Tax and compliance in India

Snapshot

A business in India deals with income tax on profit and Goods and Services Tax on its supplies. A domestic company can elect a concessional 22 percent base rate under section 115BAA, about 25.17 percent with surcharge and cess, while new manufacturing companies may elect 15 percent under section 115BAB. The GST 2.0 reform from 22 September 2025 moved most supplies to two main slabs of 5 percent and 18 percent, with a 40 percent rate for selected luxury and sin goods.

Corporate tax, normal regime: 25 percent within the turnover threshold or 30 percent, before surcharge and cess
Concessional regime: 22 percent base under section 115BAA, about 25.17 percent all in
Manufacturing regime: 15 percent base under section 115BAB, about 17.16 percent all in
GST after GST 2.0: Two main slabs of 5 and 18 percent, plus 40 percent for luxury and sin goods

Fees and features as of 5 March 2026Last reviewed 5 March 2026

General information, not financial, legal, or tax advice. Verify current terms and eligibility with the provider before applying.

As of 5 March 2026, a business in India deals with income tax on profit and Goods and Services Tax on its supplies. A domestic company can be taxed under the normal regime at 25 or 30 percent, or elect a concessional 22 percent base rate under section 115BAA, which works out to about 25.17 percent with the surcharge and cess. New manufacturing companies may elect 15 percent under section 115BAB. The GST 2.0 reform from 22 September 2025 moved most supplies to two main slabs of 5 and 18 percent, with a 40 percent rate for selected luxury and sin goods. This page is general information, not tax advice. Verify your position with a qualified adviser.

How business tax works in India

A business in India deals with income tax on profit and, where it applies, Goods and Services Tax on its supplies. As of 5 March 2026, a domestic company can be taxed under the normal regime at 25 percent where turnover is within the prescribed threshold or 30 percent otherwise, before surcharge and cess. Many companies instead elect the concessional regime under section 115BAA, which sets a base rate of 22 percent and works out to about 25.17 percent once the 10 percent surcharge and the 4 percent health and education cess are added, in exchange for giving up certain deductions. The income tax is administered by the Income Tax Department. Verify your position with a qualified adviser.

The manufacturing rate

A new domestic manufacturing company that meets the conditions can elect a base rate of 15 percent under section 115BAB, which works out to about 17.16 percent with the 10 percent surcharge and 4 percent cess. The conditions are specific, including dates of incorporation and the start of production, so confirm eligibility with a qualified adviser. As of 5 March 2026.

Goods and Services Tax after GST 2.0

The GST 2.0 reform took effect on 22 September 2025 and simplified the rate structure. Most goods and services now fall under two main slabs of 5 percent and 18 percent, with a separate 40 percent rate for selected luxury and sin goods such as tobacco. The earlier 12 percent and 28 percent slabs were largely removed, with most items moving down. Registration is required where turnover crosses the threshold or specific rules apply, and registered businesses file periodic returns. Confirm the rate for your supplies and your registration duty with the GST schedule or a qualified adviser. As of 5 March 2026.

Where banking fits in

Tax does not change which bank you use, but clean records make both filing and bank reviews easier. Keeping business funds in a dedicated current account, retaining statements, and being able to show the source of funds supports compliance on both sides. The bank does not file your returns, and this page does not replace advice from a qualified professional. As of 5 March 2026.

What to check on tax and compliance

When reviewing tax and compliance for an Indian business, check these points, as of 5 March 2026. Verify with a qualified adviser

Which corporate tax regime suits your company, including whether to elect section 115BAA or section 115BAB.
Whether you must register for GST, and which slab applies to your supplies after the GST 2.0 reform.
Your filing deadlines for income tax, GST, and any tax deducted at source obligations.

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Questions about tax and compliance in India

What is the corporate tax rate for a company in India?

A domestic company can be taxed under the normal regime at 25 percent where turnover is within the threshold or 30 percent otherwise, or it can elect a concessional base rate of 22 percent under section 115BAA, which works out to about 25.17 percent once the 10 percent surcharge and 4 percent cess are added. New manufacturing companies may elect 15 percent under section 115BAB. Verify your position with a qualified adviser, as of 5 March 2026.

What are the GST rates in India after the 2025 reform?

From 22 September 2025, the GST 2.0 reform moved most goods and services to two main slabs of 5 percent and 18 percent, with a separate 40 percent rate for selected luxury and sin goods. The earlier 12 percent and 28 percent slabs were largely removed. Confirm the rate for your supplies with the GST schedule or a qualified adviser, as of 5 March 2026.

Does a business need to register for GST in India?

GST registration is required where turnover crosses the registration threshold or where specific rules apply, for example interstate supply or ecommerce. The thresholds are higher for goods than for services and differ for special category states. Confirm whether you must register, as of 5 March 2026.

Does the bank handle my tax filings in India?

No. The bank holds the account and provides statements, but it does not file your income tax or GST returns. Keeping business funds in a dedicated account and retaining records supports compliance. This page is general information, not tax advice, so verify your position with a qualified adviser, as of 5 March 2026.

Fees, features, and eligibility change and vary by region. This page was last reviewed on 5 March 2026. Confirm current terms with the provider before applying.