Financial Quotient

What is corporate income tax?

Corporate income tax refers to the income tax payable by a company on the taxable income it earns in the preceding financial year. The tax is levied on a net basis, that is, net of deductible expenses.

For every source of taxable income derived by a company, it can claim any relevant expenses that are wholly and exclusively incurred in earning that income.

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A version of this article appeared in the print edition of The Sunday Times on May 12, 2019, with the headline 'What is corporate income tax?'. Print Edition | Subscribe