{"id":7592,"date":"2022-03-09T14:49:52","date_gmt":"2022-03-09T09:19:52","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=7592"},"modified":"2022-05-24T10:46:26","modified_gmt":"2022-05-24T05:16:26","slug":"corporate-tax-in-india","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/","title":{"rendered":"Corporate Tax in India: Overview, Rates, Eligibility and Tax Liability"},"content":{"rendered":"\n<p>Governments impose a mandatory financial charge on all eligible citizens and organizations every year to collect revenue to finance Government activities. It is done through mainly two different types of taxation processes<\/p>\n\n\n\n<ul><li>Direct Tax&nbsp;<\/li><li>Indirect Tax&nbsp;<\/li><\/ul>\n\n\n\n<p>While taxpayers pay non-transferable taxes directly to the Government, known as a direct tax, indirect taxes are transferable taxes levied on products or services. <a href=\"https:\/\/gstcouncil.gov.in\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Goods and Services Tax (GST)<\/a> and <a href=\"https:\/\/www.incometax.gov.in\/iec\/foportal\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Income Tax<\/a> are examples of <a href=\"https:\/\/www.tickertape.in\/blog\/difference-between-direct-and-indirect-tax\/?utm_source=blog&amp;utm_medium=article\">indirect and direct taxes<\/a>, respectively.&nbsp;<\/p>\n\n\n\n<p>Let us read more about them in detail.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Direct-taxes\" title=\"Direct taxes&nbsp;\">Direct taxes&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#What-is-corporate-tax\" title=\"What is corporate tax?\">What is corporate tax?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Who-is-liable-for-corporate-tax-payment\" title=\"Who is liable for corporate tax payment?\">Who is liable for corporate tax payment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Corporate-tax-rates-in-India\" title=\"Corporate tax rates in India\">Corporate tax rates in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#1-The-tax-rate-for-partnership-firms-including-Limited-Liability-Partnerships-LLPs\" title=\"1. The tax rate for partnership firms including Limited Liability Partnerships (LLPs)\">1. The tax rate for partnership firms including Limited Liability Partnerships (LLPs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#2-The-tax-rate-for-local-authorities\" title=\"2. The tax rate for local authorities&nbsp;\">2. The tax rate for local authorities&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#3-The-tax-rate-for-domestic-companies\" title=\"3. The tax rate for domestic companies\">3. The tax rate for domestic companies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#4-The-tax-rate-for-co-operative-societies\" title=\"4. The tax rate for co-operative societies\">4. The tax rate for co-operative societies<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#5-The-tax-rate-for-foreign-companies\" title=\"5. The tax rate for foreign companies\">5. The tax rate for foreign companies<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Due-date-for-filing-an-income-tax-return\" title=\"Due date for filing an income tax return\">Due date for filing an income tax return<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Tax-return-forms-to-be-filed\" title=\"Tax return forms to be filed&nbsp;\">Tax return forms to be filed&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Exemptions-in-corporate-tax-payment\" title=\"Exemptions in corporate tax payment\">Exemptions in corporate tax payment<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.tickertape.in\/blog\/corporate-tax-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\" id=\"direct\"><span class=\"ez-toc-section\" id=\"Direct-taxes\"><\/span><strong>Direct taxes&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Direct taxes can again be divided into two types \u2013<\/p>\n\n\n\n<ul><li>Personal <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">Income Tax<\/a><\/li><li>Corporate Tax<\/li><\/ul>\n\n\n\n<p>Corporate taxes are charged on the total income of business organizations operating in any country. The corporate tax rates differ widely from one country to another, with some nations being immensely popular as tax havens due to their very low rates of taxation on businesses.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what\"><span class=\"ez-toc-section\" id=\"What-is-corporate-tax\"><\/span><strong>What is corporate tax?