Rates of income-tax in respect of incomes liable to tax for the assessment year 2011-12

3.1.1 In respect of income of all categories of taxpayers liable to tax for the assessment year 2011-12, the rates of income-tax have been specified in Part 1 of the First Schedule to the Finance Act, 2011. These rates are the same as those laid down in Part III of the First Schedule to the Finance Act, 2010 for the purposes of computation of advance tax, deduction of tax at source from Salaries and charging of tax payable in certain cases during the financial year 2010-11.

The major features of the rates specified in the said Part I are as follows:

3.1.2 Individual. Hindu Undivided Family, Association of Persons, Body of Individuals or Artificial Juridical Person. – Paragraph A of Part I 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) as under:-

Income chargeable to tax Rate of income-tax
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 Individual woman, resident in India and below the age of sixty-five years Individual senior citizen, resident in India, who is of the age of sixty- five years or more
Up to Rs. 1,60,000 Nil Nil  Nil
Rs. 1,60,001 – Rs. 1,90,000 10%
Rs. 1,90,001 – Rs. 2,40,000 10%
Rs. 2,40,001 – Rs. 5,00,000 10%
Rs. 5,00,001 – Rs. 8,00,000 20% 20% 20%
Exceeding Rs. 8,00,000 30% 30% 30%

In the case of every individual, Hindu undivided family, association of persons or body of individuals, no surcharge is levied.

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 in all cases. For instance, if the income-tax computed is Rs. 1,00,000 then the education cess of two per cent is to be computed on Rs. 1,00,000 which works out to Rs. 2,000. In addition, the amount of tax computed 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. Thus in the earlier illustration, where the amount of tax computed is Rs. 1,00,000, the Education Cess of two per cent is Rs. 2,000, the said Secondary and Higher Education Cess will be computed on Rs. 1,00,000 which works out to be Rs. 1,000. The total cess in this case will amount to Rs. 3,000 (i.e., Rs. 2,000 + Rs. 1,000).

3.1.3 Co-Operative Societies – In the case of every co-operative society, the rates of income-tax have been specified in Paragraph B of Part I of the First Schedule to the Finance Act, 2011. The rates are as follows:-

Income chargeable to tax Rate
Up to Rs. 10,000 10%
Rs. 10.001 -Rs. 20,000 20%
Exceeding Rs. 20,000 30%

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.

3.1.4 Firms – In the case of every firm, the rate of income-tax of thirty per cent has been specified in Paragraph C of Part I of the First Schedule to the Finance Act, 2011. No surcharge shall be levied in the case of a firm.

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. In addition, such amount of tax 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, in all cases.

3.1.5 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 I of the First Schedule to the Finance Act, 2011. 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.

3.1.6 Companies – In the case of a company, the rate of income-tax has been specified in Paragraph E of Part I of the First Schedule to the Finance Act, 2011.

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 seven and one-half per cent of such income tax only where the 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 in the cases 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, 1961 (the Act) and where such income exceeds one crore rupees, marginal relief shall be provided.

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. No marginal relief shall be available in respect of Education Cess and Secondary and Higher Education Cess.

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