Tax rates under the regular tax regime for the assessment years 2023-24 and 2024-25 are given in Annex 1. Tax rates under the alternative tax regime under section 115BA/115BAA/115BAB/115BAC/115BAD/115BAE are given in paras 531 to 559. Alternative tax regime is optional [one has to exercise the option under section 115BA(4)/115BAA(5)/115BAB(7)/115BAC(5)/115BAD(5)/115BAE(5) to avail the benefit of alternative tax regime]. However, in the case of an individual/HUF/AOP/BOI/artificial juridical person, the alternate tax regime is the default tax regime from the assessment year 2024-25 [one has to exercise the option under section 115BAC(6) to avail the benefit of the regular tax regime].
The following are income-tax rates for the assessment years 2023-24 and 2024-25:
Tax rates pertaining to these assessees are as follows:
1. Senior citizen: Senior citizen is a resident individual who is at least 60 years of age at any time during the previous year but less than 80 years on the last day of previous year [assessment year 2023-24 (date of birth: on or after April 2, 1943 but before April 2, 1963) or assessment year 2024-25 (date of birth: on or after April 2, 1944 but before April 2, 1964)].
In the case of a senior citizen, exemption limit is Rs. 3,00,000 1 . Net income in the range of Rs. 3,00,000 to Rs. 5,00,000 is taxable at the rate of 5 per cent. Between Rs. 5,00,000 and Rs. 10,00,000, the slab rate is 20 per cent and the income exceeding Rs. 10,00,000 is taxable at the rate of 30 per cent. These rates are applicable only in the case of a resident (ordinarily or otherwise) senior citizen. In the case of a non-resident senior citizen, the exemption limit is Rs. 2,50,000 as given below.
2. Super senior citizen: A super senior citizen is a resident individual who is at least 80 years of age at any time during the previous year [assessment year 2023-24 (date of birth: before April 2, 1943) or assessment year 2024-25 (date of birth: before April 2, 1944)].
In the case of super senior citizen, first Rs. 5,00,000 of net income is exempt from tax. Net income in the range of Rs. 5,00,000 to Rs. 10,00,000 is taxable at the rate of 20 per cent. Net income exceeding Rs. 10,00,000 is taxable at the rate of 30 per cent. These rates are applicable only in the case of a resident (ordinarily or otherwise) super senior citizen. In the case of a non-resident, the exemption limit will be Rs. 2,50,000 as given below.
3. Any other individual, any HUF/AOP/BOI – This category includes the following taxpayers –
In case of any of these assessees, first Rs. 2,50,000 1 of net income is exempt from tax. Net income in the range of Rs. 2,50,000 to Rs. 5,00,000 is taxable at the rate of 5 per cent. On net income between Rs. 5,00,000 and Rs. 10,00,000, the slab rate is 20 per cent and income exceeding Rs. 10,00,000 is taxable at the rate of 30 per cent.
Section 115BAC(1) – Assessment year 2023-24 | Section 115BAC(1A) – Assessment year 2024-25 | ||
Total income | Rate of tax | Total income | Rate of tax |
Up to Rs. 2,50,000 | Nil | Up to Rs. 3,00,000 | Nil |
From Rs. 2,50,001 to Rs. 5,00,000 | 5 per cent 1 | From Rs. 3,00,001 to Rs. 6,00,000 | 5 per cent 3 |
From Rs. 5,00,001 to Rs. 7,50,000 | 10 per cent | From Rs. 6,00,001 to Rs. 9,00,000 | 10 per cent 3 |
From Rs. 7,50,001 to Rs. 10,00,000 | 15 per cent | From Rs. 9,00,001 to Rs. 12,00,000 | 15 per cent |
From Rs. 10,00,001 to Rs. 12,50,000 | 20 per cent | From Rs. 12,00,001 to Rs. 15,00,000 | 20 per cent |
From Rs. 12,50,001 to Rs. 15,00,000 | 25 per cent | Above Rs. 15,00,000 | 30 per cent |
Above Rs. 15,00,000 | 30 per cent |
There is no change in the tax rate. A partnership firm (including a limited liability partnership firm) is taxable at the rate of 30 per cent.
