Corporate Tax in India: Rates, Rules & Benefits

This guide explains corporate tax in India, applicable rates, rules, filing process, and benefits and why many firms rely on income tax consultants in Hyderabad for expert assistance.

What is Corporate Tax in India?

Corporate Tax is the tax levied by the Government of India on the net income (profits) earned by companies. It applies to:

Private Limited Companies
Public Limited Companies
One Person Companies (OPC)
Foreign companies operating in India

After completing trade license registration and securing a company trade licence, businesses must comply with corporate tax rules under the Income Tax Act, 1961.

What is Meant as Income of a Company?

A company’s income for tax purposes includes earnings from various sources:

1. Business Income

Profit earned from core business operations such as manufacturing, trading, or services.

2. Income from House Property

Rental income from company-owned properties.

3. Capital Gains

Profit earned from selling assets like land, buildings, or shares.

4. Income from Other Sources

Interest income, dividends, or other miscellaneous earnings.

👉 After adding all income sources, allowable expenses and deductions are subtracted to arrive at taxable income. Professional income tax consultants in Hyderabad often help companies structure deductions properly.

Tax Rates Applicable to Companies in India

Corporate tax rates depend on the type of company and the tax regime chosen.

🏢 Domestic Companies

Additional Charges:

• Surcharge: 7%–12%
  
  

• Health & Education Cess: 4%
  
  

🌍 Foreign Companies

Rules Governing Corporate Tax

• Companies must maintain proper books of accounts
  
  

• Tax audit is mandatory if turnover crosses prescribed limits
  
  

• Advance tax must be paid in installments
  
  

• TDS must be deducted where applicable
  
  

• Losses can be carried forward
  
  

Companies handling trade license registration and understanding trade licence documents required should align statutory registrations with financial compliance.

Everything About Filing Income Tax Return (ITR) for Companies

All companies, even if they have no profit, must file an income tax return. Many businesses depend on income tax consultants in Hyderabad to avoid filing errors.

ITR Form for Companies

• ITR-6 – For most companies
  
  

• ITR-7 – For certain exempt entities
  
  

Due Date

Generally 31st October (if audit required).

Documents Required

• Financial statements
  
  

• Audit report
  
  

• PAN
  
  

• TDS/TCS details
  
  

• Bank statements
  
  

Keeping trade licence documents required and financial records updated ensures smooth compliance.

Steps to File

1. Prepare financial statements
   
   

2. Calculate taxable income
   
   

3. Pay self-assessment tax
   
   

4. File return online
   
   

5. Verify using DSC
   
   

Benefits of Paying Corporate Tax Properly

✔ Legal compliance and avoidance of penalties
✔ Better financial credibility for loans & investors
✔ Eligibility for government schemes
✔ Ability to carry forward losses
✔ Smooth business operations

Businesses that maintain updated company trade licence records and proper tax filings face fewer legal complications.

Conclusion

Understanding corporate tax in India is essential for every company. Choosing the right tax regime, staying compliant with regulations, and filing returns on time are key to maintaining financial stability and long-term business growth. If you are a business owner needing help with corporate taxation, trade license registration, or understanding trade licence documents required, professional income tax consultants in Hyderabad at Sri Balaji Tax Services can manage your compliance efficiently — so you can focus on growing your business.

Frequently Asked Questions (FAQs)

1. Is corporate tax different from income tax?
Yes, corporate tax applies specifically to companies.

2. Do loss-making companies need to file returns?
Yes, filing is mandatory even after trade license registration.

3. What is Minimum Alternate Tax (MAT)?
MAT ensures companies pay a minimum tax.

4. Can a company reduce its corporate tax legally?
Yes, with proper planning and guidance from income tax consultants in Hyderabad.

5. What happens if a company fails to file ITR?
Penalties, interest, and legal consequences.

6. Is advance tax compulsory for companies?
Yes, if tax liability exceeds the threshold.