Is compensation of employees paid by a foreign company located in India included/excluded domestic income of India?

Yes,

Compensation paid will be included in the domestic factor income as a foreign company is located within the domestic territory of India.

Explanation:-

Explanation:-

The profits earned by the residents and non-residents (foreign companies) within the domestic territory of India is included in the domestic income.

All incomes and profits generated by all within the domestic territory of India will be included in the domestic income of India.