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Tax Chart For Domestic Private Limited Company Introduction Understanding tax rates and how they work is important for everyone. Domestic company means a company that does not get any foreign investment. A tax chart for a domestic Private Limited Company is simple to grasp. Just like individuals pay income tax on their earnings, companies also have to pay tax based on pre-defined rates in the Income Tax Act. Taxes are an essential part of running a Private Limited Company, and understanding the tax rates is important for compliance and financial planning. In this blog, we will explain the tax structure, rates, and other key details in a simple and clear manner. How Domestic Private Limited Companies are taxed in India? Domestic Private Limited Companies in India pay 25% tax if their turnover is up to ₹400 crore; otherwise, it's 30%. They can opt for a lower 22% tax under Section 115BAA with conditions. A surcharge of 7% or 12% applies if income exceeds ₹1 crore or ₹10 crore, plus a 4% health and education cess. MAT at 15% may apply if regular tax is too low. Dividends are now taxed in the hands of shareholders instead of the company. It is the rough view how tax private limited companies are taxed in India. Corporate Income Tax Rate FY 2025-2026 Below are the Income Tax Rates applicable to Private Limited Companies in India for Financial Year 2024-25 (Assessment Year 2025-26). This represents the tax slabs for companies based on their turnover. Tax Rate for Companies with Turnover Above ₹400 Crore Income Slab Tax Rate Up to ₹1 Crore 30% Above ₹1 Crore but up to ₹10 Crore ₹3,00,000 + 30% Above ₹10 Crore ₹3,00,00,000 + 30% Tax Rate for Companies with Turnover Up to ₹400 Crore Net Income Slab (Gross Taxable Income Deductions) Applicable Tax Rate Up to ₹1 Crore 25% Above ₹1 Crore but up to ₹10 Crore ₹25,00,000 + 25% Above ₹10 Crore ₹2,50,00,000 + 25% Apart from the corporate tax, Private Limited Companies are also liable to pay additional charges, which include a surcharge, education cess, and secondary & higher education cess. We provide expert services to register pvt ltd company and Pvt ltd annual filing, simplifying the process while ensuring compliance with all legal requirements. Types of tax for Domestic Private Limited Companies (AY 2025-26) Standard tax rate If your company made up to ₹400 crore last year, you pay 25% tax on your profits. If you made more than ₹400 crore, the tax rate is 30%. There's also a special 22% tax rate option (under Section 115BAA). If you pick this, you can't use some of the usual tax breaks. Surcharge on Tax If your profit is more than ₹1 crore but less than ₹10 crore, there's a 7% extra charge on the tax. If your profit is over ₹10 crore, that extra charge goes up to 12%. Health and Education Cess On top of the tax and any extra charges, you'll also pay a 4% fee for health and education. Minimum Alternate Tax Sometimes, companies use tax breaks and end up paying very little tax. To make sure everyone pays something, there's a thing called MAT (Minimum Alternate Tax). If your tax is really low, you'll have to pay MAT, which is 15% of your book profits, plus the extra charges and the health and education fee. If you choose the 22% tax rate, you don't have to worry about MAT. Tax on dividends In the past, companies paid tax when they gave out dividends (a share of the profits). That's changed. Now, when you get dividends as a shareholder, you pay tax on them based on your own income tax bracket. Essentially, companies need to keep these rules in mind to manage their taxes properly and stay within the law. Goods and service tax It applies to all types of goods and services Depending on the category of goods and services, there are various tax rates; 5%, 12%, 18%, and 28% for specific goods and services. TDS and TCS TDS means Tax Deduct at Source and TCS means Tax Collected at Source. Companies must deduct Tax Deducted at Source (TDS) on payments such as salaries, rent, professional fees, and contractor charges. On the other hand, Tax Collected at Source (TCS) is applicable to specific transactions, including the sale of scrap, minerals, and motor vehicles. Private Limited Companies must deduct Tax Deducted at Source (TDS) at prescribed rates for specified payments and file quarterly TDS returns. Failure to comply with these requirements may lead to penalties and interest charges. Conclusion Understanding the tax structure of a Domestic Private Limited Company is essential for compliance and financial planning. Companies are taxed at 25% or 30%, with an optional 22% rate under Section 115BAA, along with surcharge, cess, and MAT. Comparing taxation helps businesses choose the right structure. Staying informed ensures proper tax management and compliance with the Income Tax Act. Suggested Read : Statutory Audit For Pvt Ltd Company Enterprises and Pvt Ltd Companies ROC Compliance Form For Pvt Ltd Company Advantages and disadvantages of Pvt Ltd Company Monthly Compliance Requirements for Pvt Ltd Companies FAQ Private Limited Companies pay 25% tax if their turnover is up to ₹400 crore and 30% tax if it exceeds ₹400 crore. Companies opting for Section 115BAA can pay a lower 22% tax rate with conditions.Yes, MAT at 15% of book profits applies if the company’s tax liability is too low, except for companies opting for the 22% concessional tax rate under Section 115BAA.No, the government has abolished the Dividend Distribution Tax (DDT). Now, shareholders pay tax on dividends according to their income tax slabs.Private Limited Companies have varying tax rates (25% or 30%), while LLPs pay a flat 30% tax. Additionally, LLPs do not pay dividend tax, while Pvt Ltd Companies distribute dividends taxed in shareholders' hands.Companies must also pay a surcharge (7% or 12% depending on income) and a 4% health and education cess on the total tax amount.

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