Income Tax for Domestic Company: Tax Slabs, Forms & Deductions – FY 2025-26

Income tax filing is mandatory for domestic companies in India. Depending on turnover, tax regime, deductions claimed, and the nature of business, a domestic company may be taxed at different specified rates and may also be subject to surcharge, cess, and additional compliance requirements.

This guide explains the applicable tax rates, deductions, return forms, and filing requirements for domestic companies under the 2026 framework.

What is the Importance of Filing ITR for a Domestic Company

• Filing taxes is a legal obligation for domestic companies in India. 
• It helps maintain financial transparency and builds credibility with investors, lenders, and regulatory authorities. 
• Companies that regularly file taxes can carry forward losses to offset future profits, reducing their tax liability. 
• It strengthens corporate governance and enhances a company’s market reputation. 

Income Tax Rate for Domestic Companies in India (Tax Year 2026-27)

Here are the details of the domestic company tax slab in India!

Condition	Income Tax Rate (excluding surcharge and cess)
Turnover or Gross Receipts in FY 2020-21 up to ₹400 crore	25%
Opted for Section 115BA	25%
Opted for Section 115BAA	22%
Opted for Section 115BAB	15%
Any other Domestic Company	30%

Domestic companies are not taxed through slab progression like individual taxpayers. Instead, the applicable rate depends on turnover thresholds or the concessional regime chosen under the law.

Surcharge and Other Charges in Company Income Tax

• Surcharge: 7% where total income exceeds ₹1 crore but does not exceed ₹10 crore
• Surcharge: 12% where total income exceeds ₹10 crore
• Surcharge for 115BAA / 115BAB companies: 10%, irrespective of total income
• Marginal relief: available where surcharge exceeds the additional income over the threshold
• Health and education cess: 4% on tax plus surcharge
• MAT: generally 15% of book profit, plus surcharge and cess, where applicable
• MAT for certain IFSC companies: 9% in specified cases
• Companies opting for section 115BAA or section 115BAB are not liable to MAT

Key Deductions and Tax Benefits for Domestic Companies

A domestic company in India can claim tax deductions under various sections, such as 80JJAA (new employment generation), 80G (donations), and 35 (R&D expenses). 

1. Donations (Section 80G & 80GGA): Companies can claim deductions on donations to charitable institutions, scientific research, or rural development (up to 100%, subject to limits). Cash donations above ₹2,000 are not eligible.

2. Political Contributions (Section 80GGB): Any contribution to political parties or electoral trusts is fully deductible if paid through non-cash modes.

3. Infrastructure & SEZ (Sections 80IA, 80IAB, 80IC, 80IE): Businesses in infrastructure, SEZs, and North-Eastern states can claim 100% profit deductions for a specific period.

4. Startups & Employment Benefits (Sections 80IAC, 80JJAA): Eligible startups get 100% tax exemption for 3 out of 10 years, while companies hiring new employees can deduct 30% of their additional employee cost for 3 years.

5. Inter-Corporate Dividends (Section 80M): A domestic company can claim deductions on dividends received from other companies if they are redistributed to shareholders before the ITR filing due date.

Tax-saving options for a domestic company are numerous.

Section	Deduction Details
80G	Donations to charitable funds (50%-100% deduction)
80GGA	Donations for scientific research & rural development
80GGB	Contributions to political parties (non-cash only)
80IA	100% deduction for 10 years (Infrastructure & Power)
80IAB	100% deduction for 10 years (Special Economic Zones)
80IAC	100% deduction for 3 years (Start-ups)
80IB	100% deduction for 5-10 years (Manufacturing & Food Processing)
80IBA	100% deduction (Affordable Housing Projects)
80IC	100% deduction for 5 years, then 25% (30% for companies) (Himachal, Sikkim, North-East)
80IE	100% deduction for 10 years (Industries in North-East)
80JJA	100% deduction for 5 years (Biodegradable Waste Processing)
80JJAA	30% deduction on additional employee costs for 3 years
80LA	100% deduction for 5 years, then 50% for the next 5 years (IFSC & Offshore Banking)
80M	Deduction for inter-corporate dividends distributed
80PA	100% deduction for Producer Companies (AY 2019-20 to 2025-26, turnover < ₹100 Cr)

Which ITR Form Applies to a Domestic Company?

