Taxes
India — Tax: Corporate Tax
Domestic companies with turnover up to ₹400 crore are taxed at 25%; larger domestic companies at 30%. Concessional regimes exist: Section 115BAA lets any domestic company opt into a flat 22% rate (foregoing most exemptions), while Section 115BAB offers new manufacturing companies (incorporated after 1 October 2019, production started before 31 March 2024) an effective rate of roughly 17.16% (15% base + surcharge + cess). Foreign companies are taxed at a base rate of 35% on India-attributable business income, with surcharge and cess pushing the effective rate to roughly 36.4–38.2%. The Minimum Alternate Tax (MAT) rate was reduced from 15% to 14% effective 1 April 2026.
VerifiedProfessional tax guide — not a government sourceIncome Tax Department of India / PwC Worldwide Tax SummariesLast reviewed: 2026-07-20
Key facts
- Domestic companies: 25% (turnover ≤ ₹400 crore) or 30% (larger); Section 115BAA offers an optional flat 22% in exchange for foregoing most exemptions.
- Section 115BAB gives new manufacturing companies (incorporated after 1 Oct 2019, production started before 31 Mar 2024) an effective rate of ~17.16%.
- Foreign companies: 35% base rate on India-attributable income, ~36.4–38.2% effective after surcharge and 4% cess.
- Minimum Alternate Tax (MAT) reduced from 15% to 14% for all companies, effective 1 April 2026.
Required documents
- Certificate of incorporation
- PAN and TAN
- Audited financial statements
Common mistakes
- Assuming the concessional 22% (115BAA) or 17.16% (115BAB) rates apply automatically — both require an explicit election and forfeiture of most standard exemptions/incentives.
- Overlooking MAT liability under the standard regime when book profits exceed taxable income under normal computation.