The rates for deducting income-tax at source from Salaries and computing advance tax during the financial year 2008-09 have been specified in Part III of the First Schedule to the Act. These rates are also applicable for charging income-tax during the financial year 2008-09 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during that financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for short duration, etc. The rates are as follows:
Individual, Hindu Undivided Family, Association of Persons, Body of Individuals or Artificial Juridical Person
Paragraph A of Part III of the First Schedule specifies the rates of income-tax in the case of every individual, Hindu undivided family, association of persons, body of individuals or artificial juridical person (other than a co-operative society, firm, local authority and company). In the case of individuals, the basic exemption limit has been enhanced from Rs. 1,10,000/- to Rs. 1,50,000/-. The exemption limit for every woman resident in India and below the age of 65 years of age has been enhanced from Rs. 1,45,000/- to Rs. 1,80,000/-. Further, the exemption limit for every individual resident in India and of the age of 65 years or more at any time during the previous year has been raised from Rs. 1,95,000/- to Rs. 2,25,000/-.
The rates of tax during the financial year 2008-09 in the case of persons mentioned above are as follows:
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Income chargeable to tax
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Rate of income-tax
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Individual (other than individual woman resident in India and senior citizen resident in India), HUF, association of persons, body of individuals and artificial juridical person
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Individual woman, resident in India and below the age of sixty- five years
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Individual senior citizen, resident in India, who is of the age of sixty-five years or more
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Up to Rs. 1,50,000
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Nil |
Nil |
Nil |
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Rs. 1,50,001 – Rs. 1,80,000
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10% |
NIL |
NIL |
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Rs. 1,80,001 – Rs. 2,25,000
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10% |
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Rs. 2,25,001 – Rs. 3,00,000
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10% |
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Rs. 3,00,001 – Rs. 5,00,000
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20%
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20%
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20%
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Exceeding Rs 5,00,000
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30% |
30% |
30% |
Surcharge- In the case of every individual, Hindu undivided family, association of persons or body of individuals, surcharge shall be levied at the rate of 10% of income-tax only where the total income exceeds ten lakh rupees. Marginal relief shall be provided to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over Rs. 10,00,000/- is limited to the amount by which the income is more than Rs. 10,00,000/- as illustrated in para 3.1-4.
In the case of artificial juridical person, surcharge shall be levied at the rate of ten per cent. of the income-tax payable on all levels of income.
In respect of fringe benefits chargeable to tax under section 115WA of the Income Tax Act, in the case of every association of persons and body of individuals,surcharge shall be levied at the rate of ten per cent, where the fringe benefits exceed ten lakh rupees. In the case of artificial juridical person, surcharge shall be levied at the rate of ten per cent, Irrespective of the amount of fringe benefits.
Education Cess- An additional surcharge called the “Education Cess on income-tax” shall continue to be levied at the rate of two per cent on the amount of tax computed, inclusive of surcharge, if any, in all cases as illustrated in para 3.1-7. In addition, the amount of tax computed and surcharge shall also be increased by an additional surcharge called “Secondary and Higher Education Cess on income–tax” at the rate of one per cent of such income-tax and surcharge as illustrated in para 3.2.7. No marginal relief shall be available in respect of Education Cess.
Co-operative societies – In the case of every co-operative society, the rates of income-tax have been specified in Paragraph B of Part III of the First Schedule to the Act. The rates are as follows-
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Income chargeable to tax |
Rate
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Up to Rs. 10,000 |
10%
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Rs. 10,001 – Rs. 20,000 |
20%
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Exceeding Rs. 20,000 |
30%
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No surcharge shall be levied. “Education Cess on income-tax” and “Secondary and Higher Education Cess on income–tax” shall be levied at the rate of two per cent. And one per cent, respectively of the amount of tax computed. No marginal relief shall be available in respect of Education Cess.
Firms – In the case of every firm, the rate of income-tax of thirty per cent has been specified in Paragraph C of Part III of the First Schedule to the Act. Surcharge at the rate of ten per cent shall be levied only in cases where the firm has total income exceeding one crore rupees. However, marginal relief shall be allowed to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over one crore rupees is limited to the amount by which the income is more than one crore rupees. In respect of fringe benefits chargeable to tax under section 115WA of the Income Tax Act, surcharge shall be levied at the rate of ten per cent .of the amount of tax irrespective of the amount of fringe benefits.
Additional surcharge called the “Education Cess on Income-tax” shall continue to be levied at the rate of two per cent on the amount of tax computed, inclusive of surcharge, in all cases. In addition, such amount of tax and surcharge shall be further increased by an additional surcharge called “Secondary and Higher Education Cess on income-tax” computed at the rate of one per cent on the amount of tax, inclusive of surcharge, in all cases. No marginal relief shall be available in respect of Education Cess.
Local authorities – In the case of every local authority, the rate of income-tax has been specified at thirty per cent. in Paragraph D of Part III of the First Schedule to the Act. No surcharge shall be levied. However, “Education Cess on Income-tax” and “Secondary and Higher Education Cess on income-tax” shall be levied at the rate of two per cent and one per cent respectively of the amount of tax computed. No marginal relief shall be available in respect of Education Cess.
Companies – In the case of a company, the rate of income-tax has been specified in Paragraph E of Part III of the First Schedule to the Act.
In case of a domestic company, the rate of income-tax is thirty per cent. of the total income. The tax computed shall be enhanced by a surcharge of ten per cent only where such domestic company has total income exceeding one crore rupees.
In the case of a company other than a domestic company, royalties received from Government or Indian concern under an approved agreement made after 31-3-1961, but before 1-4-1976 shall be taxed at fifty per cent. Similarly, in the case of fees for technical services received by such company from Government or Indian concern under an approved agreement made after 29-2-1964, but before 1-4-1976, shall be taxed at fifty per cent. On the balance of the total income of such company, the tax rate shall be forty per cent. The tax computed shall be enhanced by a surcharge of two and one-half per cent only where such company has total income exceeding one crore rupees.
However, marginal relief shall be allowed in the case of every company to ensure that the additional amount of income-tax payable, including surcharge, on the excess of income over one crore rupees is limited to the amount by which the income is more than one crore rupees. Also, in the case of every company having total income chargeable to tax under section 115JB of the Income Tax Act and where such income exceeds one crore rupees, marginal relief shall be provided.
In respect of fringe benefits, in the case of a domestic company, surcharge shall be levied at the rate of ten per cent of the amount of tax, irrespective of the amount of fringe benefits. In the case of a company other than a domestic company, in respect of fringe benefits, surcharge shall be levied at the rate of two and one-half per cent of the amount of tax, irrespective of the amount of fringe benefits.
“Education Cess on income-tax” shall continue to be levied at the rate of two per cent on the amount of tax computed, inclusive of surcharge in the case of every company. Also, such amount of tax and surcharge shall be further increased by an additional surcharge called “Secondary and Higher Education Cess on income-tax” at the rate of one per cent. of the amount of tax, computed, inclusive of surcharge.
