1
CORPORATE TAXES IN INDIA on 18th April 2012, 11:18 pm
j.padiya
CSoC Well-Wisher
Corporate Taxes in India
Domestic companies are subject to income tax on all sources of income and capital gains wherever arising.
Foreign companies are subject to income tax only on their income from Indian Sources.
Company tax is levied as follows: Rates
Domestic companies 33.22%
Foreign companies 42.23%
Note: Where the total income of the domestic or foreign company does not exceed Rupees ten million, no surcharge is levied. In such cases, the effective rate of tax for domestic companies and foreign companies is 30.9% and 41.2% respectively.
However, the following income of foreign companies is taxed at the following specified rates on a gross basis and not at 42.23%.
Royalty and Fees for Technical Services (subject to certain conditions):
• Royalty and Fees for Technical Services received pursuant to an agreement made
– after 31 May 1997 but before 1 June 2005 (if the payment exceeds Rs 10m) 21.12%
– after 1 June 2005 (if the payment exceeds Rs 10m) 10.56%
If the payment does not exceed 10M then the rates would be 20.6% and 10.3% respectively.
• Interest Income 21.12%
• Income from units of Mutual Funds purchased in foreign currency 21.12%
• Income from Global Depository Receipts (GDRs) 10.56%
• Income by offshore funds (overseas company) 10.56%
Income of Foreign Institutional Investors (FIIs) in listed securities:
– Short term capital gains in respect of transactions chargeable to Securities Transaction Tax 15.84%
– Short term capital gains in cases other than the one mentioned above 31.67%
– Long term capital gains (other than those subjected to Securities Transaction Tax) 10.56%
– Other income 21.12%
Domestic companies are subject to income tax on all sources of income and capital gains wherever arising.
Foreign companies are subject to income tax only on their income from Indian Sources.
Company tax is levied as follows: Rates
Domestic companies 33.22%
Foreign companies 42.23%
Note: Where the total income of the domestic or foreign company does not exceed Rupees ten million, no surcharge is levied. In such cases, the effective rate of tax for domestic companies and foreign companies is 30.9% and 41.2% respectively.
However, the following income of foreign companies is taxed at the following specified rates on a gross basis and not at 42.23%.
Royalty and Fees for Technical Services (subject to certain conditions):
• Royalty and Fees for Technical Services received pursuant to an agreement made
– after 31 May 1997 but before 1 June 2005 (if the payment exceeds Rs 10m) 21.12%
– after 1 June 2005 (if the payment exceeds Rs 10m) 10.56%
If the payment does not exceed 10M then the rates would be 20.6% and 10.3% respectively.
• Interest Income 21.12%
• Income from units of Mutual Funds purchased in foreign currency 21.12%
• Income from Global Depository Receipts (GDRs) 10.56%
• Income by offshore funds (overseas company) 10.56%
Income of Foreign Institutional Investors (FIIs) in listed securities:
– Short term capital gains in respect of transactions chargeable to Securities Transaction Tax 15.84%
– Short term capital gains in cases other than the one mentioned above 31.67%
– Long term capital gains (other than those subjected to Securities Transaction Tax) 10.56%
– Other income 21.12%
2 Re: CORPORATE TAXES IN INDIA on 19th April 2012, 10:20 pm
rchgiri
CSoC Super Master
Please mention the Financial Year as well as Assessment Year for which the above corporate taxes are applicable.
3 TAX RATE FOR F.Y.2011-12 (A.Y.2012-13) on 19th April 2012, 10:39 pm
j.padiya
CSoC Well-Wisher
F.Y.2011-12 (A.Y.2012-13)
a) Individuals, HUF’s, AOPs, BOIs
For Resident Women (Age limit = below 60 years)
Up to Rs 1,90,000
NIL
Rs 1,90,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For Resident Senior Citizens (Age limit = 60 years or more at any time during the year but not more than 80 years on the last day of the year)
Up to Rs 2,50,000
NIL
Rs 2,50,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For Resident Super Senior Citizens (Age Limit = 80 years or more at any time during the year)
Up to Rs 5,00,000
NIL
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For any other individual, every HUF /AOP / BOI artificial juridical person
Up to Rs 1,80,000
NIL
Rs 1,80,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,001 and above
30 per cent
b) Partnership Firms
Income Tax Rate = 30 %
Education Cess @ 3%
c) Corporate Income Tax
1. For Domestic companies
Income Tax Rate = 30 %
Surcharge @ 5% (If gross turnover of company exceeds Rs. 1 Crore)
Education Cess @ 3%
2. For Foreign Companies
Income Tax Rate = 40 %
Surcharge @ 2% (If gross turnover of company exceeds Rs. 1 Crore)
Education Cess @ 3%
d) Co-operative Societies
The Following rates are applicable to a co-operative society
Net Income Range
Rate of Income Tax
Up to Rs 10,000
10 per cent
Rs 10,000 to Rs 20,000
20 per cent
Rs 20,000 and above
30 per cent
Education cess @ 3% on total tax is also payable.
