Corporate Tax

Corporate tax — also called company tax or corporation tax — is a direct tax levied by the government on the net profits (taxable income) earned by companies and corporate entities during a financial year. In India, corporate tax is governed by the Income Tax Act, 1961 and administered by the Central Board of Direct Taxes (CBDT). Following the landmark 2019 tax reform under Section 115BAA, domestic companies can opt for a concessional corporate tax rate of 22% (effective rate of approximately 25.17% including surcharge and cess), while new manufacturing companies set up after October 2019 can opt for an even lower 15% rate (effective 17.01%). Companies not opting for the concessional regime are taxed at 30% (higher effective rate with surcharge). For equity analysts and investors on Ventura Securities, the effective tax rate is a critical component of after-tax earnings (EPS) estimation, and changes in corporate tax policy — including rate cuts, minimum alternate tax (MAT) adjustments, and deduction eligibility — have direct, material implications for corporate profitability forecasts, sector valuation re-ratings, and the comparative attractiveness of equity vs debt investments.