Domestic Companies

• Companies incorporated under Indian laws are considered domestic companies.
  
• These include public limited, private limited, and one-person companies.
  
• They are liable to pay tax on their worldwide income.
  
• Turnover, nature of income, and applicable tax regime determine the tax rate.
  
• Start-ups and small companies may get concessional tax rates under certain provisions.
  

Foreign Companies

• Foreign companies are incorporated outside India.
  
• They are liable to pay tax on income earned or deemed to be earned in India.
  
• Income may include royalties, dividends, technical fees, and business income.
  
• Taxation depends on agreements under the Double Taxation Avoidance Agreement.
  
• A flat rate of 40 percent is generally applicable to foreign companies.
  

Companies Opting for Concessional Tax Regimes

• Companies choosing section 115BAA pay 22 percent tax without major exemptions.
  
• New manufacturing companies under section 115BAB pay 15 percent tax.
  
• These regimes are optional and come with compliance conditions.
  
• Companies must forgo various deductions to avail of lower rates.
  
• Filing form 10-IC or 10-ID is necessary to opt for these regimes.
  

Liability Based on Income Thresholds

• Companies are taxed based on their total annual turnover.
  
• Those with turnover up to ₹400 crore enjoy lower tax rates.
  
• Higher turnover attracts standard corporate tax rates.
  
• Surcharge and cess apply based on income levels.
  
• Companies must calculate income as per prescribed accounting standards.
  

Special Entity Considerations

• LLPs are taxed under partnership firm rules, not corporate tax.
  
• Co-operative societies and trusts follow separate tax provisions.
  
• SEZ units and start-ups may receive special tax exemptions.
  
• Loss-making companies may still be liable under Minimum Alternate Tax.
  
• Companies under liquidation or insolvency still need to fulfill tax duties.