Corporate Tax Calculator

Corporate tax rates for Tax year 2026-27 at a glance

The Income-tax Act, 2025 came into force on 1 April 2026; the rates are those of the Finance Act, 2026, First Schedule. Health and education cess of 4% is added to tax and surcharge in every row.

What section 200 takes away: SEZ-unit deduction (10AA), additional depreciation (32(1)(iia)), investment- and research-linked deductions (33AB, 33ABA, 35(1)(ii)–(iii), 35(2AA), 35(2AB), 35AD, 35CCC, 35CCD) and profit-linked deductions in Part C of Chapter VI-A other than for new employment (80JJAA) and inter-corporate dividends (80M).

Corporate tax: the questions companies ask

What is the corporate tax rate in India for tax year 2026-27?

A domestic company pays 25% if its turnover or gross receipts in tax year 2024-25 did not exceed ₹400 crore, and 30% otherwise. It can instead opt for 22% under section 200 of the Income-tax Act, 2025 (25.168% effective), and an eligible new manufacturing company can pay 15% under section 201 (17.16% effective). A foreign company pays 35%. Surcharge and 4% health and education cess are added on top.

What is section 200 of the Income-tax Act, 2025?

It is the concessional regime that was section 115BAA of the 1961 Act. A domestic company may opt to pay 22% with a flat 10% surcharge at every income level and 4% cess — 25.168% in all — and is outside minimum alternate tax. In return it gives up specified exemptions and incentives, and once exercised the option applies to every later year and cannot be withdrawn.

What is the MAT rate for tax year 2026-27?

14% of book profit, down from 15%, with surcharge and cess on top. From tax year 2026-27 MAT is a final tax: a company that pays it no longer builds up a credit to use in later years. Companies under section 200 or section 201 are outside MAT altogether.

What happens to MAT credit brought forward from earlier years?

Credit accumulated up to 31 March 2026 survives. A company that moves to the concessional regime from tax year 2026-27 can set it off against its tax, but only up to 25% of that year's tax, within the credit's 15-year life. How a company staying on the default rates uses old credit is governed by the transition rules for the year, so check it against the return.

What is the surcharge on a company and how does marginal relief work?

On the default rates a domestic company pays 7% surcharge on income above ₹1 crore and 12% above ₹10 crore; a foreign company 2% and 5%. Marginal relief means that just past each threshold, the extra tax and surcharge cannot exceed the extra income. Under sections 200 and 201 the surcharge is a flat 10% at every income level, so there is no threshold and no relief.

Should my company opt for section 200?

Only on the numbers, and only on the long view. Section 200 wins when the deductions it takes away are small; the default rates win when they are large — an SEZ unit, heavy additional depreciation, research deductions. This calculator prices both and gives the break-even: the amount of those deductions at which the two regimes cost the same. Because the option cannot be withdrawn, weigh the incentives the company expects in later years, not only this one.

Can a new manufacturing company still get the 15% rate?

No new company can now qualify. Section 201 (section 115BAB of the 1961 Act) is for a domestic company set up on or after 1 October 2019 that began manufacturing or production by 31 March 2024. Companies that met those conditions keep the 15% rate on their manufacturing income; income not derived from manufacturing is taxed at 22%.

What tax rate applies to a foreign company in India?

35% on business income such as the profit of a branch or permanent establishment, with surcharge of 2% above ₹1 crore and 5% above ₹10 crore, and 4% cess. Dividends, interest, royalties and fees for technical services usually carry lower rates under a tax treaty, which should be checked first.