e) Local Authorities
For Local authorities, Income is taxed at a flat rate of 30%. An education cess of 3% is payable on the tax, yielding effective tax rate of 30.90%.
a) Individuals, HUF’s, AOPs, BOIs
For Resident Women (Age limit = below 60 years)
Up to Rs 1,90,000
NIL
Rs 1,90,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For Resident Senior Citizens (Age limit = 60 years or more at any time during the year but not more than 80 years on the last day of the year)
Up to Rs 2,50,000
NIL
Rs 2,50,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For Resident Super Senior Citizens (Age Limit = 80 years or more at any time during the year)
Up to Rs 5,00,000
NIL
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,000 and above
30 per cent
For any other individual, every HUF /AOP / BOI artificial juridical person
Up to Rs 1,80,000
NIL
Rs 1,80,001 to Rs 5,00,000
10 per cent
Rs 5,00,001 to Rs 8,00,000
20 per cent
Rs 8,00,001 and above
30 per cent
b) Partnership Firms
Income Tax Rate = 30 %
Education Cess @ 3%
c) Corporate Income Tax
1. For Domestic companies
Income Tax Rate = 30 %
Surcharge @ 5% (If gross turnover of company exceeds Rs. 1 Crore)
Education Cess @ 3%
2. For Foreign Companies
Income Tax Rate = 40 %
Surcharge @ 2% (If gross turnover of company exceeds Rs. 1 Crore)
Education Cess @ 3%
d) Co-operative Societies
The Following rates are applicable to a co-operative society
Net Income Range
Rate of Income Tax
Up to Rs 10,000
10 per cent
Rs 10,000 to Rs 20,000
20 per cent
Rs 20,000 and above
30 per cent
Education cess @ 3% on total tax is also payable.
e) Local Authorities
For Local authorities, Income is taxed at a flat rate of 30%. An education cess of 3% is payable on the tax, yielding effective tax rate of 30.90%.
4 Re: CORPORATE TAXES IN INDIA on 19th April 2012, 11:06 pm
rchgiri
CSoC Super Master
Please clarify how you got the following corporate tax rate in your first posting & mention the financial year & assessment year for which these rates are applicable.
Company tax is levied as follows: Rates
Domestic companies 33.22%
Foreign companies 42.23%
Secondly you have not mentioned MAT (Minimum Alternate Tax) Rates & Dividend Distribution Tax Rates which fall under the corporate taxation.
It will be better if you mention these rates also for better knowledge of the readers as well as students.
Company tax is levied as follows: Rates
Domestic companies 33.22%
Foreign companies 42.23%
Secondly you have not mentioned MAT (Minimum Alternate Tax) Rates & Dividend Distribution Tax Rates which fall under the corporate taxation.
It will be better if you mention these rates also for better knowledge of the readers as well as students.
5 Re: CORPORATE TAXES IN INDIA on 20th April 2012, 12:54 am
j.padiya
CSoC Well-Wisher
sir,
i m also a student of executive. read the article and felt to be useul. so shared. i don't mind if u rectify it sir. it would be my pleasure to get rectify by seniors like u.
For Minimum Alternate Tax
Under the existing provisions of section 115JB(1), a company is required to pay a minimum alternate
tax (MAT) on its book profit, if the income-tax payable on the total income, as computed under the
Act in respect of any previous year relevant to the assessment year commencing on or after 1st April,
2011, is less than the MAT. The amount of tax paid under the said section is allowed to be carried
forward and set off against tax payable up to the tenth assessment year immediately succeeding the
assessment year in which the tax credit becomes allowable under the provisions of section 115JAA.
It is proposed to amend this section to increase the rate of MAT to eighteen and one-half per cent.
from the existing rate of eighteen per cent. of such book profit.
This amendment will take effect from 1st April, 2012 and will, accordingly, apply in relation to the
assessment year 2012-13 and subsequent years.
i m also a student of executive. read the article and felt to be useul. so shared. i don't mind if u rectify it sir. it would be my pleasure to get rectify by seniors like u.
