Services
Corporate Tax
India's tax system is broadly classified into two categories: Direct Taxes and Indirect Taxes.
Direct Taxes are levied on the income earned by various business entities during a financial year. The Income Tax Department registers different types of taxpayers, each with distinct tax rates. For instance:
- Individuals and companies, though both taxpayers, are taxed at different rates.
- Various business entities, such as partnerships, sole proprietorships, and corporations, are taxed according to their specific income slabs.
This differentiation in tax rates ensures a fair and equitable taxation system, acknowledging the unique financial circumstances of each taxpayer."
Types of Taxes in India
- - Direct Taxes: Levied on the income earned by different types of business entities in a financial year ¹.
- - Indirect Taxes: Not directly paid by the taxpayer, but by the end consumer ¹.
Corporate Tax
- - Definition: A direct tax levied on the profits or assets of corporations or other similar legal entities ².
- - Applicability: Domestic and foreign companies are liable to pay corporate tax under the Income-tax Act ¹.
- - Tax Rates: Vary based on the type of company and its income ¹.
Tax Rates for Domestic Companies
- - 25%: Companies with a turnover of up to Rs 400 crore in FY 2017-18 ¹.
- - 22%: Companies that do not claim certain deductions under the Income Tax Act ².
- - 30%: Other domestic companies ².
Tax Rates for Foreign Companies
- - 50%: Royalties and fees for technical services ¹.
- - 40%: Other income ¹.
Additional Charges
- - Surcharge: 7% to 12% based on the total income ¹.
- - Health and Education Cess: 4% of the total income tax and surcharge ¹.
- - Minimum Alternate Tax (MAT): 15% of the book profits ¹.