Two alternative tests can permit Indian taxation
An eligible US-resident individual earning income from independent professional activities performed in India must examine Article 15 of the India–US DTAA. India may tax the relevant income if the professional has a fixed base regularly available in India for those activities, or if the stay in India reaches an aggregate of 90 days in the relevant taxable year. The fixed-base route has no minimum 90-day stay requirement. Exactly 90 days meets the presence test.
This article addresses independent professional services, principally for a US-resident individual working in India in tax year 2026–27, with sources checked on 23 October 2026. It determines treaty taxing rights, not the final tax rate, deductible expenses or a universal withholding percentage. It assumes treaty residence is established. Citizenship, dual residence and special-category income require their own review.
Identify the recipient before choosing a treaty article
Article 15 covers an individual or a firm of individuals other than a company. The professional-services definition includes independent scientific, literary, artistic, educational and teaching activities, as well as the independent work of physicians, surgeons, lawyers, engineers, architects, dentists and accountants. A company cannot simply adopt this article because an employee is a qualified engineer.
For firm claims, establish the entity’s legal form, treaty residence and entitlement; do not assume that a US partnership label resolves every residence or fiscally transparent-entity question. The examples below deliberately use individuals. The US Treasury Technical Explanation of Article 15 distinguishes activity undertaken on the provider’s own account, with the provider receiving income and bearing the risk of loss, from employment. Directors, entertainers, athletes, government service and certain teaching/research arrangements can fall under more specific treaty articles.
Article 12(5)(e) excludes the defined professional services to the relevant individual or firm from included-service treatment. This is not a blanket exemption for every consultancy invoice. Determine recipient, activity and the appropriate article first. Employee day counts under Article 16 and a company’s service-PE test under Article 5 must not be substituted for Article 15.
Maintain a presence file and a separate fixed-base file
| Test | What to establish | What the conclusion does not establish |
|---|---|---|
| Article 15(1)(a) | A fixed base regularly available for performing the independent activities; attributable income. | A short visit does not automatically defeat this route. |
| Article 15(1)(b) | Stay amounting to at least 90 days in the relevant taxable year, aggregating periods. | A 183-day employment rule or rolling twelve-month PE test is not the stated test. |
| Income and domestic computation | Indian-performed services, attribution and applicable Indian tax provisions. | Permission to tax is not a flat treaty rate on every worldwide fee. |
For the Indian source-State review in the principal examples, use the Indian April–March tax-year boundary. Keep a dated travel calendar tied to passports and immigration records and reconcile multiple trips without counting a calendar day twice. The examples expressly count each arrival and departure date as a presence day. Actual disputed travel or partial-day facts need a documented counting position; do not omit weekends merely because no client work was performed.
A fixed-base conclusion depends on availability and actual professional use, not a rupee rental threshold. Examine access rights, dedicated facilities, duration and the work performed. A rented room is not automatically a fixed base, and having no personally owned office is not proof that no fixed base exists. Record the facts and qualification instead of inventing a minimum number of days or square feet.
Attribute the income and retain current relief documents
The fixed-base limb expressly limits the Indian taxing right to attributable income. The Technical Explanation also explains that Article 15 concerns services performed in the source State; it does not automatically draw all foreign-performed professional income into Indian taxation. Use contracts, deliverables, fee terms and a supported allocation. A calendar-day fraction is not a statutory universal attribution formula.
Paragraph III of the treaty Protocol addresses income attributable to a fixed base during its existence even where payment is deferred until after it ceases. Receipt after closure therefore does not, by itself, remove the treaty taxing right. The year of charge, accounting basis and collection obligations remain domestic-law questions.
For current Indian relief, section 159 of the Income-tax Act, 2025 includes the more-beneficial treatment rule, anti-avoidance interaction and residence-certification/prescribed-information requirements. The Income-tax Rules, 2026, Rule 75 and Form 41 govern the current prescribed treaty information. Keep the TRC period aligned with the claim and separately assess payment compliance. The cross-year example is a day-count comparison, not advice to reuse current forms for an earlier statutory period.
Worked illustrations
These illustrations use fictional facts and expressly stated assumptions. Amounts are Indian rupees unless a different currency or unit is specified. They are independent examples, not findings about any actual client.
Illustrative example 1: An 89-day stay with no fixed base
A US-resident independent architect is present from 1 May to 28 July 2026 inclusive: 31 May days + 30 June days + 28 July days = 89. Assume no other Indian presence, no regularly available fixed base and no overriding special article. The 90-day limb is not met. This does not establish exemption under every other fact pattern.
Illustrative example 2: One additional day reaches the treaty boundary
Change departure to 29 July 2026. The presence is 31 + 30 + 29 = 90 days. Exactly 90 meets Article 15(1)(b); “more than 90” would be the wrong test. Determine the relevant Indian-performed income and domestic computation rather than taxing only the fee earned on day 90.
Illustrative example 3: Separate trips must be aggregated
Assume three non-overlapping Indian visits in tax year 2026–27: 1–30 April, 1–30 July and 1–30 October 2026, each inclusive. The total is 30 + 30 + 30 = 90 days. Three visits below 90 days each do not avoid the aggregate test. Include all supported presence, not only billable working days.
