The perception among many U.S. investors is that the tax rates in India are so high as to make potential investment in India unattractive. The purpose of this study is to analyse the system of corporate income tax currently in operation in India and to evaluate the actual tax experiences of selected Indo-American joint ventures. Five major conclusions emerge from the analysis presented in the study. Firstly, tax laws in India make no distinction between a hundred per cent Indian company and an Indo-American company. The nominal tax rates applicables to an Indo-American company are the same as those applicable to a company with no American equity. Furthermore, an Indo-American company is entitled to claim all the tax concessions available under the tax laws in India. Secondly, the nominal rates of corporate taxation in India are on the high side, but, because of the numerous concessions available under the Indian tax laws, the effective rates are generally much lower. Indeed, the effective rates in a large number of cases have been so low that the Government of India recently had to amend the Income Tax Act to ensure that companies in India pay a minimum tax, on at least 30 per cent of their profits. Of course, if one goes through the details of the amendment and takes a look at certain other provisions in the income tax law as it operates in India, one can figure out situations (e.g. huge depreciation claims, set-off of accumulated losses in certain cases of amalgamation) in which companies in India would still be able to have a very low, even zero, tax liability. Thirdly, the effective burden of corporate income taxation in India differs from company to company and for a company from time to time. The tax experiences of the Indo-American companies selected for this study illustrate this. Fourthly, the low tax burden on Indo-American joint ventures does not result in high after-tax returns in the hands of American partners. Finally, tax litigation is a part of corporate life in India. The nominal tax rates in India are on the high side, which means that the stakes involved are also high. With this being the case, corporate management in India is continually looking for ways to reduce tax liabilities. This among other things, gives rise to tax litigation. The growing complexity of the tax system is also a major factor responsible for the high rate of tax litigation in India.