maintain your books under Indian Accounting Standards, file monthly GST and TDS returns, run the quarterly advance-tax and TDS-return cycle, prepare statutory financial statements under the Companies Act 2013, coordinate the mandatory statutory audit, and file the annual income tax return and Registrar of Companies returns that every Indian company must submit.

Beyond routine bookkeeping, we handle the parts that create risk if missed: the audit-trail requirement for accounting software, transfer pricing documentation for transactions with your overseas parent, the RBI's annual Foreign Liabilities and Assets return, and withholding tax on payments abroad. We operate from our Mumbai office and support subsidiaries registered in every Indian state.

The short version. India's financial year runs 1 April to 31 March, every company must have its accounts audited by an independent Chartered Accountant regardless of size, and the compliance calendar is dense: GST and TDS filings every month, advance tax and TDS returns every quarter, and a cluster of audit, tax and RoC deadlines between September and November. The parts that catch foreign-owned companies out in 2026 are three: the audit-trail (edit log) rule for accounting software, the new Income-tax Act 2025 that took effect on 1 April 2026, and transfer pricing on intercompany charges. We handle all three.

The four service tiers: choose the right level of support

India accounting needs scale with your company's size and reporting obligations, and picking the wrong tier either wastes budget or leaves you exposed at audit time. Here is how they differ.

Basic bookkeeping: the default

For most small and mid-sized foreign subsidiaries, basic bookkeeping covers transaction recording in audit-trail-compliant software, monthly GST returns (GSTR-1 and GSTR-3B), monthly TDS deposits and bank reconciliations. It is the minimum every company needs to stay compliant and typically runs from around USD 300 per month for low-volume entities.

Full accounting and tax compliance

Full-service accounting adds quarterly TDS returns and advance tax, preparation of statutory financial statements, coordination of the statutory audit, the annual income tax return and the AOC-4 and MGT-7 filings with the Registrar of Companies. This is the standard tier for operating companies with revenue, inventory or payroll beyond a handful of staff, and typically runs from USD 800 to 2,500 per month depending on transaction volume.

Payroll and statutory contributions

India has no mandatory in-house accountant, but payroll carries its own compliance stack: monthly TDS on salaries, Provident Fund (from 20 employees), Employees' State Insurance (from 10 employees in most states), state professional tax, gratuity provisioning and annual Form 16 issuance. This tier is usually bundled with full accounting through our India payroll outsourcing service.

Group reporting, transfer pricing and CFO advisory

Companies that report to an overseas parent under IFRS or US GAAP need a reconciled group pack alongside their Indian statutory books, a transfer pricing study and Form 3CEB for intercompany transactions, and often management reporting and cash-flow forecasting. This tier adds CFO-level advisory and suits larger subsidiaries, global capability centres and regional headquarters.

Quick comparison

Service tier	Description	Advantages	Disadvantages
Basic bookkeeping	Transaction recording, monthly GST and TDS, bank reconciliation	Lowest cost, minimum compliance covered	No audit preparation, annual returns or tax filing included
Full accounting and tax compliance	Adds quarterly filings, financial statements, audit coordination, ITR and RoC returns	Audit-ready books, single point of accountability	Higher monthly retainer
Payroll and statutory contributions	Salary TDS, PF, ESI, professional tax, gratuity, Form 16	Removes the most penalty-prone monthly deadlines	Usually bundled, not offered standalone
Group reporting, transfer pricing and CFO advisory	IFRS or US GAAP pack, TP study and Form 3CEB, management reporting	Group-ready consolidation, defensible intercompany pricing	Highest cost tier

Step by step India accounting setup and compliance process

Once your entity is registered, the accounting function needs to be running before your first invoice goes out. Here is the realistic sequence for a newly incorporated foreign-owned Private Limited Company.

