OPC tax rate in India
A One Person Company is taxed as a domestic company, not at individual slabs. Most OPCs opt for Section 115BAA and pay a flat 22% base — about 25.17% all-in once the 10% surcharge and 4% cess are added.
Below is every rate that applies to an OPC for FY 2025-26 (AY 2026-27), and how to pick the regime that costs you less — verified by a practising CA, July 2026.
An OPC is taxed like a company.
Your OPC pays corporate income tax on its profits at a flat rate — it does not use the individual income-tax slabs. The salary or remuneration you draw from it is a deductible business expense (and taxed in your hands as salary). And since dividend distribution tax was abolished, any dividend you take out is taxed in your hands at your personal slab.
Switch the regime, see the tax
Enter your OPC's expected annual profit and flip between the normal rate and Section 115BAA. Figures assume turnover up to ₹400 crore and exclude marginal relief — indicative, for planning.
Effective rate: 25.17%
Indicative only, before marginal relief and any deductions. Surcharge under 115BAA is a flat 10%; under the normal regime it is 0% below ₹1 cr, 7% up to ₹10 cr, 12% above. Verify your exact position with a CA before filing.
The rates, laid out
Verified July 2026 · FY 2025-26 (AY 2026-27)Section 115BAA
- Base rate 22%
- Surcharge (flat) 10%
- Cess 4%
- MAT Exempt
- Trade-off No major deductions
Effective ≈ 25.17%
Normal regime
- Base rate 25% / 30%
- Surcharge 0 / 7 / 12%
- Cess 4%
- MAT 15% of book profit
- Deductions Allowed
Effective ≈ 26% (small OPC)
The 25% base under the normal regime applies where turnover in FY 2023-24 was up to ₹400 crore; above that it is 30%. Surcharge kicks in only above ₹1 crore of income. Under 115BAA you surrender most incentives (such as additional depreciation and the Section 80-IA family), keeping only a few like 80JJAA and 80M.
Which regime should your OPC pick?
For most One Person Companies, Section 115BAA wins. Even a small OPC earning under ₹1 crore pays about 25.17% under 115BAA versus roughly 26% under the normal 25% regime — and 115BAA is exempt from MAT.
115BAA usually wins
Lower all-in rate, no MAT, and simpler compliance — ideal for a service OPC with few deductions to claim.
The exception
If your OPC is a DPIIT-recognised startup claiming the Section 80-IAC tax holiday (or has large deductions), the normal regime can save more — because 115BAA forces you to surrender those benefits.
The choice is irreversible. Once your OPC opts into 115BAA it stays there for life. You can now make the election when filing your return (the earlier Form 10-IC pre-filing requirement was eased under the Income-tax Rules, 2025) — but get it modelled first. We handle this inside OPC annual compliance.
OPC tax — quick answers
Is an OPC taxed like a sole proprietorship?
No. A sole proprietor pays tax at individual slabs on business income. An OPC is a separate company and pays flat corporate rates — a genuinely different tax treatment. See OPC vs sole proprietorship.
Can an OPC claim the 15% rate under Section 115BAB?
Only new manufacturing companies that began production by 31 March 2024 qualify, and that window has closed. So the 15% rate is not available to a newly registered service OPC.
Does an OPC pay Minimum Alternate Tax (MAT)?
Under the normal regime, yes — MAT is 15% of book profit plus surcharge and cess. Under Section 115BAA, MAT does not apply at all.
What does the new Income Tax Act, 2025 change?
From 1 April 2026 it renames “assessment year / previous year” to “Tax Year” and simplifies the law, but the corporate tax rates above are unchanged. Your AY 2026-27 return is still filed under the 1961 Act.
When does an OPC actually pay its tax?
Advance tax is paid in four instalments through the year, and the annual return (ITR-6) is due by 31 October. Missing advance tax triggers interest under Sections 234B and 234C.
Let a CA pick the regime and file it right
Choosing 115BAA vs the normal regime is a one-time, irreversible call — and it moves real money. We model both against your numbers, elect the right one, and handle your OPC's advance tax and ITR-6 end to end.