Corporate Tax Rate in India

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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 entirely on the origin of a company. In India
the corporate tax rates differ with regards to the nature of the ownership of the company and their income.

Corporate Tax Rate for Domestic Companies

As per the corporate tax rates for the 2015-16 fiscal, domestic companies, are levied with an income tax at the rate of 30%. Surcharge is applied in the following cases:
  • If the company has a total income less than Rs. 1 crore, then it does not have to pay any income tax.
  • If the net income of the company for that year is in the range of Rs. 10 crore then 5% surcharge is applied on its net income.
  • If the net income of the company for that year exeeds Rs. 10 crore then 10% surcharge is applied on its net income

Corporate Tax Rate for International Companies

According to the corporate tax rates for 2015-16 fiscal, international business organizations working in India and earning more than 10 million rupees need to pay a corporate tax rate of 42.024 percent. This includes a basic tax of 40%, an education cess of 3 percent and a surcharge of 2.%.

If their aggregate income is less than INR 10 million they have to pay a corporate tax of 41.2 percent. This includes a basic tax of 40 percent along with an education cess of 3%.

If the net income for a foreign company exceeds Rs 10 crores then the surcharge that it will have to pay will be 5%.

Important Corporate Tax Rates in India
Following are some other important taxes for the 2015-16 that are applicable for the business entities in addition to the corporate taxes:

Minimum Alternate Tax at a rate of 18.5 percent along with applicable cess and surcharge. Fringe benefits are liable to be taxed at 30 percent along with an additional education cess of 3% on the aggregate tax amount. Companies whose turnover exceeds 10 million rupees, need to pay an extra surcharge of 10% on their basic tax.

A dividend distribution tax of 16.22 percent is applicable for the domestic companies. In case of short term capital gains, the normal basic tax rates are applied but in case of the long term ones, the tax rate varies between 10 and 20 percent. Short term profits, which are made from selling equity shares or units of equity based funds, can be taxed at 15 percent. However, long term profits in these transactions are exempted from taxes.

Dividends received by Indian companies from outside India, are subjected to a tax rate of 30 percent along with cess and surcharge. A gross tax rate of 15 percent has also been proposed in case an Indian company has got dividends from an overseas company. It is expected this will encourage Indian companies to repatriate their money.

Indirect taxes such as CENVAT, Service Taxes, VAT, and Custom's Duties are charged as well. In case the net wealth of a company is more than 3 million rupees, there is a wealth tax of 1 percent on the difference. Change last updated date

Last Updated on 6/29/2015

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