A company which is not a domestic company will pay income tax at the rate of :-

All India Bar Examination (AIBE) 16-XVI Previous Year Question Papers with Answers

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10.

A company which is not a domestic company will pay income tax at the rate of :-

A: 25 %

B: 30 %

C: 40 %

D: 20 %

The answer is: C

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Explanation

The correct option is C: 40%.

A company that is not a domestic company, i.e. a foreign company, will pay income tax at the rate of 40% on its income received, accrued or arise in India, as per the Income Tax Act, 1961. However, this rate may be reduced in some cases, such as if the foreign company has its place of effective management in India, or if it is eligible for any tax treaty benefits with India.