Standard Corporate Tax Rates

• Domestic companies with a turnover up to ₹400 crore are taxed at 25 percent.
  
• Companies with turnover exceeding ₹400 crore are taxed at 30 percent.
  
• These rates are applicable before adding surcharge and cess.
  
• The rates apply to companies not opting for any concessional scheme.
  
• Taxable income is calculated after applying deductions and exemptions.
  

Concessional Tax Regime Under Section 115BAA

• Domestic companies can opt to pay tax at 22 percent.
  
• This regime requires companies to forego most deductions and exemptions.
  
• No Minimum Alternate Tax applies under this section.
  
• It is optional and irrevocable once chosen.
  
• Filing Form 10-IC is required to opt for this regime.
  

Special Rate for New Manufacturing Companies (Section 115BAB)

• New manufacturing companies incorporated on or after October 1, 2019, can opt for a 15 percent tax rate.
  
• The company must commence manufacturing by March 31, 2024.
  
• This regime also excludes major deductions and incentives.
  
• No MAT is applicable if this option is selected.
  
• Filing Form 10-ID is mandatory to claim this rate.
  

Surcharge and Cess

• A 7 percent surcharge applies if income exceeds ₹1 crore but is less than ₹10 crore.
  
• A 12 percent surcharge applies if income exceeds ₹10 crore.
  
• Health and education cess at 4 percent is levied on the total of tax and surcharge.
  
• These additional charges increase the effective tax rate.
  
• All companies, regardless of regime, are subject to this cess.
  

Effective Tax Rates Summary

• Normal companies (up to ₹400 crore turnover): around 26 percent with cess.
  
• Companies under 115BAA: around 25.17 percent including cess.
  
• Companies under 115BAB: around 17.16 percent including cess.
  
• Companies over ₹400 crore turnover: effective rate close to 34.94 percent with surcharge and cess.
  
• Selection of tax regime impacts net payable tax significantly.