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Governments levy corporate tax on the net profits made by a business entity operating in the country. These tax rates are calculated on the taxable income of the company, which is the total revenue generated in a financial year minus some operating costs, such as \u2013<\/p>\n\n\n\n<ul><li>General and Administrative (G&amp;A) expense<\/li><li>Research and Development (R&amp;D) expense<\/li><li>Selling and Marketing expense<\/li><li>Cost of Goods Sold (COGS)<\/li><li>Depreciation<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"who\"><span class=\"ez-toc-section\" id=\"Who-is-liable-for-corporate-tax-payment\"><\/span><strong>Who is liable for corporate tax payment?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian Companies Act, 1956 mandates that all private and public companies registered and operating in India are liable to pay corporate taxes according to the rates determined by the Government. All domestic and foreign companies operating on Indian soil have to pay taxes to the Government under the Income Tax Act. However, the Government taxes a foreign company on the revenue generated within the country only, while domestic companies have to pay taxes on their universal incomes.&nbsp;<\/p>\n\n\n\n<p>The types of companies have been defined accordingly to calculate the corporate tax:<\/p>\n\n\n\n<ul><li><strong>Foreign companies<\/strong> &#8211; These business entities are not registered under the Indian Companies Act and are controlled by their headquarters located on foreign soil<\/li><li><strong>Domestic companies<\/strong> &#8211; These corporations are registered under the Indian Companies Act. It also includes those companies that are situated on foreign soil but have their administrative headquarters located in India.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"india\"><span class=\"ez-toc-section\" id=\"Corporate-tax-rates-in-India\"><\/span><strong>Corporate tax rates in India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Indian Government levies varying corporate tax rates on business entities depending on their nature. The following tax rates are for the FY 2020-2021 and AY 2021-2022<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1-The-tax-rate-for-partnership-firms-including-Limited-Liability-Partnerships-LLPs\"><\/span>1. The tax rate for partnership firms including Limited Liability Partnerships (LLPs)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Tax Rate&nbsp;<\/strong><\/td><td><strong>Surcharge&nbsp;<\/strong><\/td><td><strong>Education cess<\/strong><\/td><\/tr><tr><td>30%<\/td><td><a href=\"https:\/\/cbic-gst.gov.in\/gst-goods-services-rates.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">12% of income tax where total income exceeds Rs 1 cr<\/a><\/td><td>4% of income tax plus surcharge<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2-The-tax-rate-for-local-authorities\"><\/span>2. The tax rate for local authorities&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Tax Rate&nbsp;<\/strong><\/td><td><strong>Surcharge&nbsp;<\/strong><\/td><td><strong>Education cess<\/strong><\/td><\/tr><tr><td>30%<\/td><td>12% of income tax where total income exceeds Rs 1 cr<\/td><td>4% of income tax plus surcharge<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3-The-tax-rate-for-domestic-companies\"><\/span>3. The tax rate for domestic companies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Particulars<\/strong><\/td><td><strong>Tax rate<\/strong><\/td><\/tr><tr><td>If turnover or gross receipt of the company does not exceed Rs. 400 cr in the previous year 2018-19<\/td><td>25%<\/td><\/tr><tr><td>If the company opted for Section 115BA<\/td><td>25%<\/td><\/tr><tr><td>If the company opted for Section 115BAA<\/td><td>22%<\/td><\/tr><tr><td>If the company opted for Section 115BAB<\/td><td>15%<\/td><\/tr><tr><td>Any other domestic company<\/td><td>30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The rate of surcharge levied also varies depending on the net income of the companies. However, the education cess imposed remains constant at 4% of income tax plus surcharge.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Taxable income<\/strong><\/td><td><strong>surcharge<\/strong><\/td><\/tr><tr><td>Total income exceeds Rs.1 cr<\/td><td>7% of income tax<\/td><\/tr><tr><td>Total income exceeds Rs.10 cr<\/td><td>12% of income tax<\/td><\/tr><tr><td><a href=\"https:\/\/www.incometaxindia.gov.in\/_layouts\/15\/dit\/mobile\/viewer.aspx?path=https:\/\/www.incometaxindia.gov.in\/acts\/income-tax%20act,%201961\/2020\/102120000000075676.htm\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Domestic company opted for Sections 115BAA and 115BAB<\/a><\/td><td>10% of income tax<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4-The-tax-rate-for-co-operative-societies\"><\/span>4. The tax rate for co-operative societies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Taxable Income<\/td><td>Tax Rate<\/td><\/tr><tr><td>Up to Rs. 10,000<\/td><td>10%<\/td><\/tr><tr><td>Rs. 10,001 to Rs. 20,000<\/td><td>22%<\/td><\/tr><tr><td>Above Rs. 20,000<\/td><td>30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The rate of surcharge levied is 12% of income tax where total income exceeds Rs. 1 cr and 10% in cases of concessional schemes. The education cess is constant at 4% of income tax plus surcharge.