Illustrative example 4: A trip crossing 31 March uses the relevant year boundary
Assume one visit from 15 January to 15 May 2026 inclusive and no other presence or fixed base. The full visit is 121 days: 76 fall in 1 April 2025–31 March 2026 and 45 in 1 April 2026–31 March 2027. Neither year reaches 90 on these facts. Combining them into a rolling 121-day test would replace the wording of Article 15(1)(b). Review each year under its own applicable domestic framework.
Illustrative example 5: A short stay does not switch off a supported fixed base
An independent engineer stays ten days in India. Assume a reasoned review establishes a fixed base regularly available for the activities. Total fees are ₹12,00,000, of which a supported ₹3,00,000 is attributable to the Indian fixed base and ₹9,00,000 is unrelated foreign-performed work. The fixed-base route can permit tax on the ₹3,00,000 despite the short stay. The 25% allocation is an assumed evidenced conclusion, not a prescribed percentage.
Illustrative example 6: Presence is not a worldwide-fee allocation formula
A professional meets the 90-day presence test. Contracts and deliverables establish ₹6,00,000 income from Indian-performed activities and ₹4,00,000 from separate US-performed activities: total ₹10,00,000. The treaty review must distinguish the ₹6,00,000 source-service amount; reaching 90 days does not automatically recharacterise the full ₹10,00,000 as Indian-performed income. Expenses and final tax are assessed separately.
Illustrative example 7: Deferred payment after the fixed base closes
Assume ₹6,00,000 income is established as attributable to an Indian fixed base during its existence. ₹2,00,000 is paid before closure and ₹4,00,000 afterward. The total attributable amount remains ₹6,00,000. The Protocol prevents the mere payment deferral from removing the source-State taxing right; determine the relevant charge and withholding timing independently.
Ten-step verification table
| Step | Verification | Evidence to retain |
|---|---|---|
| 1 | Confirm the actual recipient and independent capacity. | Contract, legal form and employment-risk analysis. |
| 2 | Establish treaty residence and relevant certification period. | TRC and residence memorandum. |
| 3 | Check whether a more specific personal-income article applies. | Nature of remuneration and treaty-article analysis. |
| 4 | Determine the relevant source-State taxable year. | Year-boundary note and applicable domestic law. |
| 5 | Build a reconciled, non-duplicated presence calendar. | Passport, immigration and travel evidence. |
| 6 | Assess fixed-base availability independently of day count. | Access arrangements, facilities and actual-use records. |
| 7 | Map fees to Indian and foreign performance and any fixed base. | Deliverables, fee terms and supported attribution. |
| 8 | Review deferred receipts attributable to a former fixed base. | Accrual, closure and receipt schedules. |
| 9 | Apply current Indian treaty-document and payment requirements. | Section 159 file and prescribed information. |
| 10 | Approve a qualified conclusion and monitor changed facts. | Taxing-right memorandum, open issues and change triggers. |
Sixteen practitioner FAQs
1. Does Article 15 apply to a consulting company?
The stated population is individuals and firms of individuals other than companies. Determine a company’s appropriate treaty provisions separately.
2. Can every US partnership claim automatically?
No. Legal form, treaty residence and entitlement, including any transparency issues, need a specific analysis.
3. Is employment income tested under this article?
No. Establish independence and review Article 16 or another applicable provision for employment remuneration.
4. Does exactly 90 days trigger the presence limb?
Yes. Article 15 refers to a stay amounting to or exceeding 90 days in aggregate.
5. Are multiple visits counted separately?
They are aggregated within the relevant taxable year. A separate visa or invoice does not reset the count.
6. Is the rule any rolling twelve-month period?
That is not Article 15(1)(b)’s wording. Identify the relevant taxable year rather than importing a different treaty test.
7. Can weekends be deleted from the presence file?
Not merely because the person did no professional work. Reconcile actual presence and document the counting treatment.
8. Must a fixed base be personally owned?
Ownership alone does not decide regular availability. Examine the actual rights, access and use.
9. Is there a minimum fee before a fixed base matters?
Article 15 does not state a rupee threshold for the fixed-base condition. Do not invent one.
10. Does a ten-day visit always avoid Indian taxation?
No. A supported regularly available fixed base can independently permit taxation of attributable income.
11. Does Article 15 prescribe a flat withholding rate?
No. It allocates taxing rights; the applicable Indian computation and payment-compliance provisions need separate assessment.
12. Can fees be allocated using presence days automatically?
No. Use a defensible attribution based on the relevant services and evidence. A simple day fraction is not universally prescribed.
13. Does passing 90 days tax every global receipt?
No. Identify the income within the article, including where the relevant services were performed.
14. Does closure before payment remove fixed-base taxation?
Not merely because payment was deferred. The Protocol preserves the relevant attributable-income taxing right.
15. Is the TRC enough to establish the day count?
No. Residence certification and actual Indian presence require different evidence.
16. What facts should cause the payer to reassess?
Additional visits, changed office access, a change of legal recipient, revised deliverables or deferred fixed-base receipts can change the analysis.
Conclusion
Identify the independent professional, test fixed-base availability and annual presence separately, then attribute the income. A payer’s decision should rest on that evidence rather than a borrowed PE threshold or a generic non-resident rate.