What is Corporate Tax?

DV Posted by: Dhruv Verma
• 25 September, 2025
3 Reply

A corporate tax is applied by the government on the profits of the company, and it is a key source of revenue. A corporation is a separate and legal entity from its shareholders. All foreign and domestic companies are required to pay tax in accordance with the Income Tax Act. Domestic companies are required to pay taxes on all their global income, whereas foreign companies only have to pay taxes on the income they earn in India.

Tags : Corporate Tax

  • Vihaan Basu 30 September, 2025

    Are there any options to save corporate tax?

    • S
      Savetaxs 01 October, 2025

      To save corporate tax, you need to follow the points given below: 

       

      • All companies should utilize all the deductions and exemptions that can be used for research and development, and help to lower the taxable income. 
      • To save corporate tax, you should invest in some of the tax savings instruments, like financial schemes, bonds, which can give you different opportunities for tax savings. 
      • Make sure you have proper tax planning with all the financial professionals to get help in corporate tax savings. 
      • Having all the updated information and records helps to make claims decisions easily and avoid unnecessary penalties. 

       

  • Uday Bhatia 29 September, 2025

    Below are the different types of corporate tax:  

     

    1. Domestic Companies Tax: It includes Pvt Ltd companies that are registered in India. All the companies under such criteria are required to pay the liable tax on the basis of their annual income. 
    2. Foreign Companies Tax: If a company operates in India but is registered outside, then these companies have to pay taxes on the income earned in India only. 
    3. Minimum Alternate Tax: The MAT is introduced, which allows all companies to pay a minimum amount of tax on their profits, and it ensures that all contribute to the tax pool for claiming deductions and exemptions. 
    4. Dividend Distribution Tax (DDT): DDT is the tax that you need to pay before the dividends are distributed. and the government receives tax on the distributed profits. 
    5. Surcharge and Cess: Corporations need to pay surcharges and cess, which are calculated as a percentage and contribute to national funds and welfare programs. 

     

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