Applicable Corporate Tax Rate in India for Assessment Year 2023-24

In India, corporate tax is a type of direct tax that is levied on the profits made by both domestic and foreign businesses. While foreign firms are only subject to taxation on income generated within India, domestic corporations are subject to taxation on their entire worldwide income.

Corporate tax rates are determined by subtracting costs such as depreciation, cost of goods sold, selling general and administration expenditures from a company’s revenues. These deductions are then applied to the company’s earnings. Businesses in the nation pay corporate tax based on their income, which is a major source of funding for the government.

corporate tax

Different Corporate Entity Types

Both domestic and foreign businesses must pay corporate tax. Businesses must pay corporation tax, which is a part of their earnings, just like individuals must pay income taxes. Corporate businesses are required to pay this tax, which is also known as company tax or corporation tax.

A legal construct known as a corporation, or corporate entity, is acknowledged as existing independently of its shareholders. Because of this legal distinction, the company is separate from its stockholders and has its own rights and obligations. The idea of a business having its own legal personality guarantees that it is separate from its owners or managers and that it must pay taxes and comply with legal requirements.

There are two kind of corporations:

Domestic Corporations:

These businesses were founded and registered in accordance with the 2013 Companies Act of India. Even though a foreign firm is foreign in origin, it might be included in a domestic corporation if all of its management and control are located in India.

Foreign Corporations: 

These are businesses that are based outside of India, abroad. A foreign corporation continues to be recognized if any portion of its management or control is based outside of India. In the Indian context, a company is considered a foreign corporation if the primary decision-making power is located outside of India.

corporate tax

Corporate Tax Rate

Depending on the kind of business, different corporation tax rates apply. One rate of taxation applies to domestic corporations, which are businesses registered under the Companies Act of 2013. In contrast, foreign corporations pay taxes at a different rate.

Corporate Tax for Domestic Companies

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Read More: The GST amnesty scheme offers a respite, with the deadline for filing appeals set for January 31, 2024.


Corporate Tax for Foreign Companies

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