Corporate direct taxation in India is currently transitioning into the modern framework of the Income-tax Act, 2025, operating alongside historical and ongoing compliance under the Income-tax Act, 1961. Domestic and multinational corporate entities navigate evolving concessional tax regimes, dynamic deduction thresholds, Minimum Alternate Tax (MAT) calculations, and statutory timelines. Our advisory assists corporate boards, finance directors, and private limited enterprises in understanding tax positions, evaluating statutory incentives, and maintaining full compliance with Central Board of Direct Taxes (CBDT) notifications.
Concessional Corporate Regimes & Regime Selection Analysis
The introduction of Section 200 of the Income-tax Act, 2025 (formerly Section 115BAA of the Income-tax Act, 1961), providing a 22% base corporate tax rate for domestic companies, represents a pivotal choice compared to conventional tax frameworks. Evaluating the financial viability of exercising this regime requires rigorous examination of foregone incentives (such as scientific research deductions and accelerated depreciation), accumulated MAT credit balances, and long-term capital deployment plans.
- ✓Comparative modeling: Conventional tax regime with Chapter VI-A deductions vs. Section 200 of the Income-tax Act, 2025 (formerly Section 115BAA of the Income-tax Act, 1961)
- ✓Assessment of unutilized MAT credits under Section 115JAA prior to exercising the concessional regime choice
- ✓Evaluation of foregone investment allowances, additional depreciation, and sector-specific deductions
- ✓Statutory filing of prescribed electronic declaration forms within mandated due dates to exercise the regime choice
Section 200 (formerly Section 115BAA)
22% Base RateApplicable to existing and newly incorporated domestic companies subject to the statutory condition of surrendering specified tax holidays, exemptions, and accelerated allowances.
Minimum Alternate Tax (formerly Section 115JB)
15% Book Profit TaxCalculation of book profits under Ind AS / AS frameworks, tracking statutory additions and deductions, and utilization of MAT credit carry-forwards.
Statutory Disallowance Rules & Section 43B(h) MSME Compliance
Under the statutory deduction rules of the Income-tax Act, 2025 (formerly Section 43B(h) of the Income-tax Act, 1961), payments due to micro and small enterprises registered under the MSMED Act, 2006 must be settled within statutory timelines (15 days in absence of agreement, or up to 45 days under written agreement). Any delayed payment beyond the agreed period is disallowed as a business deduction in the year of accrual and allowed only upon actual disbursement. Corporate entities require robust accounts payable audits and vendor classification protocols to prevent substantial tax additions.
- ✓Vendor classification and UDYAM registration verification for micro, small, and medium suppliers
- ✓Aging schedule reconciliation of trade payables at financial year-end to verify adherence to statutory MSME payment deadlines
- ✓Reconciliation of statutory liabilities (formerly Section 43B of the Income-tax Act, 1961) including employer PF/ESI contributions before ITR due dates
- ✓Documentation of written contracts and payment voucher audit trails to support statutory expenditure deductibility
Startup Taxation & Corporate Restructuring Advisory
Following the legislative abolition of the Angel Tax provision (formerly Section 56(2)(viib) of the Income-tax Act, 1961) effective Assessment Year 2025-26, early-stage and growth enterprises operate under an unencumbered capital raising framework. In addition, eligible DPIIT-recognized startups require advisory to claim 100% profit deductions under the startup provisions of the Income-tax Act, 2025 (formerly Section 80-IAC of the Income-tax Act, 1961). For mature enterprises, corporate restructuring—including amalgamations, demergers, and slump sales (formerly Section 50B)—demands rigorous verification of tax-neutrality criteria (formerly Section 47).
Startup Deductions (formerly Section 80-IAC)
DPIIT StartupsFacilitating application filings with the Inter-Ministerial Board (IMB) and verification of eligible turnover thresholds for 3 consecutive tax holiday years.
Slump Sale & Restructuring (formerly Section 50B)
Tax NeutralityNet worth determination, Form 3CEA certification by a Chartered Accountant, and tax-neutral business transfers under statutory re-organization provisions.
