Company income tax
Tax, surcharge, marginal relief and cess for a domestic or foreign company, under the old rates or a concessional regime.
Every other domestic company on the old rates
Total income after every deduction the regime allows.
Tax payable
₹1,66,92,000.00
| Tax at 30% | ₹1,50,00,000.00 |
|---|---|
| Surcharge at 7% | ₹10,50,000.00 |
| Cess at 4% | ₹6,42,000.00 |
| Tax payable | ₹1,66,92,000.00 |
| Effective rate | 33.384% |
| Rounded to the nearest ten rupeesSection 288B. | ₹1,66,92,000 |
How this worksShow
Four steps, in this order
Tax on total income, then surcharge on that tax, then marginal relief against the surcharge, then cess on what is left. The order matters at the third step: cess is charged on the surcharge after relief, so working it out any earlier overstates the bill.
| Rule | Figure | Statutory basis |
|---|---|---|
| Domestic, 25% — Turnover up to ₹400 crore in FY 2024-25 | 25% | Finance Act rate schedule, Part III |
| Domestic, 30% — Every other domestic company on the old rates | 30% | Finance Act rate schedule, Part III |
| Section 115BAA, 22% — Concessional rate, most exemptions given up, irrevocable | 22% | s.115BAA, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Section 115BAB, 15% — New manufacturing companies — closed | 15% | s.115BAB, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Foreign company, 35% — A company incorporated outside India | 35% | Finance Act rate schedule, Part III |
| Surcharge, domestic company | nil / 7% / 12% | Provisos to the surcharge, Finance Act |
| Health and education cess | 4% | Finance Act |
| Rounding | nearest ₹10 | ss.288A and 288B, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
Marginal relief, and why a bill can look absurd without it
Surcharge is charged on the whole tax once income passes a crore, not on the part above it. Take that literally and a company earning ₹1,00,10,000 pays ₹32,13,210 in tax and surcharge, against ₹30,00,000 for a company earning ₹1,00,00,000 — two lakh more for ten thousand rupees of income.
Marginal relief is what stops that. Tax plus surcharge is capped at the tax a company at the threshold would pay, plus every rupee of income above it: here, ₹30,10,000. The surcharge falls from ₹2,10,210 to ₹7,000 and the crossing costs exactly what was crossed.
- The cap at the ten-crore line is measured against a company paying the 7% surcharge, not against bare tax — a company at exactly ten crore is in the 7% band.
- Sections 115BAA and 115BAB carry a flat 10% surcharge at every income, so they have no threshold and no relief.
- At exactly one crore there is no surcharge at all. The bands read “exceeding”, not “at least”.
Which regime a company is in
The 25% rate depends on turnover two years back, not on this year’s. Sections 115BAA and 115BAB are elections: once made they cannot be withdrawn, and they give up most exemptions and deductions along with the MAT credit. Section 115BAB is closed — manufacture had to commence on or before 31 March 2024 — and appears here for a company already in it.
What each regime gives up is the part a rate table cannot price. The regime comparator sets them out beside the difference in tax.
Rates and thresholds as at 10 September 2026. This page is an estimate, not professional advice, and it is not a filing.
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