Definition of Corporate Tax

• Corporate tax is a direct tax levied on the net income or profit of companies.
  
• It is applicable to both domestic and foreign companies operating in India.
  
• The tax is governed under the Income-tax Act, 1961.
  
• Only registered companies are liable to pay corporate tax.
  
• It is assessed annually based on the company’s financial statements.
  

Types of Companies Taxed

• Domestic companies are those registered under Indian law.
  
• Foreign companies are incorporated outside India but earn income within the country.
  
• Tax rates differ based on the type of company.
  
• Start-ups and manufacturing companies may be eligible for concessional rates.
  
• International taxation rules apply to foreign companies.
  

Corporate Tax Rates

• Domestic companies with turnover up to ₹400 crore are taxed at 25 percent.
  
• Companies above ₹400 crore turnover are taxed at 30 percent.
  
• Companies under section 115BAA are taxed at 22 percent.
  
• Manufacturing companies under section 115BAB are taxed at 15 percent.
  
• Foreign companies are taxed at a flat 40 percent rate.
  

Additional Charges and Conditions

• A surcharge of 7 or 12 percent applies based on income slabs.
  
• A health and education cess of 4 percent is added to the tax amount.
  
• Companies must pay advance tax in four quarterly instalments.
  
• Late payment attracts interest under relevant tax sections.
  
• Filing of income tax returns is mandatory for all companies.
  

Compliance and Legal Provisions

• Companies must maintain proper books of accounts.
  
• An audit report under section 44AB is required if turnover exceeds limits.
  
• Non-compliance may lead to penalties and prosecution.
  
• Minimum Alternate Tax applies to certain companies at 15 percent.
  

Tax credit and exemptions are available only if conditions are met.