Domestic Company for AY 2026-27: Returns, Forms, Tax Rates and Key Deductions

What a domestic company means

The department guidance refers to section 2(22A) of the Income-tax Act, 1961. A domestic company is an Indian company, or another company which has made the prescribed arrangements for declaration and payment of dividends within India in respect of income liable to tax under the Act.

In practice, domestic-company taxation questions usually begin with two things: which return form applies, and under which tax-rate provision the company is being taxed.

Which return form usually applies

The domestic-company page for AY 2026-27 lists ITR-6 and ITR-7 as the main return routes depending on the nature of the company and the section under which it is required to file.

• ITR-6: for companies other than those claiming exemption under section 11
• ITR-7: for persons including companies required to file under sections 139(4A), 139(4B), 139(4C), or 139(4D)
• Section 139(4A): income from property held under trust wholly or partly for charitable or religious purposes
• Section 139(4B): Chief Executive Officer of a political party
• Section 139(4C): specified entities such as research associations, news agencies, and certain other bodies referred to in section 10
• Section 139(4D): university, college, or other institution referred to in section 35

Important forms domestic companies commonly deal with

The department page lists a broad form set covering audit, transfer pricing, MAT, concessional-rate options, foreign tax credit, and tax-credit reconciliation.

• Form 26AS: TDS and TCS related tax-credit view
• AIS: broader statement showing TDS, TCS, SFT information, taxes paid, refund or demand items, and other information
• Form 3CA-3CD: tax-audit report and statement of particulars where section 44AB applies and the taxpayer is already subject to audit under another law
• Form 3CEB: accountant's report for international transactions or specified domestic transactions under section 92E
• Form 16A: certificate for TDS on income other than salary
• Form 29B: accountant's report for companies to which section 115JB applies
• Form 67: foreign tax credit statement for income from outside India
• Form 10-IB: option form for section 115BA
• Form 10-IC: option form for section 115BAA
• Form 10-ID: option form for eligible new manufacturing domestic companies under section 115BAB
• Form 10-CCB, 10-CCBBA and 10-CCBC: audit-report forms linked to specified deduction claims under the listed sections

Tax rates for domestic companies for AY 2026-27

The department page gives the domestic-company tax rates excluding surcharge and cess in a condition-based format rather than a slab format. The applicable rate depends on turnover history or the specific concessional section chosen.

• 25 percent where total turnover or gross receipts during previous year 2020-21 do not exceed Rs. 400 crore
• 25 percent where the company has opted for section 115BA
• 22 percent where the company has opted for section 115BAA
• 15 percent for business income and 22 percent for other-than-business income where the company has opted for section 115BAB
• 30 percent for any other domestic company

Surcharge, marginal relief, and cess

The domestic-company guidance explains surcharge as an extra levy on the income-tax amount once taxable income crosses the relevant threshold.

For ordinary domestic-company taxation, the page shows surcharge at 7 percent where taxable income exceeds Rs. 1 crore up to Rs. 10 crore, and 12 percent where taxable income exceeds Rs. 10 crore. For companies opting under section 115BAA or section 115BAB, the page shows surcharge at 10 percent.

Health and education cess at 4 percent applies on income tax plus surcharge, if any. Marginal relief is also available so that surcharge does not exceed the additional income over the threshold in the manner described by the portal.

• Surcharge for regular domestic-company rate path: 7 percent above Rs. 1 crore up to Rs. 10 crore
• Surcharge for regular domestic-company rate path: 12 percent above Rs. 10 crore
• Surcharge for section 115BAA or section 115BAB route: 10 percent
• Health and education cess: 4 percent
• Marginal relief applies around the Rs. 1 crore and Rs. 10 crore thresholds

MAT position companies should not ignore

The page states that a company is liable to Minimum Alternate Tax at 15 percent of book profit, plus applicable surcharge and cess, where the normal tax liability is lower than 15 percent of book profit.

For a company that is a unit in an International Financial Services Centre and derives income solely in convertible foreign exchange, the page states MAT at 9 percent plus applicable surcharge and cess.

The same page also states that companies opting for section 115BAA or section 115BAB are exempt from MAT.

How concessional-company tax options affect deductions

A concessional-rate option can reduce the headline tax rate, but it can also shut off important deduction claims. The domestic-company page specifically notes that companies opting for section 115BAA or section 115BAB are not allowed certain deductions such as section 80IA, 80IAB, 80IAC, 80IB and similar provisions, while section 80JJAA and section 80M remain available.

That trade-off matters in practice because the lower rate is not the only decision point. Companies still need to compare the tax-rate benefit against the value of deductions or incentives lost under the concessional route.

Important deduction sections still seen on the domestic-company page

The department page lists a number of Chapter VI-A deductions and business-linked incentives that can still matter depending on the company's activity and the tax route chosen.

• Section 80G: deduction for eligible donations, subject to category rules and the cash-payment restriction
• Section 80GGA: deduction for specified scientific-research or rural-development donations, subject to the conditions on the page
• Section 80GGB: deduction for eligible contribution to political party or electoral trust by non-cash mode
• Section 80IA: deduction linked to infrastructure, industrial parks, power undertakings, and other specified business categories, subject to conditions
• Section 80IAB: deduction for development of Special Economic Zone, subject to conditions
• Section 80IAC: deduction for eligible start-up business profits, subject to conditions
• Section 80IB, 80IC, 80IE: deductions for specified industrial or regional undertakings, subject to conditions
• Section 80JJA and 80JJAA: biodegradable-waste business deduction and additional employee-cost deduction, subject to conditions
• Section 80LA: deduction for offshore banking units and IFSC income, subject to conditions
• Section 80M: deduction linked to inter-corporate dividend that is further distributed within the specified time limit

A practical checklist before filing a company return

Domestic-company return filing usually becomes easier when the company settles the tax route first and the form list second. Most errors come from mixing up the concessional option forms, missing the linked audit-report form, or assuming MAT or deduction eligibility without checking the selected section.

• Confirm whether ITR-6 or ITR-7 applies before preparing the return
• Decide early whether the company is using the regular rate, section 115BA, section 115BAA, or section 115BAB route
• Check whether Form 10-IB, 10-IC, or 10-ID is required for the chosen tax option
• Review AIS, Form 26AS, and Form 16A before final computation
• Check whether tax audit, transfer pricing, or MAT reporting triggers Form 3CA-3CD, 3CEB, or 29B
• Verify whether any Chapter VI-A deduction is still available under the chosen tax regime