Corporate Tax Rate in India

The corporate tax rate in India is at par with the tax rates of the other nations worldwide. The corporate tax rate in India depends on the origin of the company.

If the company is domicile to India, the tax rate is flat at 30%. But for a foreign company, the tax rate depends on a number of factors and considerations. The companies that are domicile to India are taxed on the global income whereas the foreign companies in India are taxed on their income within the Indian territory. The incomes that are taxable in case of foreign companies are interest gained, royalties, income from the capital assets in India, income from sale of equity shares of the company, dividends earned, etc.

Domestic Corporate Income Taxes Rates:

• For Domestic Corporations the effective tax rate is 30% and the tax rate with surcharge is 30% Attention must be given on the factor that if the taxable income is more than Rs. 1 million then a surcharge of 10% of the tax on income is levied
  
  
• Attention must also be given on the fact that all of the companies formed in India are regarded as Indian domestic companies, even in the case of ancillary units with mother companies in foreign countries

Foreign Companies income tax rates:

• For dividends 20% in case of non-treaty foreign companies and 15% for companies under the treaty based in United States
  
  
• For interest gains 20% in case of non-treaty foreign companies and 15% for companies under the treaty based in United States
  
  
• For royalties 30% in case of non-treaty foreign companies and 20% for companies under the treaty based in United States
  
  
• For technology based services in case of non-treaty foreign companies and 20% for companies under the treaty based in United States
  
  
• For other kinds of income and gains 55% in case of non-treaty foreign companies and 55% for companies under the treaty based in United States
  
  
• Attention must be given on levying inter corporate rates in case the holding is minimum
  
  
• Attention must be given on the fact that the sanctions of the tax authorities on tax withholding
  
  
• Attention must be given on the several of the tax treaties India signed with the other countries and also the various encouraging tax rates

Some of the tax rebates under corporate tax rate in India:

• The gains pertaining to long term capital is subjected to low tax incidence
• The venture capital funds and venture capital companies has special tax provisions
• The Specula tax provisions are applicable for the non resident Indian's involved in activities in India
• Under the Finance Bill 1996, minimum alternative tax (MAT) on the corporate sector is levied