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 the Central Board of Direct Taxes (CBDT) and filings coordinated through the Ministry of Corporate Affairs (MCA).
👉 https://www.incometax.gov.in
👉 https://www.mca.gov.in
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 taxed on a net income basis, after accounting for allowable expenses, disallowances, and deductions prescribed under Indian tax law.
Corporate tax compliance is essential not only to avoid penalties but also to ensure smooth business operations, lender confidence, and investor trust.
Corporate Tax Rates in India for FY 2024–25
India follows a structured corporate tax framework with standard and optional concessional regimes.
Standard Corporate Tax Rate
-
25% for domestic companies with annual turnover up to ₹400 crore
This rate applies to companies that do not opt for concessional regimes and satisfy the turnover condition in the prescribed base year, as notified by the CBDT.
Concessional Corporate Tax Regimes
Companies may opt for lower tax rates under specific sections of the Income Tax Act, subject to conditions.
Section 115BAA (Optional for Domestic Companies)
-
Base tax rate: 22%
-
Effective rate: 25.17% (including surcharge and cess)
Available to domestic companies that forgo certain deductions and incentives.
👉 https://www.incometax.gov.in/iec/foportal/help/section-115baa
Section 115BAB (New Manufacturing Companies)
-
Base tax rate: 15%
-
Effective rate: 17.16%
Applicable to eligible manufacturing companies incorporated after the notified date and commencing production within prescribed timelines.
👉 https://www.incometax.gov.in/iec/foportal/help/section-115bab
Surcharge and Health & Education Cess
Corporate tax liability includes surcharge and cess.
Resident Companies
-
0% surcharge: Income within basic threshold
-
7% surcharge: Income > ₹1 crore and ≤ ₹10 crore
-
12% surcharge: Income > ₹10 crore
Foreign Companies
-
2% surcharge: Income > ₹1 crore
-
5% surcharge: Income > ₹10 crore
Additionally, a 4% Health & Education Cess applies on the total tax payable.
Corporate Tax Filing Deadlines
All companies—including foreign companies—must file their income tax return electronically.
-
Due date for AY 2025–26: 31 October 2025 (for companies requiring audit)
Returns are filed via the Income Tax e-filing portal:
👉 https://www.incometax.gov.in/iec/foportal
Late filing can attract interest, penalties, and loss of carry-forward benefits.
Tax Audit and Reporting Requirements
Tax Audit Applicability
Companies exceeding prescribed turnover or income thresholds must undergo a tax audit under Section 44AB of the Income Tax Act.
Tax audits ensure:
-
Correct computation of taxable income
-
Proper disclosure of transactions
-
Compliance with accounting and tax standards
Audit reports are filed electronically within CBDT-notified timelines.
Transfer Pricing & Cross-Border Compliance
Companies involved in international transactions or specified domestic transactions must comply with transfer pricing regulations.
Key obligations include:
-
Arm’s length pricing
-
Maintenance of transfer pricing documentation
-
Filing of Form 3CEB
These provisions are critical for multinational groups and export-oriented companies.
👉 https://www.incometax.gov.in/iec/foportal/help/transfer-pricing
Corporate Compliance Under the Companies Act, 2013
Corporate tax compliance works alongside company law compliance.
Key MCA obligations include:
-
Annual financial statements (AOC-4)
-
Annual return (MGT-7 / MGT-7A)
-
Director disclosures and board compliances
All filings are made on the MCA portal:
👉 https://www.mca.gov.in/content/mca/global/en/home.html
Indirect Taxes and Other Obligations
In addition to corporate income tax, companies must comply with:
-
Goods and Services Tax (GST) under the GST law
👉 https://www.gst.gov.in -
TDS and TCS provisions under the Income Tax Act
-
Dividend taxation and withholding tax rules
Corporate tax compliance interacts with multiple laws, making coordinated planning essential.
Why Corporate Tax Compliance Matters
Non-compliance can result in:
-
Heavy penalties and interest
-
Prosecution in serious cases
-
Reputational and operational damage
Strong corporate tax compliance supports business continuity, fundraising, and regulatory trust.
Practical Tips for Corporate Tax Compliance
-
Choose the tax regime after evaluating long-term impact
-
Maintain accurate books and supporting documentation
-
Track audit and filing deadlines rigorously
-
Monitor CBDT circulars and notifications
-
Seek professional advice for complex or cross-border transactions
Proactive compliance reduces risk and improves tax efficiency.
Final Thoughts: Compliance Is a Business Essential
Understanding corporate tax rules and compliance for Indian companies is not just about meeting legal obligations—it is about building a credible, future-ready business. With multiple tax regimes, audits, and regulatory filings, compliance requires 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.
