Indian income tax law | Non-resident compliance

Section 285 of the Income Tax Act: Annual Statement by a Non-Resident Liaison Office

A non-resident maintaining a liaison office in India under Reserve Bank of India guidelines must furnish an annual statement of its activities. This article explains the historical section 285 requirement and its successor, section 505 of the Income-tax Act, 2025.

What is a liaison office?

A liaison office is an office established in India by an entity resident outside India under the applicable Reserve Bank of India framework and the Foreign Exchange Management Act, 1999. It ordinarily acts as a communication or representative channel and must operate within the activities permitted by its RBI approval and applicable regulations. Tax reporting obligations can arise even where the office does not undertake revenue-generating activities.

Section 285 under the Income-tax Act, 1961

Section 285 required every non-resident person with a liaison office in India established in accordance with RBI guidelines under FEMA, 1999 to prepare and furnish a statement concerning the liaison office's activities during the financial year to the jurisdictional Assessing Officer, in the prescribed form and within the prescribed period.

The provision was introduced by the Finance Act, 2011 with effect from 1 June 2011. Its original wording specified 60 days after the financial year-end; the Finance (No. 2) Act, 2024 amended the time-limit language with effect from 1 April 2025 so that the period is prescribed under the rules. Therefore, the historical 60-day text should not be treated as the current filing deadline.

Section 505 under the Income-tax Act, 2025

Section 505 carries forward the obligation for a non-resident with an Indian liaison office set up in accordance with RBI guidelines under FEMA, 1999. The non-resident must prepare and deliver a statement about the office's activities during the relevant tax year to the Assessing Officer having jurisdiction, in the form, with the particulars and within the period prescribed by the rules.

For the statutory wording, consult the official Income-tax Act, 2025.

Filing requirement under Rule 234 and Form 162

For example, where the financial year ends on 31 March 2027, eight months from that date falls on 30 November 2027, subject to any applicable official extension or change in the rules.

Information and compliance considerations

The annual statement is intended to disclose the nature and extent of the liaison office's activities in India. The non-resident should maintain reliable records of RBI approvals, permitted functions, office operations, personnel, funding and relevant transactions so that the prescribed statement can be completed accurately.

Filing the liaison-office statement is a separate compliance obligation and does not by itself establish that the non-resident has no taxable income or permanent establishment in India. Those questions depend on the applicable domestic law, facts and relevant tax treaty.

Old and new provisions at a glance

Official legal references

• Income-tax Act, 2025 - official statutory text
• Income-tax Act, 1961 as amended - section 285
• Income-tax Rules, 2026 - Rule 234
• Income Tax Department FAQs - Form 162
• Income Tax Department - Acts, rules and forms

Legal information is provided for general reference. Check the statutory text, applicable year, latest notifications and prescribed electronic filing procedure before submission.