Key takeaways
- Check every past foreign investment: FC-GPR within 30 days of allotment and FC-TRS within 60 days.
- Reconcile GST returns with the books and input credit with supplier filings.
- Pull open income-tax demands and TDS defaults from the government portals — they transfer with the company.
Financial
- Audited financial statements for three years, with the latest management accounts and the trial balance.
- Revenue by customer, product and month; top-10 customer contracts; receivables ageing.
- Bank statements reconciled to the books — especially for cash-heavy businesses.
- Related-party transactions and balances; loans to and from promoters.
- Debt, guarantees and charges (cross-check MCA’s index of charges).
Income tax and GST
- Income-tax returns, assessment orders and every open demand or notice on the e-filing portal.
- TDS returns and default notices — unpaid TDS becomes the buyer’s problem.
- GST: sales in returns vs books, input credit claimed vs credit available, export refunds and LUTs.
- Transfer-pricing reports if the company deals with group entities.
FEMA and foreign investment
- Every share issue to non-residents: FC-GPR filed within 30 days, with a valuation certificate supporting the price.
- Every transfer between residents and non-residents: FC-TRS within 60 days of the transfer or receipt of funds, whichever is earlier, at a price within the pricing guidelines.
- FLA returns, ODI filings for overseas subsidiaries, ECB reporting.
- Sectoral caps and the beneficial-ownership position under Press Note 3 (as amended in 2026). Late filings can usually be fixed — at a cost; see the FEMA late fee calculator.
Corporate and cap table
- Share-capital history from incorporation, reconciled to MCA filings and the register of members.
- ESOP scheme, grants and the pool; convertible notes and SAFEs — see the cap table guide.
- Board and shareholder approvals for key transactions; director KYC; statutory registers.
Labour and payroll
- PF, ESI and professional tax registrations and payments; gratuity provisioning.
- Consultants who are really employees; key-person agreements and non-competes.
Contracts, IP and licences
- Change-of-control clauses in customer, supplier and lease agreements.
- Trademark and IP ownership — in the company’s name, not the founder’s.
- Business licences and sector registrations (these, with litigation, are for your legal counsel).
Want it run for you? Due diligence in India — financial, tax and FEMA, with SPA drafting points.
Sources
Frequently asked questions
What documents are needed for due diligence of an Indian company?
Typically three years of audited accounts, management accounts, bank statements, tax returns and assessments, GST returns, FEMA filings for foreign investment, the share-capital history, statutory registers, key contracts and payroll records.
What are the biggest red flags in Indian due diligence?
Unreported or mispriced foreign investment, GST input credit that doesn't match supplier filings, open tax demands, undisclosed charges on assets, cash or related-party transactions, and staff classed as consultants to avoid payroll taxes.
Who does FEMA due diligence in India?
Chartered Accountants experienced in RBI and FDI filings typically check FC-GPR, FC-TRS, pricing and FLA compliance, alongside legal counsel for sector and approval questions.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.