Corporate income tax is a direct tax levied on profits or net income of companies. The tax is levied at a specific rate under the Income Tax Act 1961. The Central Government of India collects corporate tax under India's Companies Act, 2013.

In India, companies are classified into two categories:

• Domestic Companies: A domestic company is registered under India's Companies Act, 2013 and also includes a foreign-registered enterprise whose management and control are wholly owned by Indian nationals.

Foreign/Multinational Companies: A foreign company is not registered under Indian Company Law and that exercises control and management outside of India.

There are different tax slabs for corporate tax. These slabs are dependant upon various factors such as the total net profit of the company, the category of the company and when the company began operations.

In the 2019 Budget, corporate tax cuts were introduced to provide a boost to the Indian economy. Under Section 115BA, companies can opt for lower rates of 22% (for old manufacturing companies and 15% (for new manufacturing companies). If companies don't opt for these rates, older rates will be applicable. This rate cut is expected to boost the country's investment climate by leaving a larger portion of post-tax income in the hands of corporate enterprises.

To sum up, for the Current Assessment Year 2019-20, the corporate tax is as follows:

For foreign companies, the following rate follows:

In addition to this: a cess of 4% is applicable for all companies on their total tax liability. Meanwhile, surcharge at the rate of 7% and 12% will be charged for companies having net income between ₹1 crore -₹10 crores and those having above ₹10 crores of annual income, respectively. For those who opt for the newer rates, a flat surcharge of 10% will be levied.

Hence, corporate taxes play an essential role in the overall development of the nation. The growth rate for Corporate Income Tax (CIT) collections was noted to be 14.8% in the year 2018-19.