1. Appoint the first statutory auditor within 30 days of incorporation. The board must appoint an independent Chartered Accountant firm; if it fails to, the shareholders must do so within 90 days. The auditor's consent and eligibility certificate are filed with the RoC in Form ADT-1.
2. Set up audit-trail-compliant accounting software and the chart of accounts. Since 1 April 2023 every company's accounting software must record an edit log of each transaction that cannot be disabled. Map the chart of accounts to Schedule III of the Companies Act so year-end financial statements fall out of the ledger without re-mapping.
3. Complete tax registrations. PAN and TAN arrive with incorporation; register for GST on the GST portal (mandatory from day one for most B2B businesses and for any inter-state supply), and for professional tax and Shops and Establishments in your state.
4. Report share capital to the RBI and file INC-20A. Allot shares within 60 days of receiving the parent's remittance, file Form FC-GPR on the FIRMS portal within 30 days of allotment, then file the declaration of commencement of business (INC-20A) within 180 days of incorporation, before trading begins.
5. Set up the monthly cycle. Deposit TDS by the 7th of the following month, file GSTR-1 by the 11th and GSTR-3B by the 20th, and deposit PF and ESI contributions by the 15th. Issue e-invoices through the Invoice Registration Portal once turnover crosses INR 5 crore.
6. Set up the quarterly cycle. Pay advance tax in four instalments (15 June, 15 September, 15 December, 15 March) totalling at least 90% of the year's liability, and file quarterly TDS returns (Forms 24Q and 26Q) by 31 July, 31 October, 31 January and 31 May.
7. Prepare year-end financial statements under Schedule III. Close the books at 31 March, prepare the balance sheet, statement of profit and loss, cash flow statement and notes under Indian Accounting Standards, and hand them to the statutory auditor by June or July.
8. Complete the statutory audit and hold the AGM. The audited accounts must be approved by the board and adopted at the annual general meeting within six months of year end (by 30 September; nine months for the first financial year).
9. File the tax audit report, income tax return and transfer pricing report. Companies above the tax-audit turnover threshold file Form 3CA/3CD by 30 September; the income tax return is due 31 October, or 30 November where a transfer pricing report (Form 3CEB) is required.
10. File annual RoC and RBI returns. AOC-4 (financial statements) within 30 days of the AGM, MGT-7 (annual return) within 60 days, the RBI's Foreign Liabilities and Assets return by 15 July, DPT-3 by 30 June and director KYC (DIR-3 KYC) by 30 September.

A newly incorporated company typically has its accounting function fully operational, with auditor appointed, GST live, payroll running and the monthly cycle in place, within 4 to 6 weeks of receiving its Certificate of Incorporation.

The India compliance calendar: what is due and when

India's compliance load is heavier than most foreign founders expect because it stacks three regulators: the Income Tax Department, the GST authorities and the Ministry of Corporate Affairs, with the RBI adding FEMA reporting for foreign-owned companies. The table below shows the recurring deadlines for a standard Private Limited Company with a 31 March year end.

Frequency	Filing or payment	Deadline	Authority
Monthly	TDS deposit (salaries, vendors, rent, non-resident payments)	7th of following month (30 April for March)	Income Tax Department
Monthly	GSTR-1 (outward supplies) and GSTR-3B (summary return and payment)	11th and 20th of following month	GST Network
Monthly	Provident Fund and ESI contributions	15th of following month	EPFO / ESIC
Quarterly	Advance income tax instalments	15 June, 15 September, 15 December, 15 March	Income Tax Department
Quarterly	TDS returns (Forms 24Q, 26Q, 27Q)	31 July, 31 October, 31 January, 31 May	Income Tax Department
Half-yearly	MSME-1 (overdue payments to small suppliers)	30 April and 31 October	Registrar of Companies
Annual	DPT-3 (return of deposits and loans)	30 June	Registrar of Companies
Annual	Foreign Liabilities and Assets (FLA) return	15 July	Reserve Bank of India
Annual	Statutory audit completed and AGM held	30 September	Companies Act
Annual	Tax audit report (Form 3CA/3CD) and DIR-3 KYC	30 September	Income Tax Department / RoC
Annual	Income tax return (Form ITR-6)	31 October (30 November with transfer pricing)	Income Tax Department
Annual	AOC-4 financial statements and MGT-7 annual return	30 and 60 days after AGM	Registrar of Companies
Annual	Transfer pricing report (Form 3CEB)	31 October	Income Tax Department
Annual	GST annual return (GSTR-9) and reconciliation (GSTR-9C above INR 5 crore)	31 December	GST Network

