CA Sandeep Kanoi

CA Sandeep KanoiArticles explains Rates of income-tax in respect of income liable to tax , Minimum Alternative Tax Rate, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) and Dividend Distribution Tax (DDT) Rates for Financial Year 2015-16 i.e. Assessment Year 2016-17.

Rates of income-tax in respect of income liable to tax for the Financial year 2015-2016 / Assessment Year 2016-2017

There is no change in the basic tax rate and exemption limit for Individual, Hindu Undivided Family, Association of Person, Body Of Individuals and Artificial Juridical Person in Assessment Year 2016-17 in Comparison to A.Y. 2015-16.

Further There is no change in basic tax rate of Co-operative Society, Firms, Local Authorities and Companies. However, it is proposed to reduce the basic tax rate in the case of Companies from 30% to 25% over the next four years, starting from next financial year i.e. FY 2016-17.

There is change in Surcharge which is as under :

Person Present
Surcharge Rate
Proposed
Surcharge Rate
Other than Company –
– Having Total Income exceeding
Rs. 1 crore
10% 12%
Domestic Company‑
– Having Total Income exceeding Rs. 1 crore but less than Rs. 10 crore 5% 7%
– Having Total Income exceeding
Rs. 10 crore
10% 12%
Foreign Company‑
– Having Total Income exceeding Rs. 1 crore but less than Rs. 10 crore 2% 2%
– Having Total Income exceeding
Rs. 10 crore
5% 5%

There is no change in the rate of Education Cess and Secondary & Higher Education Cess on Income Tax and accordingly rate of 2% and 1% respectively on the amount of tax computed inclusive of surcharge, wherever applicable would be applied in all cases.

Also Read-

A. Normal tax rates applicable to an individual

The normal tax rates applicable to a resident individual will depend on the age of the individual. However, in case of a non-resident individual the tax rates will be same irrespective of his age. For the purpose of ascertainment of the applicable tax slab, an individual can be classified as follows:

  • Resident individual below the age of 60 years. i.e. born on or after 1.4.1956
  • Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years. (i.e. born during 1-4-1936 to 31-3-1956)
  • Resident individual of the age of 80 years or above at any time during the year. i.e. born before 1.4.1936
  • Non-resident individual irrespective of the age.

i. individual below the age of 60 years i.e. born on or after 1.4.1956, Non-resident individual irrespective of age, Resident/Non-Resident Hindu undivided family, association of persons, body of individuals, artificial juridical person.

Tax Slab

Net income range Income-tax rates Education Cess Secondary and higher Education Cess
Up to Rs. 2,50,000 Nil Nil Nil
Rs. 2,50,000 – Rs. 5,00,000 10% of (total income minus Rs. 2,50,000) [*] 2% of income-tax 1% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 25,000 + 20% of (total income minus Rs. 5,00,000) 2% of income-tax 1% of income-tax
Above Rs. 10,00,000 Rs. 1,25,000 + 30% of (total income minus Rs. 10,00,000) 2% of income-tax 1% of income-tax

Tax Rate After Considering Surcharge# and Cess Based on Income Level-

Particulars Income Level
Taxable Income Rs. 2,50,000 Rs. 2.50 Lakh to 5 Lakh Rs. 5 Lakh to Rs. 10 Lakh Rs. 10 Lakh to Rs. 1 Crore Above Rs. 1 Crore
F.Y. 2014-15 Nil 10.30% 20.60% 30.90% 33.99%
F.Y 2015-16 Nil 10.30% 20.60% 30.90% 34.608%

(ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year i.e. born during 1.4.1936 to 31.3.1956

Net income range Income-tax rates Education Cess Secondary and higher Education Cess
Up to Rs. 3,00,000 Nil Nil Nil
Rs. 3,00,000 – Rs. 5,00,000 10% of (total income minus Rs. 3,00,000) [*] 2% of income- tax 1% of income-tax
Rs. 5,00,000 – Rs. 10,00,000 Rs. 20,000 + 20% of (total
income minus Rs. 5,00,000)
2% of income- tax 1% of income-tax
Above Rs.
10,00,000
Rs. 1,20,000 + 30% of (total income minus Rs. 10,00,000) 2% of income- tax 1% of income-tax

Tax Rate After Considering Surcharge# and Cess Based on Income Level-

Particulars Income Level
Taxable Income Rs. 3 lakh Rs. 3 Lakh to Rs. 5 Lakh Rs. 5 Lakh to Rs. 10 Lakh Rs. 10 Lakh to Rs. 1 Crore Above Rs. 1 Crore
F.Y. 2014-15 Nil 10.30% 20.60% 30.90% 33.99%
F.Y 2015-16 Nil 10.30% 20.60% 30.90% 34.608%

(iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at anytime during the previous year i.e. born before 1.4.1936

Net income range Income-tax rates Education Cess Secondary and

higher Education
Cess

Up to Rs. 5,00,000 Nil Nil Nil
Rs. 5,00,000 – Rs.
10,00,000
20% of (total income minus Rs. 5,00,000) 2% of income- tax 1% of income-tax
Above Rs. 10,00,000 Rs. 1,00,000 + 30% of (total
income minus Rs. 10,00,000)
2% of income- tax 1% of income-tax

Tax Rate After Considering Surcharge# and Cess Based on Income Level-

Particulars Income Level
Taxable Income Rs. 5 Lakh Rs. 5 Lakh to Rs. 10 Lakh Rs. 10 Lakh to Rs. 1 Crore Above Rs. 1 Crore
F.Y. 2014-15 Nil 20.60% 30.90% 33.99%
F.Y 2015-16 Nil 20.60% 30.90% 34.608%

#Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

AMT: In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 1 15JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.

[*] A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 2,000, whichever is less.

