Corporation tax is imposed by

The correct answer is Central Government.

Key Points

• Corporation tax
  • To run the government and manage the affairs of a state, money is required.
  • So the government imposes taxes in many forms on the incomes of individuals and companies. Taxation in India can be classified as Direct and Indirect Taxes.
  • Corporation tax is a direct tax imposed on the net income or profit that enterprises make from their businesses.
  • Companies, both public and privately registered in India under the Companies Act 1956, are liable to pay corporation tax.
  • This tax is levied at a specific rate according to the provisions of the Income Tax Act, 1961.
  • Corporate tax is the tax imposed by the Government of India on the net income or profit that corporate enterprises make from their businesses. Hence, Option 2 is correct.
  • In most nations, the Corporate Tax is levied at a national level and can also be levied at a State or local level.
  • Private and public companies registered in India under the Companies Act are liable to pay corporate tax.
  • Minimum Alternate Tax (MAT) does not apply to such companies.
  • The Minimum Alternate Tax is a measure to include all companies in the income tax loop.
  • The MAT ensures that no company with healthy finances and substantial income can avoid paying income tax, even after claiming exemptions.