Corporate Tax Planning#
Corporate Tax Rates#
| Type of Company | Tax Rate |
|---|---|
| Domestic company | 25% (up to ₹400 crore turnover) |
| Other domestic companies | 30% |
| Foreign companies | 40% |
| Banking companies | 30% |
Tax Planning Strategies#
1. Business Structure
- Optimal entity selection
- Holding company structure
- Subsidiary arrangements
2. Capital Structure
- Debt vs equity
- Interest deduction
- Dividend planning
3. Expense Planning
- Timing of expenses
- Capital vs revenue
- Depreciation optimization
4. Incentive Utilization
- Startup benefits
- Export incentives
- R&D credits
Deductions Available#
- Depreciation
- Business losses carry forward
- Donations (80G)
- CSR expenses (some)
- Professional tax
Transfer Pricing#
- Arm's length pricing
- Documentation
- Advance pricing agreements
- Compliant with OECD guidelines
Minimum Alternate Tax (MAT)#
- 15% of book profits
- Credit available for 15 years
- Startup exemptions
Compliance#
- Tax returns (ITR-6)
- Transfer pricing documentation
- Advance tax payments
- Audit requirements