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5-The-tax-rate-for-foreign-companies\"><\/span>5. The tax rate for foreign companies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Tax rate&nbsp;<\/strong><\/td><td><strong>Surcharge<\/strong><\/td><td><strong>Education cess<\/strong><\/td><\/tr><tr><td>40%<\/td><td>2% of income tax where total income exceeds Rs. 1 cr5% of income tax where total income exceeds Rs. 10 cr<\/td><td>4% of income tax plus surcharge<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"due\"><span class=\"ez-toc-section\" id=\"Due-date-for-filing-an-income-tax-return\"><\/span><strong>Due date for filing an income tax return<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The Income Tax Act mandates all business entities, including foreign corporations, to file their income tax return on or before 31 October every year. It is applicable even for companies registered under the Indian Companies Act during that same financial year.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"tax\"><span class=\"ez-toc-section\" id=\"Tax-return-forms-to-be-filed\"><\/span><strong>Tax return forms to be filed&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Companies have to file their <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-file-itr\/?utm_source=blog&amp;utm_medium=article\">income tax returns<\/a> using tax return forms of the following types\u2013<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Particulars<\/strong><\/td><td><strong>Tax return forms<\/strong><\/td><\/tr><tr><td>All companies except those claiming a deduction under section 11<\/td><td>Form ITR 6<\/td><\/tr><tr><td>All companies registered under section 8 of the companies act, 2013<\/td><td>Form ITR 7<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"in\"><span class=\"ez-toc-section\" id=\"Exemptions-in-corporate-tax-payment\"><\/span><strong>Exemptions in corporate tax payment<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Business entities are exempted from corporate tax payments subject to certain conditions \u2013<\/p>\n\n\n\n<ul><li>Start-up businesses concerning innovation development with scalable business models and the potential to generate high yields and employment rate<\/li><li>Corporations handling storage and transportation of food grains<\/li><li>Entities concerned with refining or commercial production of mineral oils<\/li><li>Establishments operating hospitals in rural areas<\/li><li>Companies developing affordable housing projects<\/li><li>Exports and International Financial Services Centres (IFSCs)<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Filing corporate taxes can be a complex issue if you do not read and understand all the rules and regulations. To avoid attracting heavy penalties in place of missing out on filing corporate tax returns, consult <a href=\"https:\/\/www.tickertape.in\/blog\/professional-tax\/\">professional tax<\/a> consultants who can aid you through this complicated process.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Want to know more about corporate tax rate in India? Click here to know about this tax that is levied on companies, find out who pays this tax and the latest tax rates!<\/p>\n","protected":false},"author":54,"featured_media":7615,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[8,1741],"tags":[1487,1486],"acf":[],"modified_by":null,"jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/03\/08-1.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/7592"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/54"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=7592"}],"version-history":[{"count":8,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/7592\/revisions"}],"predecessor-version":[{"id":8553,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/7592\/revisions\/8553"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/7615"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=7592"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=7592"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=7592"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}