A domestic company is taxable at the rate of 30 per cent and a non-domestic company is taxable at the rate of 40 per cent. Different rates are, however, applicable in the following cases–
In the case of a co-operative society/local authority, there is no change in the income-tax rates. These rates are given in para 0.1-4, Annex 1.
Applicable surcharge (as a percentage of income-tax) for the assessment years 2023-24 and 2024-25 is as follows 3a –
Net income range | Surcharge as a % of income-tax | ||
Individuals/HUF/AOP/BOI/artificial juridical person | 0 – Rs. 50 lakh | Nil | |
Rs. 50 lakh – Rs. 1 crore | 10% | ||
Rs. 1 crore – Rs. 2 crore | 15% | ||
Rs. 2 crore – Rs. 5 crore | 25% | [see para 1.2.1] | |
Above Rs. 5 crore | 37% | [see para 1.2.2] | |
Firm/local authority | 0 – Rs. 1 crore | Nil | |
Above Rs. 1 crore | 12% | ||
Co-operative society | 0 – Rs. 1 crore | Nil | [see para 1.2.3] |
Rs. 1 crore – Rs. 10 crore | 7% | [see para 1.2.3] | |
Above Rs. 10 crore | 12% | [see para 1.2.3] | |
Domestic company | 0 – Rs. 1 crore | Nil | [see para 1.2.2] |
Rs. 1 crore – Rs. 10 crore | 7% | [see para 1.2.2] | |
Above Rs. 10 crore | 12% | [see para 1.2.2] | |
Foreign company | 0 – Rs. 1 crore | Nil | |
Rs. 1 crore – Rs. 10 crore | 2% | ||
Above Rs. 10 crore | 5% |
Note – The above surcharge is subject to a marginal relief.
Surcharge for the assessment years 2023-24 and 2024-25 3a is as follows –
Different situations | Nature and quantum of income of the assessee (i.e., individual, HUF, AOP, BOI or an artificial juridical person) | Surcharge on amount of income-tax computed on dividend income and income which is taxable under section 111A/112/112A | Surcharge on amount of income-tax computed on other incomes |
Situation 1 | Total income (including dividend income and income under section 111A/112/112A) does not exceed Rs. 50 lakh | Nil | Nil |
Situation 2 | Total income (including dividend income and income under section 111A/112/112A) exceeds Rs. 50 lakh but does not exceed Rs. 1 crore | 10% | 10% |
Situation 3 | Total income (including dividend income and income under section 111A/112/112A) exceeds Rs. 1 crore but does not exceed Rs. 2 crore | 15% | 15% |
Situation 4 | Total income (excluding dividend income and income under section 111A/112/112A) exceeds Rs. 2 crore but does not exceed Rs. 5 crore | 15% | 25% |
Situation 5 | Total income (excluding dividend income and income under section 111A/112/112A) exceeds Rs. 5 crore | 15% | 37% |
Situation 6 | Total income (including dividend income and income under section 111A/112/112A) exceeds Rs. 2 crore (but it is not covered by Situation 4 and Situation 5) | 15% | 15% |
Where the total income includes any dividend income and/or income chargeable under section 111A/112/112A the rate of surcharge on the amount of income-tax computed on that part of income, shall not exceed 15 per cent. Moreover, in the case of an AOP (consisting of only companies as its members), the rate of surcharge on the amount of income-tax shall not exceed 15 per cent. Further, in the case of an individual/HUF/AOP/BOI/artificial juridical person, surcharge (if tax is payable under the alternative tax regime) cannot exceed 25 per cent for the assessment year 2024-25.
It has been clarified by CBDT that the derivatives (future and options) are not treated as capital assets and the income arising from the transfer of the derivatives is treated as business income and is liable for normal rate of tax (and such case will fall in the 4th column of the above table). However, in the case of Foreign Institutional Investors (FPI), the derivatives are treated as capital assets and the gains arising from the transfer of the same are treated as capital gains and are subject to a special rate of tax as per the provisions of section 115AD. Consequently, surcharge on income-tax payable on gains arising from the transfer of derivatives (future and options) by FPI which are liable to special rate of tax under section 115AD, cannot exceed 15 per cent (it will fall under 3rd column of the aforesaid table).
