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Consider the following statements : A. Corporation tax is levied on the income of both registered, unregistered companies and corporations. B. Corporation tax is levied on incomes of individuals and Hindu Undivided Family. C. Corporation tax is levied only on the incomes of registered companies and corporations. Which of the above statements is/are true? Choose the correct answer from the options given below :

Consider the following statements : A. Corporation tax is levied on the income of both registered, unregistered companies and corporations. B. Corporation tax is levied on incomes of individuals and Hindu Undivided Family. C. Corporation tax is levied only on the incomes of registered companies and corporations. Which of the above statements is/are true? Choose the correct answer from the options given below : Correct Answer Only C is true

The correct answer is Only C is true.

Key Points

  • Corporation tax:
    • Corporation Tax or Corporate Tax is a direct tax levied on the net income or profit of a corporate entity from their business, foreign or domestic.
    • The rate at which the tax is imposed as per the provisions of the Income Tax Act, 1961 is known as the Corporate Tax Rate.
    • The Corporate Tax rate is based on a slab rate system depending on the type of corporate entity and the different revenues earned by each of the corporate entities
    • It is a tax levied on the income of corporate firms and corporations.
    • Companies, both private and public which are registered in India under the Companies Act 1956, are liable to pay corporate tax. Hence, Statements C is true and A is not true.
  •  A Hindu Undivided Family is taxed on the same slab rates that are applicable to an individual income tax assessee. Hence, statement B is not true.
    • Hindu Undivided Family ('HUF') is treated as a 'person' under section 2(31)​ of the Income-tax Act, 1961.

Related Questions

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Reason (R): Some economists are of the opinion that when tax has already been paid on the profit of the company and balance is distributed as dividend to the owners, tax need not be levied on them.
In the light of the above two statements, choose the correct answer from the options given below.
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