In most cases, domestic companies file either ITR-6 or ITR-7, depending on the nature of the entity and whether an exemption under section 11 is claimed.

ITR Form	Applicable To	When to Use
ITR-6	Domestic companies other than those claiming exemption under section 11	For companies with taxable business or professional income
ITR-7	Companies and institutions required to file under sections 139(4A), 139(4B), 139(4C), or 139(4D)	Where income is reported under the specific categories covered by these provisions

1. ITR-6

This form applies to all companies except those claiming exemption under Section 11 (income from property held for charitable or religious purposes).

Companies eligible to file ITR-6:

• Indian companies
• Foreign body corporates operating in India
• Any association, institution, or body (Indian or non-Indian) declared as a company by the Board

2. ITR-7

This form applies to companies required to file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D), such as:

• Section 139(4A): Companies receiving income from property held for charitable or religious purposes
• Section 139(4B): Political parties
• Section 139(4C): Entities like research associations, news agencies, etc.
• Section 139(4D): Universities, colleges, or institutions referred under Section 35

Important Compliance Forms and Reports for Domestic Companies

Domestic company tax filing may require the following ITR forms!

Form / Report	Purpose
ITR-6	Main return form for companies not required to file ITR-7
ITR-7	Return form for specified institutions filing under sections 139(4A) to 139(4D)
Form 26	Tax audit report under the renumbered 2026 framework, corresponding to earlier Forms 3CA / 3CB / 3CD
Form 48	Transfer pricing audit report under the renumbered 2026 framework, corresponding to earlier Form 3CEB
Form 66	MAT-related certification under the renumbered 2026 framework, corresponding to earlier Form 29B
Form 131	TDS certificate counterpart under the renumbered 2026 framework, corresponding to earlier Form 16A
Form 44	Statement for foreign tax credit under the 2026 framework, corresponding to the old Form 67
Form 168	Annual information statement structure under the new framework

ITR Filing Checklist for Domestic Companies

Before filing your Income Tax Return (ITR), as a domestic company in India, you must ensure that you have all the necessary documents and details ready. Here’s a quick checklist to help your company stay compliant and avoid errors:

How to File ITR for a Domestic Company in FY 25-26

Filing an Income Tax Return (ITR) for a domestic company is different from individual filings. 

Below is a step-by-step guide for filing ITR-6 & ITR-7 online through the Income Tax e-Filing portal.

Step 1: Register on the e-Filing Portal

• Visit the Income Tax e-Filing Portal: https://www.incometax.gov.in
• Click on “Register” and choose Company as the user type.
• Enter PAN, email ID, and mobile number to complete the registration.

Step 2: Log In

• Use your Company PAN as the User ID.
• Enter your password and captcha code to log in.

Step 3: Choose the Correct ITR Form

• ITR-6 → For companies not claiming exemption under Section 11 (income from property held for charitable/religious purposes).
• ITR-7 → For companies required to file returns under Sections 139(4A), 139(4B), 139(4C), or 139(4D) (such as charitable trusts, political parties, or research associations).

Step 4: Pre-Fill Company Data

• The portal auto-fills data from Form 26AS, TDS details, and previous ITRs.
• Verify and update revenue, expenses, depreciation, and tax payments.

Step 5: Enter Financial & Tax Details

• Fill in income details from the Profit & Loss Account and Balance Sheet.
• Enter deductions and exemptions under applicable sections.
• Include Tax Deducted at Source (TDS) details.

Step 6: Review and Validate Information

• Ensure that total income, deductions, and tax liabilities are correctly entered.
• Use the “Validate” button to check for errors.

Step 7: Calculate & Pay Tax (if applicable)

• The system will automatically calculate the company tax liability.
• Pay any outstanding tax via net banking, debit card, or challan before submission.

Step 8: Submit the ITR & E-Verify

• Click “Submit” and choose an e-Verification method:
  • Digital Signature Certificate (DSC) – Mandatory for companies
  • Electronic Verification Code (EVC) via net banking (if applicable)

Step 9: Get ITR Acknowledgement

• Once filed, the portal generates an ITR-V Acknowledgement.
• Save it for future reference.