In the case of a domestic company which has opted for the alternative tax regime under section 115BAA or 115BAB, surcharge is 10 per cent of income-tax for the assessment years 2023-24 and 2024-25 (regardless of quantum of income) 3a .
In the case of a resident co-operative society which has opted for the alternative tax regime under section 115BAD or section 115BAE, surcharge is 10 per cent of income-tax for the assessment years 2023-24 and 2024-25 (regardless of quantum of income) 3a .
For the assessment years 2023-24 and 2024-25, health and education cess (HEC) is 4 per cent of income-tax and surcharge 3a .
A corporate-assessee is covered by minimum alternate tax under section 115JB. A non-corporate assessee is covered by alternate minimum tax under section 115JC. However, minimum alternate tax/alternate minimum tax is not applicable if tax is payable under the alternative tax regime under section 115BAA/115BAB/115BAC/115BAD/115BAE.
Adjusted total income/book profit range | Individuals/HUF/AOP/BOI/artificial juridical person | Firm/local authority | Co-operative society | Domestic company | Foreign company |
0 – Rs. 50 lakh | Nil | Nil | Nil | Nil | Nil |
Rs. 50 lakh – Rs. 1 crore | 10% | Nil | Nil | Nil | Nil |
Rs. 1 crore – Rs. 2 crore | 15% | 12% | 7% | 7% | 2% |
Rs. 2 crore – Rs. 5 crore | 25% | 12% | 7% | 7% | 2% |
Rs. 5 crore – Rs. 10 crore | 37% | 12% | 7% | 7% | 2% |
Above Rs. 10 crore | 37% | 12% | 12% | 12% | 5% |
Notes –
The provisions pertaining to marginal relief are given below –
If the net income exceeds Rs. 50 lakh, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a net income of Rs. 50 lakh by more than the amount of income that exceeds Rs. 50 lakh.
If net income of these taxpayers exceeds Rs. 1 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on net income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
If net income of these taxpayers exceeds Rs. 2 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on net income of Rs. 2 crore by more than the amount of income that exceeds Rs. 2 crore.
If net income of these taxpayers exceeds Rs. 5 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on net income of Rs. 5 crore by more than the amount of income that exceeds Rs. 5 crore.
If the net income exceeds Rs. 1 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a net income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
To avoid hardship, in the case of a company/co-operative society whose income is slightly higher than Rs. 1 crore, a provision has been made to provide for relief in marginal cases. The said relief is as follows –
If the net income exceeds Rs. 1 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a net income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
If the net income of a company/co-operative society exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on net income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.
Marginal relief will be applicable in case net income falls in the following range –
Regular Tax Regime (Assessment Year 2023-24/2024-25) | |
Income range to attract marginal relief | |
Resident senior citizen | Rs. 50 lakh – Rs. 51.9552 lakh |
Rs. 100 lakh – Rs. 102.145 lakh | |
Rs. 200 lakh – Rs. 209.296 lakh | |
Rs. 500 lakh – Rs. 530.173 lakh | |
Resident super senior citizen | Rs. 50 lakh – Rs. 51.9402 lakh |
Rs. 100 lakh – Rs. 102.1374 lakh | |
Rs. 200 lakh – Rs. 209.28 lakh | |
Rs. 500 lakh – Rs. 530.1528 lakh | |
Any other resident individual, any non-resident individual, any HUF or any AOP/BOI/artificial juridical person | Rs. 50 lakh – Rs. 51.9589 lakh |
Rs. 100 lakh – Rs. 102.1469 lakh | |
Rs. 200 lakh – Rs. 209.30 lakh | |
Rs. 500 lakh – Rs. 530.1782 lakh | |
Firm | Rs. 100 lakh – Rs. 105.4216 lakh |
Domestic company (tax rate: 25%) | Rs. 100 lakh – Rs. 102.389 lakh |
Rs. 1000 lakh – Rs. 1017.3611 lakh | |
Domestic company (tax rate: 30%) | Rs. 100 lakh – Rs. 103.0927 lakh |
Rs. 1000 lakh – Rs. 1022.59030 lakh | |
Foreign company | Rs. 100 lakh – Rs. 101.3513 lakh |
Rs. 1000 lakh – Rs. 1020.6896 lakh | |
Alternative Tax Regime (Assessment Year 2024-25) – | |
Individual, HUF, AOP, BOI or artificial juridical person | Rs. 50 lakh – Rs. 51.791 lakh |
Rs. 100 lakh – Rs. 102.061 lakh | |
Rs. 200 lakh – Rs. 209.12 lakh |
Note: The above net income ranges will remain valid only if the assessee does not have any income which is chargeable to tax at special rate(s) of tax (e.g., long-term capital gains, short-term capital gains under section 111A, lottery income, etc.).
