Firms can avoid taxes legally, even though it is well understood that tax payment is a fundamental and measurable behaviour towards society. In this paper, we elucidate such legal provisions in the Indian tax law and analyse tax payments with corporate social responsibility spending and find that firms spending more on CSR pay lower taxes. By employing fixed effects and quantile regression models to ascertain the impact of firm size on the effective tax rate using panel data for 1995–2017, we find that large firms’ effective tax rates are lower as compared to small firms. Moreover, the effective tax rate decreases with firm size. Large firms adopt more tax-aggressive policies and use various tax incentives to minimise their tax liability.
