Knowing the corporate tax rebates system will help you to save a lot of money if you run an Indian business. To boost investment and company development, the government grants several tax advantages. We will define what it means, how it works, and how your business might gain from this blog here.
Define a Corporate Tax Rebate
A corporate tax rebates are a decrease in the overall income tax a business must pay. The government grants it to encourage job creation, investment, and commercial activity.
Whose Claim Is It?
- Limited companies, private
- LLPs (in some circumstances)
- Startups signed under DPIIT
- Manufacturing firms
Forms of Indian Corporate Tax Rebates
- Lowering of Tax Rates for New Manufacturing Enterprises
- For businesses registered after October 1, 2019, 15% tax rate plus surcharge and cess
- Has to start manufacturing before March 31, 2024
- Not seek any other incentives
- For businesses registered after October 1, 2019, 15% tax rate plus surcharge and cess
- Reduced Corporate Tax Rates for Currently Operating Businesses
- Base rate dropped to 22% within domestic businesses
- There is no need to pay Minimum Alternate Tax (MAT) should this option be selected
- Under this no other exemption or incentive can be claimed
- Base rate dropped to 22% within domestic businesses
- Rebate in Startup Tax
- Under Section 80-IAC, startups can claim a corporate tax rebates: 100% tax rebates on profits for three out of ten years
- Must be registered with DPIIT
- Turning over should be less than ₹100 crore
- Under Section 80-IAC, startups can claim a corporate tax rebates: 100% tax rebates on profits for three out of ten years
Claiming Corporate Tax Rebates helps to lower your tax load.
- More money flow to reinvest in company
- Increases profit margins
- Promotes quicker expansion
Documents Required:
- Company PAN and TAN
- Registration records (for startups)
- Audit records
- Fileings for Income Tax Returns (ITRs)
- Production start date or proof of investment
Factors to Remember
- Once decided upon, the lower tax rate alternative cannot be changed
- If you choose the rebate program, steer clear of claiming other exemptions
- Review eligibility deadlines
Typical Errors to Prevent
- Not registering your startup correctly
- Making a bad tax slab choice
- Not meeting production start deadlines