Corporate tax regimes
Section 115BAA against the old rates at your income, with what each regime gives up set out beside the difference.
Total income before applying any regime.
Which old rate applies is decided by turnover two years back — it is not a choice.
Difference in tax
₹65,72,800.00
On tax alone, Section 115BAA, 22% is the cheaper of the two you can elect.
Tax alone. What each regime gives up is set out below, and for some companies it outweighs the difference.
| Regime | Effective | Tax | More than best |
|---|---|---|---|
| Domestic, 30% | 33.384% | ₹2,67,07,200.00 | ₹65,72,800.00 |
| Section 115BAA, 22%Cheaper on tax alone | 25.168% | ₹2,01,34,400.00 | — |
| Section 115BAB, 15%Closed — shown for reference | 17.16% | ₹1,37,28,000.00 | — |
How this worksShow
The rates are the easy half
Section 115BAA is 22% with a flat 10% surcharge and 4% cess — 25.168% however much the company earns. The old rates carry a surcharge that steps with income, so the gap between the two depends on where the company sits: at eight crore it is worth over sixty lakh a year, and at eighty lakh it is 0.832 of a percentage point.
| Rule | Figure | Statutory basis |
|---|---|---|
| Old rates, 25% band | 26% / 27.82% / 29.12% | Finance Act rate schedule, Part III |
| Old rates, 30% band | 31.2% / 33.384% / 34.944% | Finance Act rate schedule, Part III |
| Section 115BAA | 25.168% | s.115BAA, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Section 115BAB — closed | 17.16% | s.115BAB, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Foreign company | 36.4% / 37.128% / 38.22% | Finance Act rate schedule, Part III |
What 115BAA gives up
This is the half a rate table cannot price, and for some companies it decides the answer. A company sitting on MAT credit loses it outright on electing — which can leave it worse off at 22% than it was at 30%, and the election cannot be undone.
| Rule | Figure | Statutory basis |
|---|---|---|
| Additional depreciation on new plant and machinery | given up | s.32(1)(iia), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Deduction for a unit in a Special Economic Zone | given up | s.10AA, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Weighted deductions for scientific research | given up | s.35(1)(ii), 35(2AA) and 35(2AB), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Investment-linked deductions for specified businesses | given up | s.35AD, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Chapter VI-A deductions, except 80JJAA, 80M and 80LA for IFSC units | given up | Chapter VI-A, Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Set-off of brought-forward loss attributable to any of the above | given up | s.115BAA(2), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| MAT stops applying — and any MAT credit in hand lapses | given up | s.115JB(5A), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| The election is irrevocable once made | given up | s.115BAA(5), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Rule | Figure | Statutory basis |
|---|---|---|
| The 15% rate applies to manufacturing income only; other income is taxed at 22% | applies | s.115BAB(2), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
| Transactions with connected persons come under the transfer pricing rules | applies | s.115BAB(6), Income-tax Act 1961; corresponding provision, Income-tax Act 2025 to be confirmed |
Two things this page will not do
It will not recommend section 115BAB. Closed. Manufacture had to commence on or before 31 March 2024, so no company can elect this now. Shown for a company already in it. A calculator that named it the cheapest would be telling a visitor they can elect something that closed before they read about it — so it is priced, shown, and left out of the comparison.
It will not offer the 25% and 30% rates as alternatives either. Which of them applies is decided by turnover two years back; it is not a choice, and treating it as one would tell a large company it can elect a rate that is not open to it.
- The comparison is on tax alone. Nothing here weighs a MAT credit, a brought-forward loss attributable to additional depreciation, or an SEZ deduction still running.
- The election is irrevocable, so it is worth modelling more than one year before making it.
- MAT stops applying under either concessional regime — which is a saving on one side and a lapsed credit on the other.
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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