Corporate Tax in India 2026: Rates, Surcharge & Rules Explained

The right choice depends heavily on a company's specific exemption eligibility, growth stage, and long-term tax planning strategy — this decision is generally best made with professional tax advisory input, given its largely irreversible nature.

Final Thoughts

Corporate tax in India in 2026 offers meaningful flexibility through concessional regimes like Section 115BAA and 115BAB, but choosing the right structure requires careful evaluation of a company's specific circumstances — turnover, sector, exemption eligibility, and growth trajectory. Given that regime choices are generally permanent once elected, thorough planning before incorporation or before the relevant filing deadline is essential.

To explore more detailed guidance on corporate tax rates and regime selection in India, refer to the corporate surcharge guide for complete, updated information.

Frequently Asked Questions

What is the standard corporate tax rate in India?

30% for domestic companies not opting for a concessional regime, or 25% for companies with turnover up to ₹400 crore in the relevant previous year.

What is the effective tax rate under Section 115BAA?

Approximately 25.17%, combining the 22% base rate, a flat 10% surcharge, and 4% health and education cess.

How does corporate surcharge differ between regimes?

Under Section 115BAA/115BAB, a flat 10% surcharge applies regardless of income; under standard provisions, surcharge is tiered at 7% (income above ₹1 crore) or 12% (income above ₹10 crore).

Can a company switch back to the standard tax regime after opting for Section 115BAA?

No, once a company opts for Section 115BAA, the decision is permanent and cannot be reversed.