CORPORATE TAX (Syllabus: GS Paper 3 - Economy

Context: Collections from the corporation tax declined nearly 14 percent yearonyear (YoY) to ? 1.38 trillion in the first quarter of this financial year (Q1FY24), from ? 1.61 trillion, despite signs of economic recovery.

Corporate tax

• A corporate tax, also called corporation tax or company tax, is a direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities.
• It is levied on both the public and private companies registered under the Companies Act of 2013.
• The rate at which the tax is imposed is as per the provisions of the Income Tax Act, 1961.
• The Minimum Alternate Tax (MAT) does not apply to such companies.
• It is imposed on the net income or profit that corporate enterprises make from their businesses.