Corporate Tax Calculator for Indian Companies
India corporate tax is 25%. See how much you could save.
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How India companies reduce their corporate tax
Indian domestic companies pay a base corporate tax of 22% under the new optional tax regime (section 115BAA) or 25% for companies with turnover above INR 400 crore under the old regime. A surcharge and cess bring effective rates to approximately 25.17% and 29.12% respectively. India's FEMA regulations govern outbound investment by Indian companies. Singapore is historically the most popular international structure for Indian tech startups — the 'Singapore flip' involves Indian founders establishing a Singapore holding company with an Indian operating subsidiary, attracting international venture capital while keeping technical operations in India. Mauritius was a popular holding jurisdiction due to treaty benefits that were revised in 2017. UAE Free Zone is increasingly used by Indian founders running export-oriented businesses. Gift City (IFSC) in Gujarat is India's domestic answer to offshore financial centres, offering corporate tax of 22% for eligible financial services.
Top tax corridors for India companies
Singapore Holding (8.5%)
9% effectiveSingapore is the preferred incorporation jurisdiction for Indian startup founders seeking international VC funding. The India–Singapore tax treaty (revised 2017) provides withholding tax relief. Singapore holding company above an Indian subsidiary is the standard 'Singapore flip' structure. Capital gains from Indian subsidiaries are taxable in India since 2017.
Mauritius Holding (structure)
3% effectiveMauritius was historically used for India-bound investment structures under the India–Mauritius treaty. Since the 2017 treaty revision, capital gains from Indian securities are now taxable in India. Mauritius GBC (Global Business Company) still offers benefits for fund structures and holding of non-Indian assets at 3% corporate tax.
UAE Free Zone (9%)
9% effectiveUAE Free Zone companies qualify for 0% on qualifying free zone income. For Indian founders in export services, IT outsourcing, or e-commerce, establishing a UAE entity as the contracting party for international clients reduces Indian withholding tax exposure. India–UAE DTAA provides treaty benefits.
Savings example: 🇮🇳 India → 🇸🇬 Singapore Holding (8.5%)
Annual Revenue
€1.3M
assumed
Tax in India
€313K
at 25%
Tax Optimised
€106K
at 9%
Indicative estimate based on statutory rates. Actual savings depend on structure, substance, and individual circumstances.
Frequently asked questions — India corporate tax
What is the 'Singapore flip' and why do Indian startups use it?
The Singapore flip involves Indian founders incorporating a Singapore parent company (typically a Pte. Ltd.) with their Indian company becoming a wholly-owned subsidiary. This structure is used to access US and international venture capital, which typically prefers Singapore or Delaware entities over Indian companies. The flip requires FEMA approval from RBI and tax clearances.
How has the India–Mauritius treaty changed for capital gains?
Prior to April 2017, the India–Mauritius treaty exempted capital gains on Indian securities from Indian tax. From April 2017, capital gains on shares acquired after April 1, 2017 are taxable in India. Gains on pre-2017 acquisitions retain transitional protection. Mauritius structures for new Indian equity investments no longer provide the historical tax advantage.
Does India's FEMA restrict outbound investments by Indian companies?
Yes. FEMA (Foreign Exchange Management Act) regulates outbound investments by Indian residents. Overseas Direct Investment (ODI) by Indian companies is subject to RBI guidelines, including limits on investment amounts (400% of net worth for certain routes), reporting requirements, and restrictions on certain structures. Forma Flaga works with FEMA-qualified advisors for India-connected structures.
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