Important Points for domestic company ITR filing:

• ITR-6 is the most commonly used form for corporate tax filing.
• Companies must file ITR electronically using a Digital Signature Certificate (DSC).
• The due date for filing ITR for domestic companies is usually October 31 of the assessment year (AY).
• ITR-7 applies to specific institutions and requires proper documentation.
• Failure to file within the due date results in penalties.

What are the Benefits of Filing ITR for a Domestic Company

Domestic companies that file taxes on time can take advantage of various benefits:

• Lower tax rates under special provisions, such as Section 115BAA (22%) and Section 115BAB (15%). 
• Proper tax filing enables businesses to qualify for government schemes, subsidies, and incentives designed to promote industry growth. 
• It ensures eligibility for tax refunds if excess tax was paid during the year. 
• Companies engaged in research, infrastructure, or manufacturing can claim additional deductions under sections 80IA, 80IB, and 80IC, leading to significant tax savings. 

What are the Common Mistakes to Avoid While Filing ITR for Domestic Companies

Filing income tax for a domestic company requires careful attention to detail to avoid errors that can lead to penalties. Here are common mistakes to watch out for:

1. Using AY language in a 2026-rules article: If the article is meant for the post-1 April 2026 framework, use Tax Year 2026-27 rather than AY 2026-27 as the main reference.
2. Selecting the wrong return form: ITR-6 and ITR-7 apply in different situations and should not be used interchangeably.
3. Using old form numbers without noting the 2026 renumbering: Forms such as 3CA/3CB/3CD, 3CEB, 29B, 16A, and 67 have corresponding renumbered forms under the 2026 framework.
4. Incorrectly claiming deductions after opting for concessional tax regimes: Companies under section 115BAA or 115BAB need to verify which deductions remain available.
5. Ignoring surcharge, cess, or MAT implications: These can materially change the final tax outgo even when the base rate appears straightforward. 

Things to Keep in Mind While Filing Income Tax for a Domestic Company

Filing income tax for a domestic company involves multiple steps, and careful planning can help avoid unnecessary penalties. Here are some important things to keep in mind:

1. Understand Your Tax Slab & Applicable Tax Rate

• The corporate tax rate in India depends on the company’s turnover and chosen tax regime:
  • 25% for companies with turnover up to ₹400 crore.
  • 22% under Section 115BAA (no exemptions allowed).
  • 15% under Section 115BAB (for new manufacturing companies).
  • 30% for other companies.
• Choosing the right company tax slab ensures correct tax computation.

 2. Ensure Timely Tax Payments & Compliance

• Advance tax must be paid in four instalments if the tax liability exceeds ₹10,000.
• A Minimum Alternate Tax (MAT) at 15% of book profits applies unless the company opts for Sections 115BAA or 115BAB.

3. Maintain Accurate Financial & Tax Records

• Keep records of:
  • Balance sheets and profit & loss statements.
  • Tax Deducted at Source (TDS) certificates.
  • Form 26AS and AIS (Annual Information Statement).
  • GST details and advance tax receipts.
• Using an income tax calculator can help estimate tax liability in advance.

4. Utilise Available Tax Deductions & Benefits

• Income tax deductions for domestic companies include:
  • Section 80G (Donations to charitable institutions).
  • Section 80JJAA (Hiring new employees).
  • Section 80M (Inter-corporate dividends).
• Companies under 115BAA and 115BAB cannot claim most deductions.

5. File Mandatory Forms for Special Tax Rates

• To opt for lower corporate tax rates, companies must file:
  • Form 10-IC (for 22% tax under Section 115BAA).
  • Form 10-ID (for 15% tax under Section 115BAB).
• Missing these forms results in a higher tax liability.

Filing taxes for a domestic company requires the correct return form, accurate tax-rate selection, proper reporting of deductions and tax credits, and attention to the updated compliance framework. A structured review before filing can help reduce errors and improve compliance.

Income Tax for Domestic Companies (AY 2026-27): FAQs

Source- Incometax.gov.in

Disclaimer: This content is for education and awareness purposes only and should not be considered investment advice or a recommendation. Investments in securities markets are subject to market risks. Read all the related documents carefully before investing.