If you do not have a business entity, you cannot file your corporate tax as an individual. Businesses located within or outside the borders of this country are subject to corporate tax.
According to the Income Tax Act 1961, all business entities should file their corporate tax annually. Tax specialists or agencies with trained tax-calculating professionals can assist a company if it finds it difficult to file its own taxes. Any corporation’s corporate tax includes both its employees’ individual taxes and its overall taxes. As a corporate employer, you must take appropriate action.
What is the best way to calculate your corporate tax?
Corporate tax is calculated based on the tax slabs implemented by the Income Tax Department based on your business type. Business entities can earn revenue from different resources, and therefore, their taxes can vary from one company to another. The following basic information can assist you in calculating your corporate taxes:
There has been an announcement by the Finance Ministry of India that companies or business entities with a turnover up to 400cr will have to pay 22% corporate tax along with surcharges and cess. The Corporate Tax Calculator can show you this slab with 25.17% tax if you use financial numbers. Therefore, if you earn less than 400 crores from your company, you must pay 25.17% tax. Certain redemptions and incentives are available under sections 15BA, 15BAA, and 15BAB. There is no need to pay MAT or minimum alternate tax in this case.
The Indian Government has launched an initiative, “Make in India”, to encourage new businesses, especially manufacturing industries, to set up in the country. Finance Ministry has relaxed tax rules for new firms, and domestic companies that start their business in India after 1st Oct 2019 will have to pay 15% corporate tax on their income. However, if you reject any incentives before 31st March 2023, you will be able to file your corporate tax under this act. If you applied for the incentives before 2023, you will have to pay 107.01% instead of 15% corporate tax. However, new firms are not subject to any additional surcharges or cesses.
Foreign companies are naturally more beneficial to Indian firms. Depending on the location of the company, the Finance Ministry of India has implemented different laws for foreign companies. Tax slabs can be followed by foreign companies in two different ways. A foreign company receiving technical assistance from an Indian firm and making an agreement before 1st April 1976 must pay a corporate tax of 50%. It is still necessary to register the company’s agreement with the Government of India.
- Foreign companies with other sources of income must pay an additional 40% corporate tax plus a 2% surcharge. The company must pay corporate taxes and a 5% surcharge if the income exceeds 10 crores.
It can be daunting to calculate corporate taxes, so you need to be careful while paying them. In most cases, corporations have their own accountants who can calculate and file their corporate tax. Alternatively, if you are a Start-up and cannot afford to hire an accountant, you can use the online Corporate Tax rate Calculator.
TAKE CARE OF YOUR CORPORATE TAX IN INDIA
Financial Calculator for Corporate Taxes
The Income Tax Department’s main official website also offers online services for calculating and filling out corporate taxes. A Corporate Tax Calculator for financial numbers is available online. A variety of details can be entered, including the financial year, the taxpayer’s nature, net taxable income, surcharges, health and education cesses, and income tax relief.
The income tax section 87A applies to all taxpayers.
Certain individuals are eligible for a refund of income tax. This section offers tax relief for Indian citizens doing business in India, and individuals whose income is less than five hundred thousand rupees can receive a rebate of 12,500 on their total tax. Therefore, if you find that your corporate tax falls below 12,500, you do not have to pay anything.
Despite this, it seems impossible, since a business entity can earn more, and all corporations are required to pay their corporate taxes on time.
How to Calculate Your Corporate Tax?
You can use an online tax calculator designed for the corporate tax to calculate your taxes. Make sure you must calculate your incentives before you file your taxes. You can apply for tax relaxation under the following sections:
Under Section 115BA, 115BAA, 115BAB of the Income Tax Act, you can save your taxes. For example, if you have a manufacturing unit, you can apply for the tax relaxation under section 115BAB and pay 15% tax instead of 25% corporate tax. Similarly, companies can pay 22% corporate tax under sections 115BA and 115BAA by meeting specific criteria sketched by the income tax department.
The corporate tax calculator for financial numbers is thus easy to access. A tax specialist can tell you about the various slabs that are available. A corporate tax can be imposed based on its total income. Along with that, rigorous payment methods and additional fines must be given if one does not pay the tax on time.
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