Required records and documents for India accounting

Books and records every company must maintain (Companies Act section 128):

• Cash book, bank book, sales and purchase registers and the general ledger, kept in audit-trail-compliant software with daily backups on servers accessible from India
• Sales invoices (e-invoices with IRN where turnover exceeds INR 5 crore), purchase invoices and expense vouchers
• Fixed asset register with depreciation under Schedule II useful lives
• Statutory registers: members, directors, charges, related-party contracts and board and shareholder minutes
• Payroll records, Form 16 and Form 24Q workings for each employee
• Retention: books and vouchers for at least 8 financial years

Documents we need from a newly incorporated company:

• Certificate of Incorporation, PAN, TAN and GST registration certificate
• Memorandum and Articles, board resolutions and the auditor appointment (ADT-1)
• Bank account details, FIRC and KYC report for the share capital remittance, and the FC-GPR acknowledgement
• Intercompany agreements with the parent (services, cost-sharing, licence or distribution) for transfer pricing
• Office lease and the Shops and Establishments registration

For a mid-year handover from another provider:

• Trial balance and ledger exports from the outgoing software, with the audit-trail log
• Prior-year audited financial statements, tax audit report, ITR and Form 3CEB
• GST and TDS portal credentials, return acknowledgements and reconciliation workings
• Open notices or assessments from any authority

Indian GAAP, Ind AS and the audit trail rule

Indian companies prepare their statutory financial statements under one of two frameworks. Most foreign-owned private subsidiaries follow the Accounting Standards (AS) notified under the Companies (Accounting Standards) Rules 2021, often called Indian GAAP. Ind AS, India's converged version of IFRS, is mandatory for listed companies, for unlisted companies with net worth of INR 250 crore or more, and for their Indian holding, subsidiary, joint-venture and associate companies; any company may adopt it voluntarily, and many subsidiaries of IFRS-reporting groups do so to simplify consolidation.^[1] Whichever framework applies, the statements must follow the Schedule III format and are audited every year.

Two rules distinguish India from most other APAC markets. First, since 1 April 2023 every company must use accounting software that records an audit trail, an edit log of every change to every transaction, that cannot be switched off; the statutory auditor must report on whether this was in place for the full year.^[2] Spreadsheets and most overseas parent systems do not qualify, so the choice of software is a compliance decision, not just an IT one. Second, books must be kept at the registered office or another notified place in India, and if they are kept on a server abroad a daily backup must be maintained on a server physically located in India.

Tax follows its own rules. From 1 April 2026 the Income-tax Act 2025 replaced the Income-tax Act 1961, renumbering sections and replacing "previous year" and "assessment year" with a single "tax year", though rates and most deadlines carried over.^[3] Domestic companies pay 25% (turnover up to INR 400 crore) or can opt for the concessional 22% regime without incentives, which with surcharge and cess works out at about 25.17%. Our India tax team handles the transition and the regime choice.

Costs and timeline at a glance

The cost stack for a typical foreign-owned company's accounting function:

• Basic bookkeeping: from around USD 300 per month for low-volume entities, including monthly GST and TDS filings.
• Full accounting and tax compliance: typically USD 800 to 2,500 per month depending on transaction volume, payroll size and group reporting needs.
• Payroll: typically USD 15 to 30 per employee per month, with a minimum fee for small headcounts, covering salary TDS, PF, ESI and professional tax.
• Statutory audit: typically USD 1,500 to 5,000 depending on company size and complexity; tax audit (Form 3CD) adds USD 800 to 2,000 where applicable.
• Transfer pricing study and Form 3CEB: typically USD 3,000 to 8,000 a year for a single-entity subsidiary with a few intercompany transaction types.
• Audit-trail-compliant software: cloud subscriptions from roughly USD 15 to 60 per month; e-invoicing and GST reconciliation tools extra above INR 5 crore turnover.
• Annual RoC and RBI returns: often included in the annual retainer, otherwise billed as a year-end project fee alongside company secretarial services.

