CORPORATE TAX

PLANNING
UNIT-1 CORORATE TAX IN INDIA
PRESENTED BY: CS SHWETA SHAH
DEPARTMENT OF COMMERCE.

PATNA WOMEN’S COLLEGE.

TYPE OF COMPANIES [DEFINITIONS]

COMPANY

A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY INTERESTED

WIDELY HELD COMPANY

CLOSELY HELD COMPANY

INDIAN COMPANY
TYPE OF COMPANIES

DOMESTIC COMPANY

FOREIGN COMPANY

INVESTMENT COMPANY
 COMPANY
COMPANY means:

• any Indian company, or

• Any body corporate incorporated by or under the laws of a
country outside India, or
• Any institution, association or body which was assessed as a
company for any A.Y under the Income Tax Act, 1922, or
• Any institution, association or body, whether incorporated or
not and whether Indian or Non- Indian, which is declared by a
order of CBDT to be a Company.
A COMPANY IN WHICH PUBLIC ARE SUBSTANTIALLY
INTERESTED

It includes:
• A company owned by Government or RBI
• A company having Government participation
• Companies registered under section 8 of Companies Act, 2013
• A company declared by the CBDT
• Mutual benefit finance company
• A company having co-operative society participation
• A public limited company
WIDELY HELD COMPANY

It is a company in which public are

substantially interested.
CLOSELY HELD COMPANY

It is a company in which public

are not substantially interested.
INDIAN COMPANY

It means a
• A company formed and registered under any
company formed law;
and registered • A corporation established by central, state
under the or Provincial Act;
companies Act, • Any entity declared by CBDT;
• State of Jammu and Kashmir;
2013 and • In the case of any of the Union territories.
includes-
DOMESTIC COMPANY

A domestic company means an Indian company or any other

company which in respect of its income, liable to tax under the
Income Tax Act, has made the prescribed arrangements for the
declaration and payment within India, of the dividends payable
out of such income.
FOREIGN CMPANY

Foreign company
means a
company which is
not a domestic
company.
INVESTMENT COMPANY

Investment company means a company whose gross

total income consists mainly of income which is
chargeable under the heads Income from house
property, Capital gains and Income from other sources.
RESIDENTIAL STATUS OF A COMPANY

When is a Company said to be resident

in India?

A Company is said to be resident in

India in any previous year if-

(1)It is an Indian Company; or

(2)Its place of effective management,

in that year, is in India.
RESIDENTIAL STATUS OF A COMPANY

When is a A Company will (2)Its place of

(1)It is not an
Company said to be non-resident effective
Indian Company;
be non-resident in any previous management is
and
in India? year if- not in India.
EXPLANATION

For the purposes of this clause “place of effective

management” (POEM) means a place where key
management and commercial decisions that are
necessary for the conduct of the business of an
entity as a whole are, in substance made.
 RATES OF TAX FOR ASSESSMENT YEAR 2020-21

• DOMESTIC COMPANY • RATES

¾ Where it opted for section 115BAA • 22%

¾ Where it opted for section 115BAB

• 15%
¾ Where it has not opted for section 115BAA and total turnover
or gross receipt exceed 400 crore rupees. • 25%

¾ Any other domestic company

• 30%
RATES OF TAX FOR ASSESSMENT YEAR 2020-21

FOREIGN
COMPANY

On other
income- 50%
40%
SURCHARGE AND HEALTH AND EDUCATION
CESS

• SURCHARGE
¾ For domestic company
9 Total income exceeds 1 cr. but not exceeding 10 cr. Rupees. – 7%
9 Total income exceeds 10 cr.- 12%
However, the rate of surcharge in case of a company opting for taxability
under section 115BAA or section 115BA shall be 10% irrespective of amount of
total income
¾ For Foreign company
9 Total income exceeds 1 cr. – 2%
9 Total income exceeds 10 cr. – 5%
• HEALTH AND EDUCATION CESS – 4%