For Minimum Alternate Tax
Under the existing provisions of section 115JB(1), a company is required to pay a minimum alternate
tax (MAT) on its book profit, if the income-tax payable on the total income, as computed under the
Act in respect of any previous year relevant to the assessment year commencing on or after 1st April,
2011, is less than the MAT. The amount of tax paid under the said section is allowed to be carried
forward and set off against tax payable up to the tenth assessment year immediately succeeding the
assessment year in which the tax credit becomes allowable under the provisions of section 115JAA.
It is proposed to amend this section to increase the rate of MAT to eighteen and one-half per cent.
from the existing rate of eighteen per cent. of such book profit.
This amendment will take effect from 1st April, 2012 and will, accordingly, apply in relation to the
assessment year 2012-13 and subsequent years.
6 Re: CORPORATE TAXES IN INDIA on 20th April 2012, 10:49 pm
rchgiri
CSoC Super Master
Dear All,
With the help of fundamental understanding of Income Tax Act 1961, it is very easy to score 60 % to 75 % marks in Tax Laws Papers in CS Exe & CS PP. Most of the questions are repetative in nature but their answers are differenet as per the relevant Assessment Years. Hence while answering questions in tax papers, the students are required to mention
1) the name of the asseessee
2) the asseessment year &
3) the financial year
For Asseessment Year 2012-13 & Finacial Year 2011-12
Company taxes are levied as follows:
Tax Rates>>>>>>>>>> Upto Rs. 1 Crore>>>>Above Rs. 1 Crore
Domestic companies: 30.90%(30%+3%Cess) 32.445%(30%+3%Cess+5%SC)[Not 33.22%]
Foreign companies: 41.20%(40%+3%Cess) 42.024%(40%+3%Cess+2%SC) [Not 42.23%]
MAT Rates>>>>>>>>>> Upto Rs. 1 Crore>>>>>>Above Rs. 1 Crore
Domestic companies: 19.055%(18.5%+3%Cess) 22.007%(18.5%+3%Cess+5%SC)
Foreign companies: 19.055%(18.5%+3%Cess)19.436%(18.5%+3%Cess+2%SC)
Dividend Distribution Tax Rates
Domestic companies: 16.2225%(15%+3%Cess+5%SC)
With the help of fundamental understanding of Income Tax Act 1961, it is very easy to score 60 % to 75 % marks in Tax Laws Papers in CS Exe & CS PP. Most of the questions are repetative in nature but their answers are differenet as per the relevant Assessment Years. Hence while answering questions in tax papers, the students are required to mention
1) the name of the asseessee
2) the asseessment year &
3) the financial year
For Asseessment Year 2012-13 & Finacial Year 2011-12
Company taxes are levied as follows:
Tax Rates>>>>>>>>>> Upto Rs. 1 Crore>>>>Above Rs. 1 Crore
Domestic companies: 30.90%(30%+3%Cess) 32.445%(30%+3%Cess+5%SC)[Not 33.22%]
Foreign companies: 41.20%(40%+3%Cess) 42.024%(40%+3%Cess+2%SC) [Not 42.23%]
MAT Rates>>>>>>>>>> Upto Rs. 1 Crore>>>>>>Above Rs. 1 Crore
Domestic companies: 19.055%(18.5%+3%Cess) 22.007%(18.5%+3%Cess+5%SC)
Foreign companies: 19.055%(18.5%+3%Cess)19.436%(18.5%+3%Cess+2%SC)
Dividend Distribution Tax Rates
Domestic companies: 16.2225%(15%+3%Cess+5%SC)
7 Re: CORPORATE TAXES IN INDIA on 21st April 2012, 12:11 pm
j.padiya
CSoC Well-Wisher
thank u so much sir for proper and correct guidelines.
keep guiding us.
keep guiding us.
8 Re: CORPORATE TAXES IN INDIA on 11th September 2012, 7:14 pm
rafiq
thanks
9 Re: CORPORATE TAXES IN INDIA on 18th September 2012, 11:47 am
mione
CSoC Master
THANX
10 Re: CORPORATE TAXES IN INDIA on 18th September 2012, 11:48 am
Soundharya
CSoC Master
Thank you Ramesh Sir..
11 Re: CORPORATE TAXES IN INDIA on 18th September 2012, 12:11 pm
rchgiri
CSoC Super Master
Dear Friends,
Please find the following link of ICAI
http://www.icai.org/post.html?post_id=7633
for the preparation of both CS Executive & Professional December 2012 Examination.
Have a happy learning.
Please find the following link of ICAI
http://www.icai.org/post.html?post_id=7633
for the preparation of both CS Executive & Professional December 2012 Examination.
Have a happy learning.
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