CORPORATE TAX

Subject : Economics

Context : Overall advance corporate tax stood at Rs 2,39,125 crore so far this year, down 4.9 per cent from Rs 2,51,382 crore as the first two quarters bore the brunt of the lockdown.

Concept :

• Corporate tax is the tax imposed by the Government of India on the net income or profit that corporate enterprises make from their businesses. It is a tax imposed on the net income of the company.
• Corporate Income Tax is a Direct Tax.
• The tax is imposed at a specific rate as per the provisions of the Income Tax Act, 1961.
• In most nations, the Corporate Tax is levied at a national level and can also be levied at a State or local level.
• Private and public companies registered in India under the Companies Act are liable to pay corporate tax.
• Minimum Alternate Tax (MAT) is not applicable to such companies.
• The Minimum Alternate Tax is a measure to include all companies in the income tax loop. The MAT ensures that no company with healthy finances and substantial income can avoid paying income tax, even after claiming exemptions.