In the case of alternate minimum tax/minimum alternate tax, the marginal relief will be applicable in case adjusted total income/book profit falls in the following range for the assessment years 2023-24 and 2024-25 –
Income range | |
Individual/HUF/AOP/BOI/artificial juridical person | Rs. 50 lakh – Rs. 51.16133 lakh |
Rs. 100 lakh – Rs. 101.174976 lakh | |
Rs. 200 lakh – Rs. 204.813 lakh | |
Rs. 500 lakh – Rs. 514.8684 lakh | |
Co-operative society/firm/local authority | Rs. 100 lakh – Rs. 102.8002 lakh |
Domestic company | Rs. 100 lakh – Rs. 101.2507 lakh |
Rs. 1000 lakh – Rs. 1009.0144 lakh | |
Foreign company | Rs. 100 lakh – Rs. 100.35419 lakh |
Rs. 1000 lakh – Rs. 1005.3412 lakh |
Maximum marginal tax rates (at highest level) for the assessment years 2023-24 and 2024-25 are given in the table below –
Individual/HUF/BOI/AOP/artificial juridical person (in any case except the case given below) | 42.744% |
Individual/HUF/BOI/AOP/artificial juridical person (alternative tax regime/AY 2024-25) | 39% |
Firm (including limited liability partnership) | 34.944% |
Co-operative society | 34.944% |
Domestic company | 29.12%, 34.944% |
Foreign company | 43.68% |
During the financial year 2023-24, tax will be deducted at source under section 192/194P at the rate given in para 0.1-1, Annex 1. TDS rates for payments other than salary are given in para 0.6 of Annex 1. TCS rates are given in para 0.7 of Annex 1.
For the financial year 2023-24, these rates are as follows –
TDS/TCS | Nature of payment | Recipient/Collectee | Whether health and education cess @ 4% applicable | Whether surcharge applicable | |
TDS | Salary (or payment covered by section 194P) | Resident/non-resident | Yes | Yes | Note 1 |
TDS | Other than above | Resident | No | No | |
TDS | Other than above | Non-resident/foreign company | Yes 3a | Yes 3a | Note 2 |
TCS | Any | Resident | No | No | |
TCS | Any | Non-resident/foreign company | Yes 3a | Yes 3a | Note 3 |
Notes –
Example 1: X (41 years) is a resident individual. His net income for the assessment year 2023-24 or 2024-25 is Rs. 5,30,00,000 (Situation 1), or Rs. 5,31,00,000 (Situation 2). X does not want to pay tax within the parameters of the alternative tax regime under section 115BAC.
