What does a late ITR-6 cost an Indian subsidiary?
The exposure is charged by reference to the return and the delay rather than to the tax, so a subsidiary that made a loss or had a nil year still faces a real amount for having filed nothing. For a foreign-owned company there is usually a second cost behind the first: the transfer-pricing report that should have travelled with the return does not exist yet either, and building it after the event means describing a year from memory. We quantify both before filing, so the group is not surprised twice.
Must the transfer-pricing report be ready before we file ITR-6 late?
Practically, yes, if the return is to be filed on figures that hold. The return for a foreign-owned company travels with a transfer-pricing report, and filing on intercompany prices the report will not ultimately support means revisiting the return as well. Where several years are open we build the analysis once across the whole period, then file the years in order on a consistent basis. Filing a single year in isolation is quicker and tends to create the inconsistency the next year then has to explain.
Our Indian company was dormant — is a late ITR-6 still charged?
Yes. Dormancy removes the tax, not the filing obligation, and the exposure for lateness attaches to the return that was due. This is the commonest version of the problem we see: a company retained for a licence or a lease, nobody instructed to file, and several years discovered at once. It is also the simplest to clear, because a year with no trading has little behind it to reconstruct and nothing accruing on an unpaid balance. Delay is what turns a straightforward year into an expensive one.
What does the CRA charge a Canadian parent for filing late?
For the 2025 tax year the Canada Revenue Agency charges 5% of the balance owing on a late return, plus 1% of that balance for each full month it stays outstanding, to a maximum of 12 months. The penalty does not compound, but interest compounds daily on the unpaid balance. Those figures are Canadian and say nothing about the Indian charge on a late corporate return, which follows its own rules. When both are open we deal first with the side where interest is running on real money.
Does our late ITR-6 hold up the parent's own return?
Often, in two ways. The parent may need the subsidiary's tax position for its own reporting, and where relief for Indian tax is claimed abroad the claim rests on tax actually established, which an unfiled return has not established. The practical effect is that the parent either files without the claim or files on an estimate to be amended. Where a group has both open we set the order deliberately, usually completing the Indian year the foreign claim depends on before the foreign return is delivered.
We file ITR-6 late most years — does the charge get worse?
Not automatically, and the idea that a second late year simply doubles everything is wrong. On the Canadian side the higher rate for the 2025 tax year, 10% of the balance owing plus 2% for each full month to a maximum of 20 months, applies where the Canada Revenue Agency issued a demand to file and charged a late-filing penalty in any of the three preceding tax years. Repetition on its own does not trigger it; a demand plus a charged penalty does. India works out its own charge under its own rules.
What are Form 15CA and Form 15CB?
They are the certification pair required before certain remittances leave India. Form 15CA is the remitter's declaration filed online; Form 15CB is the accountant's certificate supporting the tax treatment and the rate applied, including any treaty relief. Which combination you need depends on the nature and size of the payment, and banks will generally not process the remittance without them. See Form 15CA.
Can an NRI claim back TDS deducted on Indian income?
Yes, by filing an Indian return for the year. Withholding on rent, interest, dividends, professional fees or a property sale is an advance payment, not a final tax, so where the actual liability is lower — because of the treaty, because of the basic exemption, or because the deduction was computed on gross proceeds rather than gain — the excess comes back as a refund. It needs your PAN, a validated Indian bank account and the deductor's statement filed. See Indian filing and credit claims.
