Corporate Tax means the tax levied on corporate entities. Byword meaning corporate taxation includes direct and indirect taxation. But in common parlance corporate taxation meaning only to the income tax. In general corporate tax is 30% for domestic companies and 40% for foreign companies. In recent times there are various amendment has been proposed by finance ministry which has impacted corporate world drastically such amendments includes a reduction in tax rate for newly setup manufacturing company and reduction in the tax rate for all companies. To claim such a lower rate of taxes (22%), taxpayers have to sacrifices with certain deductions which he was claiming earlier, like 80-IA, 35AD, etc.. Further if turnover is less than 400 crore then applicable rate of tax will be 25% without sacrificing above mentioned deduction.
As corporate pays a huge amount of tax and small change in the percentage of tax will lead to heavy inflow or outflow of cash. Corporate taxation planning plays a critical role in cash flow management of corporate enterprises. Corporate taxation planning and advisory include the following aspects:
- To avoid blockage of TDS corporate can apply for lower deduction TDS certificate so that maximum cash/revenue can be kept in hand
- Buying of such assets on which additional depreciation can be claimed
- Setup of New Units in tax holiday’s locations
- Restructuring of business to avoid taxes like merger and demerger
- Incurring of revenue expenses which may lead to incremental revenue in future period
- Starting of Startup instead of expansion of current business
GST Fever has rich experience in corporate taxation and advisory and played a crucial role in various leading organizations. GST Fever has a team of a well qualified and experienced professional who has vast experience corporate tax management. With the help of GST Fever corporate tax advisory and corporate can structure their a business model in such a way that which may lead to incremental cash flows as compare to other corporate houses who is least bother about corporate taxation.