Do you know that manufacturing companies incorporated after 01st Oct, 2019 can opt for an optional tax rate and pay 15%?

March 31, 2020 is already knocking its door. We would be stepping in the new Financial year. Definitely new year may have some changes in the tax rates. Here we come up with an article which gives a detailed information about the tax structure applicable for FY 2020-21.

Tax structure for Companies:

For Domestics Companies:

Gross turnover upto Rs. 400 Crore  

Net income Tax rate Surcharge Cess
If net income is upto 1 Crore 30% Nil 4%
Above 1 Crore but upto 10 Crore 30 Lac + 30% 7% 4%
If net income is above 10 crore Rs. 3 Cr + 30% 12% 4%

 –

Net income Tax rate Surcharge Cess
If net income is upto 1 Crore 25% Nil 4%
Above 1 Crore but upto 10 Crore 25 Lac + 25% 7% 4%
If net income is above 10 crore Rs. 2.5 Cr + 25% 12% 4%

Tax structure for individuals upto 60 years age

New income tax slab for individuals:

Income tax slab Tax rate
If income is upto 2.5 Lac Nil
From 2.5 Lac to 5 lac 5% of total income + cess 4%
From 5 lac to 7.5 lac 10% of total income more than 5 lac plus 4% cess
From 7.5 lac to 10 lac 15% of total income more than 7.5 lac plus 4% cess
From 10 Lac to 12.5 Lac 20% of total income more than 10 lakh plus 4% cess
From 12.5 lac to Rs 15 Lac 30% of total income more than 15 Lac plus 4% cess

The above is the nee tax regime. This tax structure is optional for individuals. If you follow the new structure, the deduction that you were getting in 80C, 80D and HRA will be completely waived off. i.e LIC Premium, housing loan principal and all the other benefits taken in section 80c would not be available for you. Your tax would be determined directly as per the above rates. Even benefit of rebate of Sec 87A will not be available.

Old tax rate structure for individuals can also be taken. If you are going with the old tax structure, then you get all the 80c and 80d deduction benefits.

Option 2

Income tax slab Tax rate
If income is upto 3 Lakh Nil
From 2.5 Lac to 5 lakh 5% of total income
From 5 lac to 10 lakh 20% of total income more than 5 lac
Above 10 Lakh 30% of total income more than 10 lakh

Tax structure for LLP

If net income is upto Rs 1 Crore:

Tax rate 30% plus 4% cess

If net income is more than 1 Crore:

Rs 30 Lakhs + 30% + 12% cess on taxes and 4 % cess

The above is a synopsis of the tax rate applicable to Companies, LLP and individuals.

Author Bio

Qualification: CA in Practice
Company: Makwana Sweta & Associates
Location: Mumbai, Maharashtra, IN
Member Since: 20 Aug 2017 | Total Posts: 62
A qualified Chartered Accountant with over 4 years of rich experience in Company Law, Audits, Accounts & taxation. She is a writer at her own blog https://insights.caswetamakwana.com/. She is keen in streamlining business accounts of the Company and provide Startup consultancy. View Full Profile

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One Comment

  1. Anba says:

    In view of the pandemic the income tax returns filing for the FY 2019-20:AY 2020-21, for individuals and others should be extended upto 31st August 2020.
    Notifications to this effect should be given by the finance ministry and CBDT.

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