Marginal tax rate

The rate applied to the next rupee of profit, which is the rate that belongs in a valuation.

Operating profit of ₹960 crore taxed at 25% gives a ₹240 crore charge.

The distinction from the effective rate matters because tax holidays, accumulated losses and one-off credits lower the reported rate temporarily. A discounted cash flow that uses a 12% effective rate in perpetuity has assumed a concession that lasts forever.

Use the effective rate for the years the concession runs, then step to the marginal rate.