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 2011-12 fiscal, domestic companies, with total income of more than 10 million rupees, need to pay a corporate tax of 32.445 percent. This includes a basic rate of 30% along with a surcharge of 5 percent and an education cess of 2%.

In case their aggregate income is less than INR 10 million, the domestic companies are required to pay corporate taxes at a rate of 30.9 percent. This is inclusive of a direct tax of 30% and an education cess of 3 percent.

Corporate Tax Rate for International Companies



According to the corporate tax rates for 2011-12 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 2.5%.

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%.

Important Corporate Tax Rates in India


Following are some other important taxes for the 2011-12 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.

Corporate Withholding Taxes in India 2011-12


The following rates are applicable in case of withholding taxes that come into force when payments are made to non-residents:

  • Interest - 20 percent
  • Technical Services - 10 percent
  • Royalties - 20 percent
  • Other Services - 40 percent of earnings
Last Updated on 18/6/2012

Income Tax Calculator 2012 - 2013