B. Co-operative Societies

In the case of co-operative societies, the rates of income-tax have been specified in Paragraph B of Part III of the First Schedule to the Bill. These rates will continue to be the same as those specified for financial year 2014-15.

The amount of income-tax shall be increased by a surcharge at the rate of twelve percent of such income-tax in case of a co-operative society having a total income exceeding one crore rupees .

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.

Income Tax Rate Chart In case of Co- Operative Societies for Financial year 2015-16

Particulars Income Level
Taxable Income Up to Rs. 10,000 Rs. 10,000 Rs. to Rs. 20,000 Rs. 20,000 to Rs. 1 Crore Above 1 Crore
F.Y. 2014-15 10.30% 20.60% 30.90% 33.99%
F.Y 2015-16 10.30% 20.60% 30.90% 34.608%

Related Posts on Co-operative Societies Taxation

1. Tax on Bank Interest of Co-Op Society, Club or Mutual Association

2. Transfer Pricing Applicability to Dairy Co-operative societies

3. Taxation of Cooperative Societies Under Direct & Indirect Tax

C. Partner ship Firms /Limited Liability Partnerships

In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for financial year 2014-15 i.e. 30%.

The amount of income-tax shall be increased by a surcharge at the rate of twelve percent of such income-tax in case of a firm having a total income exceeding one crore rupees .

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

In the case of a non-corporate taxpayers to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.

Income Tax Rate Chart In case of Firms/LLP for Financial year 2015-16

Particulars Income Level
Taxable Income Upto 1 Crore 1 Crore to 10
Crore
Above 10 Crore
F.Y. 2014-15 30.90% 33.99% 33.99%
F.Y. 2015-16 30.90% 34.608% 34.608%

Related Posts:-

D. Local authorities

The rate of income-tax in the case of every local authority is specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2014-15 i.e. 30% of taxable income..

The amount of income-tax shall be increased by a surcharge at the rate of twelve percent. of such income-tax in case of a local authority having a total income exceeding one crore rupees.

However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.

Income Tax Rate Chart In case of Local authorities for Financial year 2015-16

Particulars Income Level
Taxable Income Upto 1 Crore 1 Crore to 10
Crore
Above 10 Crore
F.Y. 2014-15 30.90% 33.99% 33.99%
F.Y 2015-16 30.90% 34.608% 34.608%

E. Companies

a. Domestic Company

The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill. These rates are the same as those specified for the financial year 2014-15 i.e. 30% of taxable income.

Surcharge at the rate of seven per cent shall be levied in case of a domestic company if the total income of the domestic company exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of twelve percent shall be levied if the total income of the domestic company exceeds ten crore rupees. In case of companies other than domestic companies, the existing surcharge of two per cent. shall continue to be levied if the total income exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of five percent shall continue to be levied if the total income of the company other than domestic company exceeds ten crore rupees.

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

In other cases (including sections 115-O, 115QA, 115R or 115TA) the surcharge shall be levied at the rate of twelve percent.

For financial year 2015-2016, additional surcharge called the “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such Cess.

b. Normal tax rates applicable to a foreign company

A foreign company is taxed at a flat rate of 40%. Apart from tax @ 40%, Education Cess is levied @ 2% of income-tax and Secondary and higher Education Cess is levied @ 1% of income-tax.

Surcharge : In addition to tax at above rate, surcharge is levied @ 2% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the amount of income-tax plus surcharge.

However, marginal relief is available from surcharge in such a manner that in the case of a foreign company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.

In case of a foreign company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “Book profit” as per section 1 15JB.

Income Tax Rate Chart In case of Corporates for Financial year 2015-16

SI.No. Particulars Tax(%) Surcharge(%) E. Cess(%) SHE. Cess (%) Effective Tax(%)
1 Domestic companies (with total income less than 1 Cr.) 30 2 1 30.90
2 Domestic companies (with total income more than1 cr. but less than 10 Cr.) 30 7* 2 1 33.063
3 Other domestic companies 30 12# 2 1 34.608
4 Foreign companies (with total income less than 1 Cr.) 40 2 1 41.20
5 Foreign companies (with total income more than 40 2 2 1 42.024
1 cr. but less than 10 Cr.)
6 Other foreign companies 40 5 2 1 43.26

* Surcharge has been increased from 5% to 7%.

# Surcharge has been increased from 10% to 12%.

MINIMUM ALTERNATE TAX (MAT) RATES FOR FINANCIAL YEAR 2015-16

SI. No. Particulars Tax (%) Surcharge
(%)
E. Cess
(%)
S Et HE. Cess (%) Effective Tax
(%)
1 Domestic companies (with total income less than 1 Cr.) 18.5 2 1 19.055
2 Domestic companies (with total income more than 1 cr. but less than 10 Cr.) 18.5 7* 2 1 20.389
3 Other domestic companies 18.5 12# 2 1 21.342
4 Foreign companies (with total income less than 1 Cr.) 18.5 2 1 19.06
5 Foreign companies (with total income more than 1 cr. but less than 10 Cr.) 18.5 2 2 1 19.436
6 Other foreign companies 18.5 5 2 1 20.008

* Surcharge has been increased from 5% to 7%.

# Surcharge has been increased from 10% to 12%.

Alternate Minimum Tax (AMT)

It is applicable on all persons other than companies. In case of Individual, Hindu Undivided Family, Association of Persons and Body of Individuals, it applies only if Adjusted Total Income exceeds Rs. 20,00,000. Adjusted Total Income is computed by increasing Total Income by any Deduction claimed under chapter VIA [Sec. 80-IA to Sec. 8ORRB (Except Sec. 80P)] and Sec. 10AA.

AMT would be computed at the rate of 18.5% on adjusted total income. Surcharge has been increased from 10% to 12% where