💰 What is the Tax Rate for a Private Limited Company in India? [FY 2024–25 Guide]

💰 What is the Tax Rate for a Private Limited Company in India? [FY 2024–25 Guide]

💰 What is the Tax Rate for a Private Limited Company in India? [FY 2024–25 Guide]
Starting a Private Limited Company (Pvt Ltd) in India comes with multiple benefits—limited liability, separate legal identity, better funding options—but it also brings certain tax obligations. If you’re planning to register a Pvt Ltd or already running one, you might be wondering:
“What is the current tax rate applicable to Pvt Ltd companies in India?”
In this blog, we explain the corporate tax rate for Private Limited Companies, including normal tax, special reduced tax under Section 115BAA, surcharge, cess, MAT, & the latest updates for FY 2024–25.  “

📌 Overview: Corporate Tax for Pvt Ltd Companies
A Private Limited Company registered in lndia is taxed as a separate legal entity. The Income Tax Act, 1961 prescribes various tax rates based on the type of company, turnover, & whether the company opts for concessional tax regimes.
There are two main tax regimes available to domestic companies:
1.    Standard Tax Regime
2.    Concessional Tax Regime under Section 115BAA

📊 Tax Rates for Pvt Ltd Companies – FY 2024–25 (AY 2025–26)

✅ Most Pvt Ltd companies now opt for Section 115BAA, as it offers the lowest effective tax rate of 25.17% with no MAT liability.

🔍 Understanding Section 115BAA – Concessional Tax Regime
Introduced by the Taxation Laws (Amendment) Act, 2019, Section 115BAA allows domestic companies to pay tax at 22% (plus applicable surcharge & cess) without claiming certain exemptions & deductions.
✅ Benefits:
•    Lower tax burden (effective rate 25.17%)
•    No Minimum Alternate Tax (MAT)
•    Fewer compliance hassles
❌ Limitations:
•    Cannot claim deductions like:
o    Additional depreciation
o    SEZ deductions
o    80IA to 80RRB deductions
•    Once opted, cannot switch back
📌 Recommended for most startups, IT firms, & service-based Pvt Ltd companies not claiming special deductions.

💡 What is MAT (Minimum Alternate Tax)?
Under the standard tax regime, companies that have taxable income below book profits must still pay a Minimum Alternate Tax of 15% on book profits, plus surcharge & cess (effective ~17.47%).
However, MAT is not applicable if you opt for Section 115BAA.

🧾 Tax Surcharge & Cess for Pvt Ltd Companies
•    Surcharge:
o    7% if income exceeds ₹1 crore
o    12% if income exceeds ₹10 crore
•    Health & Education Cess: 4% on total tax + surcharge
✅ Under 115BAA, a flat 10% surcharge is applied, regardless of income level.

🧮 Example Calculation (Under Section 115BAA)
Let’s say your Pvt Ltd company has a taxable income of ₹50 lakhs:
•    Base Tax = ₹50,00,000 × 22% = ₹11,00,000
•    Surcharge @10% = ₹1,10,000
•    Subtotal = ₹12,10,000
•    Cess @4% = ₹48,400
•    Total Tax Payable = ₹12,58,400
📌 Effective tax rate = 25.17%

💼 Income Tax Return Filing for Pvt Ltd Companies
All Pvt Ltd companies must file Form ITR-6 before 31st October of the relevant Assessment Year (if audit not required) or 30th November (if audit is applicable).
Mandatory compliance includes:
•    Bookkeeping & financial statement preparation
•    Tax audit (if turnover > ₹1 crore)
•    Filing of Tax Audit Report (Form 3CD & 3CA/3CB)
•    TDS returns & GST returns (if applicable)
✅ We help Pvt Ltd companies with tax planning, audit coordination, & complete filing solutions.

📋 Documents Required for Tax Filing
•    PAN of company
•    Profit & Loss statement & balance sheet
•    Tax deduction details (TDS/TCS)
•    Audit reports (if applicable)
•    Director details & DSC (Digital Signature)

🏁 Final Thoughts
A Private Limited Company in India is subject to corporate income tax, but thanks to simplified regimes like Section 115BAA, companies can now enjoy lower tax rates & reduced compliance burdens.
✅ The current effective tax rate for most Pvt Ltd companies opting for 115BAA is 25.17%.
Choosing the right tax regime can save lakhs in taxes.
Let our expert CA team assist you in selecting the best option, ensuring accurate compliance, & maximizing tax savings.