Budget for these costs from incorporation, not after your first GST deadline; the monthly 7th, 11th and 20th filing cadence starts the month your registrations go live, whether or not your accounting function is ready.

Common India accounting and compliance pitfalls (and how MSA Asia helps)

A handful of issues account for most of the compliance problems we see on India engagements.

Running the books in the parent's ERP without an audit trail. Group systems configured abroad often lack an India-compliant edit log or an India-based backup. The auditor qualifies the report and the RoC can levy penalties on the company and every officer in default.

Treating GST as a quarterly task. Monthly GSTR-1 and GSTR-3B filings carry late fees per day and interest at 18% a year on unpaid tax, and a supplier's late filing blocks your input tax credit. Reconciliation of purchase invoices against GSTR-2B every month is not optional.

Missing TDS on payments to the parent. Management fees, royalties, software licences and technical services paid abroad attract withholding tax at 10% to 20% (or the treaty rate with a tax residency certificate) and require Form 15CA/15CB before the bank will remit. Paying gross and sorting it out later disallows the expense.

No transfer pricing documentation. Any transaction with the overseas parent or group companies must be at arm's length and documented; Form 3CEB is due even where the amounts are small, and penalties run at 2% of transaction value for missing documentation.

Underestimating the September to November crunch. Audit sign-off, AGM, tax audit, ITR, Form 3CEB, AOC-4 and MGT-7 all fall within ten weeks. Companies that start the year-end close in August routinely miss something.

Forgetting FEMA. The FLA return every July, FC-GPR on each share issue and reporting of any loan from the parent are RBI obligations that sit outside the tax calendar and carry compounding penalties when missed.

Switching providers mid-year without a clean handover. Incomplete ledgers, missing audit-trail logs or unreconciled GST credits from an outgoing provider are the most common cause of onboarding delays we see.

How MSA Asia helps. We set up compliant software and the chart of accounts before your first transaction, run the monthly GST and TDS cycle with GSTR-2B reconciliation, model withholding and treaty rates on every intercompany payment, prepare the transfer pricing file during the year rather than after it, and run a single compliance calendar across the tax, GST, RoC and RBI deadlines.

India accounting vs other APAC markets

India's compliance calendar is among the most demanding in the region. Compared with Singapore and Hong Kong, where a small company may need only an annual return and an audit (or none at all), India requires monthly GST and TDS filings, quarterly advance tax and a mandatory audit for every company. Compared with Vietnam and China, the filing cadence is similar but India's regime is almost entirely digital, with PAN, TAN, GST and RoC systems integrated and no requirement for a licensed in-house chief accountant. The distinctly Indian features that catch first-time investors are the audit-trail rule, the dense withholding tax regime on both domestic and cross-border payments, and transfer pricing enforcement that applies from the first intercompany invoice.

For most foreign companies already operating in India, the question is less about whether to outsource accounting, and more about which service tier matches their transaction volume, headcount and group reporting obligations.

Key takeaways

Five things to lock in before your first India filing is due:

1. Software. Use audit-trail-compliant accounting software with an India-based backup from day one.
2. Auditor. Appoint the statutory auditor within 30 days of incorporation; every company is audited, whatever its size.
3. Monthly cadence. TDS by the 7th, GSTR-1 by the 11th, GSTR-3B by the 20th and PF/ESI by the 15th are the deadlines that generate most penalties.
4. Intercompany. Withhold tax and file Form 15CA/CB on every payment to the parent, and document transfer pricing during the year.
5. Year end. Start the 31 March close in April so audit, AGM, ITR, Form 3CEB and RoC returns clear the September to November window.

India accounting: terminology, providers, and what foreign investors actually need

Foreign investors arrive at this topic through many different search terms: India accounting services, bookkeeping in India, outsourced accounting India, India tax compliance, or simply how to do accounting for a foreign subsidiary in India. They are all asking the same operational question: how to stay compliant with the Companies Act, GST, income tax and FEMA without hiring a full in-house finance team.

