Direct Tax Advisory

India’s taxation system is one of the most complex globally and is constantly updated to reflect changes in the economy and government policies. Despite improvements, the system still faces delays, inefficiencies, and heavy penalties for missteps or lack of knowledge. Foreign nationals, international companies, and cross-border transactions face additional challenges and restrictions.

Currently, companies operating in India may need to pay three kinds of direct taxes – Corporate Tax, Minimum Alternate Tax (MAT), and Dividend Distribution Tax (DDT). Below are the broad guidelines:

Types of Direct Taxes

• Corporate Tax: Domestic companies are taxed at 30% (25% for SMEs). A surcharge may apply based on profit levels, and a 4% cess applies to all companies. Foreign companies are taxed at 40% plus surcharge and cess.
• Minimum Alternate Tax (MAT): Introduced to cover the gap between accounting profit and taxable profit. MAT is levied at 18.5% of book profits, plus surcharge and cess. Companies must pay the higher of Corporate Tax or MAT.
• Dividend Distribution Tax (DDT): Payable by domestic companies on dividends distributed to shareholders, as such dividends are tax-free in shareholders’ hands. DDT is levied at 15% plus surcharge and cess. However, if dividends are received from foreign companies, shareholders themselves must pay tax on them.

Our Tax Advisory Services

Our direct tax practice is long-established, with specialists experienced in income tax preparation, assessments, scrutiny, and dispute cases. We provide comprehensive support in the following areas:

• Tax planning and optimisation strategies for Indian and overseas companies.
• Tax planning for mergers, acquisitions, and proposed transactions.
• Ongoing direct tax payments and self-assessments for companies and firms.
• Compliance with TDS, professional tax, and other statutory obligations.
• Income tax preparation and filing of returns for companies and firms.
• Liaising with Income Tax authorities in cases of demands, scrutiny, or disputes.
• Conducting tax audits for companies and firms (Form 3CD as per Income Tax rules).
• Employee tax calculations and payroll-related tax services.

Conclusion

Direct tax compliance in India requires careful planning and expert guidance to minimize risks and optimize tax efficiency. Our advisory services ensure companies and individuals remain compliant, avoid penalties, and make informed financial decisions in alignment with business goals.