Tax rate Co.

The corporate tax landscape in India for the Assessment Year (AY) 2026-27 is structured around different regimes depending on the company's status, turnover, and whether it opts for concessional tax rates.

Corporate Tax Rates for AY 2026-27

Key Components Explained

• Base Rate: The flat percentage levied on taxable income.

• Surcharge: Applicable based on the total income level:

  • Domestic Companies: 0% (up to ₹1 Cr), 7% (₹1–10 Cr), and 12% (> ₹10 Cr).

  • Concessional Regimes (115BAA/BAB): Capped at 10% regardless of income level.

  • Foreign Companies: 0% (up to ₹1 Cr), 2% (₹1–10 Cr), and 5% (> ₹10 Cr).

• Health and Education Cess: A flat 4% is levied on the total amount of income tax plus the surcharge.

Important Notes

• Regime Choice: Companies opting for the concessional regimes (Sections 115BAA or 115BAB) must forgo most tax deductions and exemptions. Once exercised, this choice is generally irrevocable.

• Minimum Alternate Tax (MAT): Companies under the "Normal Provisions" may be subject to MAT if their regular tax liability falls below 15% of their book profit. Those opting for concessional regimes under Sections 115BAA or 115BAB are exempt from MAT.

• Income Tax Act 2025: Note that the government implemented the Income Tax Act, 2025, which became effective on April 1, 2026, aimed at simplifying the existing framework, reducing the number of sections, and streamlining compliance procedures.

Summary: For the 2026-27 assessment year, domestic companies generally face a base tax rate of 25% (if turnover ≤ ₹400 Cr) or 30% (if > ₹400 Cr) under normal provisions. Concessional regimes under Section 115BAA (22%) and Section 115BAB (15%) are available for companies that surrender specific deductions. Foreign companies are taxed at a base rate of 35%. All rates are subject to applicable surcharges and a 4% health and education cess.