Corporate taxation in India is a critical responsibility for every company operating in the country. From determining the right tax rate to meeting filing deadlines and audit requirements, corporate tax rules and compliance for Indian companies demand accuracy and timely action.
For FY 2024–25 (AY 2025–26), corporate tax continues to be governed by the Income Tax Act, 1961, with compliance monitored by authorities such as the Central Board of Direct Taxes (CBDT) and the Ministry of Corporate Affairs (MCA). This guide explains tax rates, regimes, filing requirements, and key compliance obligations in simple terms.
What Is Corporate Tax in India?
Corporate taxation refers to the tax levied on profits earned by companies operating in India. Business income is taxable on a net income basis, calculated after considering allowable expenses, disallowances, and deductions under Indian tax law.
Corporate tax compliance is essential not only to avoid penalties but also to ensure smooth business operations, access to funding, and investor confidence. Detailed provisions and circulars are published by the Income Tax Department on its official portal:
👉 https://www.incometax.gov.in
Corporate Tax Rates in India for FY 2024–25
India follows a structured corporate tax system with different rates based on turnover and optional concessional regimes.
Standard Corporate Tax Rate
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25% for domestic companies with annual turnover up to ₹400 crore
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Applicable to companies not opting for concessional tax regimes
Companies with turnover of ₹400 crore or less during the specified base year can continue paying tax at this rate, as notified by the CBDT.
Concessional Corporate Tax Regimes
The Income Tax Act allows eligible companies to opt for lower tax rates under specific sections.
Section 115BAA – Domestic Companies (Optional)
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Base tax rate: 22%
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Effective tax rate: 25.17% (including surcharge and cess)
Section 115BAB – New Manufacturing Companies
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Base tax rate: 15%
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Effective tax rate: 17.16%
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Available to eligible manufacturing companies incorporated after the notified date
These concessional regimes require companies to forgo specified deductions and exemptions. Official clarifications are available on the Income Tax Department website.
Surcharge and Health & Education Cess
Corporate tax liability includes surcharge and cess.
For Resident Companies
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No surcharge if income is within the basic threshold
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7% surcharge if total income exceeds ₹1 crore but does not exceed ₹10 crore
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12% surcharge if total income exceeds ₹10 crore
For Foreign Companies
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2% surcharge if income exceeds ₹1 crore
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5% surcharge if income exceeds ₹10 crore
Additionally, a 4% Health and Education Cess applies to the total tax payable.
Corporate Tax Filing Deadlines
Companies, including foreign companies, must file their income tax return on or before 31 October following the end of the financial year.
For AY 2025–26, the due date remains:
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31 October 2025 (for companies requiring audit)
Return filing is done electronically through the official e-filing portal:
👉 https://www.incometax.gov.in/iec/foportal
Late filing can attract interest under Section 234A, penalties, and loss of carry-forward benefits.
Tax Audit and Reporting Requirements
Tax Audit Applicability
Companies crossing prescribed turnover or income thresholds must undergo a tax audit under the Income Tax Act.
Tax audit ensures:
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Correct computation of taxable income
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Proper disclosure of transactions
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Compliance with applicable tax provisions
Audit reports must be filed electronically within prescribed timelines through the income tax portal.
Transfer Pricing and Cross-Border Compliance
Companies engaged in international or specified domestic transactions must comply with:
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Transfer pricing regulations
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Arm’s length pricing norms
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Documentation and reporting requirements
These provisions are critical for companies with foreign subsidiaries, group entities, or cross-border dealings.
Corporate Compliance Under Companies Act, 2013
Corporate tax compliance operates alongside company law compliance under the Companies Act, 2013, administered by the MCA.
Key obligations include:
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ROC filings through the MCA portal
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Filing annual financial statements and annual returns
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Director disclosures and board resolutions
Company filings and compliance requirements are managed digitally via the MCA portal:
👉 https://www.mca.gov.in
Indirect Taxes and Other Obligations
Apart from corporate income tax, companies must also comply with:
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Goods and Services Tax (GST) under the GST law
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TDS and TCS provisions under the Income Tax Act
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Dividend withholding and reporting requirements
GST registrations, returns, and payments are handled through the official GST portal:
👉 https://www.gst.gov.in
Why Corporate Tax Compliance Matters
Non-compliance with corporate tax rules can result in:
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Heavy penalties and interest
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Prosecution in serious cases
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Reputational and operational damage
Strong compliance supports long-term business sustainability and credibility.
Practical Tips for Corporate Tax Compliance
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Choose the tax regime after evaluating long-term impact
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Maintain accurate books, records, and supporting documentation
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Track filing, audit, and payment deadlines carefully
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Stay updated with CBDT notifications and MCA amendments
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Seek professional advice for complex or cross-border transactions
Proactive tax planning reduces risk and improves efficiency.
Final Thoughts: Compliance Is a Business Essential
Understanding corporate tax rules and compliance for Indian companies is not just about meeting statutory requirements—it’s about building a strong, credible, and future-ready business. With multiple tax regimes, surcharges, audits, and regulatory filings, compliance demands planning and precision.
By keeping accurate records, meeting deadlines, and choosing the right tax structure, companies can operate confidently and focus on growth in AY 2025–26 and beyond.