Whether you call it India accounting, bookkeeping or outsourced finance, the underlying obligations are the same. To keep a foreign-owned company compliant in India, you must:

1. keep books in audit-trail-compliant software under Indian Accounting Standards,
2. file GST and TDS every month and advance tax and TDS returns every quarter,
3. have the accounts audited by an independent Chartered Accountant every year,
4. file the income tax return, tax audit and transfer pricing reports by the autumn deadlines, and
5. file the annual RoC returns and the RBI's FLA return.

Working with an accounting provider in India

Most foreign-invested companies do not run accounting in-house from day one; they retain an outsourced provider who runs the monthly GST and TDS cycle, prepares the year-end statements, coordinates the auditor and files the tax and RoC returns, often alongside payroll and company secretarial work. Companies that hire staff before the entity is ready sometimes bridge the gap through an employer of record. MSA Asia provides full India accounting and bookkeeping services from set-up through to annual filing.

2026 specifics: the new Income-tax Act, audit trail enforcement and GST

What is worth knowing in 2026: the Income-tax Act 2025 applies from 1 April 2026, so returns for the 2026-27 tax year follow new section numbering and the single "tax year" concept while rates carry over; auditors are now reporting on audit-trail compliance for the third full year and the RoC has begun issuing penalty orders for non-compliant software; and e-invoicing remains mandatory for every business with turnover above INR 5 crore, with GSTR-2B reconciliation now the only route to input tax credit.

Get your India accounting handled by MSA Asia

You have seen what India accounting compliance involves in 2026: audit-trail-compliant books under Indian Accounting Standards, monthly GST and TDS filings, quarterly advance tax, a mandatory statutory audit, the autumn cluster of tax, transfer pricing and RoC deadlines, and FEMA reporting to the RBI. MSA Asia handles all of it from our Mumbai office, with a fixed monthly fee and a compliance calendar set up before your first filing falls due.

Frequently asked questions about India accounting

Does every company in India need an audit?

Yes. Under the Companies Act 2013 every company, including a small wholly foreign-owned Private Limited Company, must have its annual financial statements audited by an independent Chartered Accountant. A separate tax audit applies once turnover exceeds INR 1 crore (INR 10 crore where cash transactions are under 5%).

What is India's financial year?

1 April to 31 March for every company. Audited accounts must be adopted at the AGM by 30 September and the income tax return filed by 31 October (30 November where transfer pricing applies).

Do foreign-owned companies follow Ind AS or Indian GAAP?

Most private subsidiaries follow the Accounting Standards (Indian GAAP). Ind AS is mandatory for listed companies and unlisted companies with net worth of INR 250 crore or more, and their Indian group companies; voluntary adoption is allowed and is common where the parent reports under IFRS.

What is the audit trail requirement?

Since 1 April 2023, accounting software used by any Indian company must record an edit log of every transaction change that cannot be disabled, and the statutory auditor reports on compliance. Books kept on overseas servers must also be backed up daily to a server in India.

How often do I file GST?

Monthly for most companies: GSTR-1 by the 11th and GSTR-3B by the 20th of the following month. Businesses with turnover up to INR 5 crore can opt for the quarterly QRMP scheme with monthly tax payments. The annual return (GSTR-9) is due by 31 December.

What changed with the Income-tax Act 2025?

The new Act replaced the 1961 Act from 1 April 2026, consolidating and renumbering provisions and introducing a single "tax year" in place of previous and assessment years. Corporate rates and most compliance deadlines were carried over.

Do I need a Chief Accountant or company secretary?

India has no mandatory in-house accountant. A whole-time company secretary is required only once paid-up capital reaches INR 10 crore. What every company does need is an independent statutory auditor and someone to certify FEMA filings such as FC-GPR.

How much does outsourced accounting cost in India?

Basic bookkeeping starts from around USD 300 per month; full accounting and tax compliance typically runs USD 800 to 2,500 per month depending on volume. The statutory audit is billed separately, typically USD 1,500 to 5,000 a year.

How long must we keep accounting records in India?

At least 8 financial years for books and vouchers under the Companies Act, longer where an assessment or investigation is open. GST records must be kept for 72 months from the annual return due date.