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Classification and Tax Incidence on Companies - Coggle Diagram
Classification and Tax Incidence on
Companies
BACKGROUND & TYPES OF COMPANIES
Indian Company
Section 2(26) of the Income Tax Act, 1961
Domestic Company
Section 2(22A) of the Income Tax Act, 1961
Under Rule 27 of Income tax rules
Foreign Company
Section 2(23A) of the Income Tax Act
Company in which public are substantially interested (A widely-held company)
Section 2(18) of the Income Tax
A company owned by Govt./ RBI
Section 8 company
A company having no share capital declared by CBDT
Nidhi/ Mutual Benefit Society
A company owned by co-operative Society
Listed company
Public company owned by Govt. and/ or public limited company
TAX INCIDENCE UNDER INCOME TAX ACT, 1961
According to Section 6(3) of the Act
CIT v. Shaw Wallace & Co. Ltd.
(1981) 132 ITR 466]
Under Section 5(2) of the Act, the total income of any previous year of non-resident company would consist
of:
Income received or deemed to be received in India in the previous year by or on behalf of such company
Income which accrues or arises or is deemed to accrue or arise to it in India during the previous year
Corporate Taxation Rates
Domestic
Companies
• Taxable @ 30%
• If the turnover is <= INR 50 Cr.; taxable @ 25%
• Surcharge
• 7% if the Total Income is > INR 1 Cr.
• 12% if the Total Income is > INR 10 Cr.
Foreign
Companies
• Taxable @ 40%
• Surcharge
• 2% if the Total Income is > INR 1 Cr.
• 5% if the Total Income is > INR 10 Cr.
MINIMUM ALTERNATE TAX (MAT)
substituted by Section 115JB
Losses and unabsorbed Depreciation allowed to be carried forward (Section 115JB (3))
Report from a Chartered Accountant to be submitted [Section 115JB (4)]
All other provisions to be applicable as usual [Section 115JB (5)]
Applicability of Provisions to SEZ enterprises and SEZ developers
Rate of MAT in case of a unit located in International Financial Service Centre
Applicability of provisions of MAT applicable to foreign companies
Whether Assessing officer has the power to examine correctness of net profit shown in profit
and loss Account [Apollo Tyres Ltd. V. CIT (2002) 255 ITR 273 (SC)]
provisions of Part II of
Schedule VI of the Companies Act, 1956
Detailed Discussion of Steps to Calulate Book Profit is as Under
Net profit (before other comprehensive income) as shown in profit and loss account (prepared
in accordance with provisions of Part II and III of Schedule VI to Companies Act, 1956
MAT CREDIT [SECTION 115JAA]
DIVIDEND DISTRIBUTION TAX [SECTION 115-O]
the amount of dividend, if any paid to any person for, or on behalf of, the New Pension System Trust
referred to in Section 10(44).
any amount declared, distributed or paid by the specified domestic company by way of dividends
(whether interim or otherwise) to a business trust out of its current income on or after the specified date
Taxability of Dividend income of an Indian company from a Specified foreign company
[Section 115BBD]
CARBON CREDIT [SECTION 115BG]
New section inserted vide Finance
Act, 2017 w.e.f. AY 18-19]
BUY BACK OF SHARES LISTED ON A RECOGNISED STOCK EXCHANGE IN INDIA
BUYBACK OF UNLISTED SHARES
Buy Back of Unlisted Shares in Detail with Case Studies
Section 115QA
Section 115QB
Section 115QC
TAX ON INCOME DISTRIBUTED BY SPECIFIED COMPANY OR MUTUAL FUND
Section 115R (2)
MMMF)
• 25% if the distribution is to Individual / HUF
• 30% if the distribution is to any other person
Fund other than
MMMF
• 25% if the distribution is to Individual / HUF
• 30% if the distribution is to any other person
Infrastructure Debt Fund
5% if the distribution is to a Non-Corporate
Non Resident or a Foreign Company
Section 115R (2A)
Section 115R (3)
Section 115S
Section 115T
EQUALISATION LEVY
TAXATION ASPECTS RELATED TO CONVERSION OF COMPANY INTO AN LLP
provisions of section 56 or section 57
of the Limited Liability Partnership Act, 2008
TAX LIABILITY OF COMPANIES IN THE EVENT OF LIQUIDATION
Section 178
Section 220
Section 139
TAXATION OF SHARE PREMIUM
Rule 11UA
Quoted Shares & Securities
Unquoted Shares & Securities
Section 2(1B) of the Income Tax Act, 1961
Business Losses & Unabsorbed Depreciation
Capital Gains
Under Section 47(vi) and (vii) transfer
Preliminary Expenses
preliminary expenses under section 35D
Capital Expenditure on Scientific Research & Know-how
provision of section 35
Expenditure on Amalgamation
Section 35DD