The rates of income tax, surcharge, HEC and MAT, applicable in the case of domestic companies in India in respect of AY 2023-24, are as follows:
Income Tax Rates
Income Tax Rate for Domestic Companies and Indian Companies in AY 2023-24 is 25% if the turnover is up to Rs 400 crore and 30% in other cases where turnover is above Rs 400 crore. Further, domestic companies covered under Sections 115BA, 115BAA, and 115B have lower tax rates. The tax rates applicable for domestic companies are summarised as under:
|Categories/ Conditions for differential tax rates||Income Tax Rate|
|If the turnover or gross receipts of a domestic company did not exceed Rs 400 crores in the previous year 2020-21||25%|
|Domestic companies covered u/s 115BA||25%|
|Domestic companies covered u/s 115BAA||22%|
|Domestic companies covered u/s 115BAB||15%|
|All other domestic companies||30%|
It may be noted that “domestic company” means an Indian company or any other company that has made the prescribed arrangements for the declaration and payment within India of dividends (including dividends on preference shares) out of its income liable to income tax under the Income Tax Act.
Income tax liability computed (including u/s 111A, 112, or 112A) in the case of, a domestic company shall be subject to a surcharge of 7% where total income is above Rs 1 crore but is up to Rs 10 crore, and surcharge of 12% where total income exceeds Rs 10 crore.
However, in the case of companies covered u/s 115BAA and 115BAB, a surcharge of flat 10% shall be applicable.
In all cases, the amount of the surcharge is subject to rules about marginal relief, if they apply.
Health & Education Cess (HEC) Rates
The aggregate amount of income tax and surcharge shall be subject to health and education taxes (HEC) at 4% in the case of domestic companies.
Minimum Alternate Tax (MAT) Rates
Where the normal tax liability of the domestic company is less than 15% of the book profits, the minimum alternate tax (MAT) shall be applicable at the rate of 15% of the book profits, except in the case of companies covered u/s 115BAA and 115BAB. Besides, the surcharge and health and education cess shall be applicable, as above.
For a company that is part of an IFSC and gets all of its income in convertible foreign exchange (CFE), the MAT rate is 9%.
Domestic companies opting for concessional taxation rates u/s 115BAA and 115BAB are exempt from MAT; however, these companies are not eligible to get certain deductions, i.e., u/s 80IA, 80IAB, 80IAC, 80IB, etc., except under 80JJAA and 80M.