Taxation - Corporate Tax
Introduction| Corporate Taxable Income|Assessment and rate of tax|Minimum Alternative Tax (MAT)|Depreciation, set-off, carry forward|Tax on Distributed Profits|Rebates and
allowances for the corporate sector|Tax
Holiday in Free Trade Zones
Corporate Tax - Introduction
| For the Assessment Year 2007-08 |
| Description | Existing Rate* (%) | Proposed Rate* (%) | Difference + - = (%) |
| Domestic Company | |||
| Regular Tax | 33.6 | 33.9** | +0.33 |
| MAT | 11.22 (of book profits) |
11.33 (of book profits) |
+0.11 |
| DDT | 14.025 | 16.995 | +2.97 |
| Foreign Company | |||
| Regular Tax | 41.82 | 42.33# | 0.41 |
**If the income is equal or less than Rs 10 million, it is 30.9%.
#If the income is equal or less than Rs 10 million, it is 41.2%.
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A company has been defined as a juristic person having an independent and separate legal entity from its shareholders. Income of the company is computed and assessed separately in the hands of the company. however the income of the company which is distributed to its shareholders as dividend is assessed in their individual hands. Such distribution of income is not treated as an expenditure in the hands of company, the income so distributed is an appropriation of the profits of the company.
Residence of a company :
A company is said to be a resident in India during the relevant previous year if:
- it is an Indian company
- if it is not an Indian company then, the control and the management of its affairs is situated wholly in India