RATES OF INCOME TAX

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RATES OF INCOME TAX

Rates of income tax refer to the percentage at which an individual or business is taxed on their earnings. These rates can vary based on income levels, filing status, and the jurisdiction’s tax laws. Typically, income tax rates are progressive, meaning higher income levels are taxed at higher rates. Understanding the current income tax rates is crucial for effective financial planning and compliance with tax regulations.

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  • RATES OF INCOME TAX
  • Resident senior citizen
  • Resident super senior citizen
  • Partnership Firm
  • Local Authority
  • Domestic Company
  • Foreign Company
  • Co-operate Sociey

RATES OF INCOME TAX

1. In case of an Individual (resident or non-resident) or HUF or Association of Person or Body of Individual or any other artificial juridical person

Assessment Year 2024 – 25 (FY 2023- 24)

Taxable Income Tax Rate
Up to Rs. 2,50,000
Nil

Rs. 2,50,001 to Rs. 5,00,000
5%
Rs. 5,00,001 to Rs. 10,00,000

20%

Above Rs. 10,00,000
30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Education Cess [see Note]

Assessment Year 2025-26 (FY 2024-25)

Taxable Income Tax Rate
Up to Rs. 2,50,000
Nil

Rs. 2,50,001 to Rs. 5,00,000
5%
Rs. 5,00,001 to Rs. 10,00,000

20%

Above Rs. 10,00,000
30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Education Cess [see Note]

2. In case of a resident senior citizen (who is 60 years or more at any time during the previous year but less than 80 years on the last day of the previous year)

Assessment Year 2024-25 and 2025-26

Taxable Income Tax Rate

Up to Rs. 3,00,000
Nil
Rs. 3,00,001 – Rs. 5,00,000
5%

Rs. 5,00,001 – Rs. 10,00,000

20%

Above Rs. 10,00,000
30%

Less: Rebate under Section 87A [see Note]
Add: Surcharge and Education Cess [see Note]

3. In case of a resident super senior citizen (who is 80 years or more at any time during the previous year)

Assessment Year 2024 – 25 (FY 2023- 24)

Taxable Income Tax Rate

Up to Rs. 5,00,000
Nil
Rs. 5,00,001 – Rs. 10,00,000

20%

Above Rs. 10,00,000
30%

4. Partnership Firm

For the Assessment Year 2020- 21 and 2021-22, a partnership firm (including LLP) is taxable at 30%.

Add:

  1. a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
  2. b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
  3. c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.

5. Local Authority

For the Assessment Year 2020-21 and 2021-22 , a local authority is taxable at 30%.

Add:

  1. a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
  2. b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
  3. c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.

6. Domestic Company

For the Assessment Year 2020-21, a domestic company is taxable at 30% (25% if turnover or gross receipt does not exceed Rs.400 Crore in previous year).

Add:

  1. a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

  1. b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
  2. c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.

7. Foreign Company

Add:

  1. a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under.

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

  1. b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
  2. c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.

8. Co-operative Society

Add:

  1. a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief (where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees).
  2. b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
  3. c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.
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