Do small companies in India need to pay tax?

Income of even single penny is taxable for companies.

Small Companies as per Companies Act means any company other than public company whose

• Paid up capital is not more than Rs. 50 Lakh; or

• Turnover is not more than 5 crore.

There is no exemption for small companies in payment of Income Taxes. Hence, each small company needs to pay taxes at the prescribed tax rate.

However, the tax rate has been reduced for the companies operating at small scale.

For F.Y. 2018-2019 (A.Y. 2019-20) all types of domestic companies whether it is Private Company or Public Company or One Person Company will be tax at rate of 30%. However, if gross receipts or turnover does not exceeds Rs. 250 Crore then rate of tax will be 25%. Additionally surcharge will be levied at the following rate.

7% - if total income exceeds Rs. 1 Crore
12% - if total income exceeds Rs. 10 Crore