Example 2: X Find out the tax liability in the cases given below for the assessment year 2023-24 or 2024-25 [these taxpayers do not want to opt for (or pay tax under) the alternative tax regime under section 115BAC] –
Different taxpayers | Dividend | Capital gain under sections – | Other incomes | Total | ||
111A | 112 | 112A | ||||
Rs. | Rs. | Rs. | Rs. | Rs. | Rs. | |
X (46 years) resident | – | 6,00,000 | 3,00,000 | 7,00,000 | 59,00,000 | 75,00,000 |
Y (62 years) resident | – | 8,00,000 | 2,00,000 | 14,00,000 | 1,56,00,000 | 1,80,00,000 |
Z (24 years) resident | 13,00,000 | 3,00,000 | 1,00,000 | 2,00,000 | 3,34,00,000 | 3,53,00,000 |
A (52 years) resident | 49,00,000 | 1,00,000 | 2,00,000 | 8,00,00,000 | 6,59,00,000 | 15,11,00,000 |
B (41 years) resident | – | 1,00,00,000 | 68,00,000 | 2,00,000 | 70,00,000 | 2,40,00,000 |
C (40 years) resident | – | 7,00,00,000 | 1,90,00,000 | – | 60,00,000 | 9,50,00,000 |
D (32 years) resident | – | 80,000 | 10,000 | 5,10,000 | 48,00,000 | 54,00,000 |
E (64 years) non-resident | – | 4,10,000 | 1,70,000 | 1,20,000 | 97,00,000 | 1,04,00,000 |
F (28 years) resident | – | 39,00,000 | 3,00,000 | 70,000 | 6,00,000 | 48,70,000 |
G (59 years) resident | – | – | – | 6,01,00,000 | 9,00,000 | 6,10,00,000 |
Assume that in the aforesaid cases, applicable tax rate under section 112 is 20 per cent.
Tax liability in the case of X – Total income of X (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 50 lakh but does not exceed Rs. 1 crore. It is covered by Situation 2. Applicable surcharge in this case is 10% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A as well as other incomes). Tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 90,000 | 60,000 | 60,000 | 15,82,500 | 17,92,500 |
Surcharge | 9,000 | 6,000 | 6,000 | 1,58,250 | 1,79,250 |
Income-tax and surcharge | 99,000 | 66,000 | 66,000 | 17,40,750 | 19,71,750 |
Health and education cess (@ 4% of income-tax and surcharge) | 3,960 | 2,640 | 2,640 | 69,630 | 78,870 |
Tax liability | 1,02,960 | 68,640 | 68,640 | 18,10,380 | 20,50,620 |
Tax liability in the case of Y – Total income of Y (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 1 crore but does not exceed Rs. 2 crore. It is covered by Situation 3. Applicable surcharge in this case is 15% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A as well as other incomes). Tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 1,20,000 | 40,000 | 1,30,000 | 44,90,000 | 47,80,000 |
Surcharge | 18,000 | 6,000 | 19,500 | 6,73,500 | 7,17,000 |
Income-tax and surcharge | 1,38,000 | 46,000 | 1,49,500 | 51,63,500 | 54,97,000 |
Health and education cess (@ 4% of income-tax and surcharge) | 5,520 | 1,840 | 5,980 | 2,06,540 | 2,19,880 |
Tax liability | 1,43,520 | 47,840 | 1,55,480 | 53,70,040 | 57,16,880 |
Tax liability in the case of Z – Total income of Z (excluding income taxable under sections 111A, 112 and 112A and dividend income) exceeds Rs. 2 crore but does not exceed Rs. 5 crore. It is covered by Situation 4. Applicable surcharge in this case is 15% on income-tax pertaining to income taxable under sections 111A, 112 and 112A and dividend income and 25% on other incomes. Tax liability will be as follows –
Tax liability in the case of A – Total income of A (excluding dividend income and income taxable under sections 111A, 112 and 112A) exceeds Rs. 5 crore. It is covered by Situation 5. Applicable surcharge in this case is 15% on income-tax pertaining to income taxable under sections 111A, 112 and 112A and dividend income and 37% on other incomes. Tax liability will be as follows –
Tax liability in the case of B – Total income of B (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 2 crore. It is not covered by Situation 1, 2 or 3. His total income (excluding income taxable under sections 111A, 112 and 112A) does not exceed Rs. 2 crore. Even Situations 4 and 5 are not applicable. Consequently, it is covered by Situation 6. Applicable surcharge in this case is 15% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A) and 15% on other incomes. Tax liability will be as follows:
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 15,00,000 | 13,60,000 | 10,000 | 19,12,500 | 47,82,500 |
Surcharge | 2,25,000 | 2,04,000 | 1,500 | 2,86,875 | 7,17,375 |
Income-tax and surcharge | 17,25,000 | 15,64,000 | 11,500 | 21,99,375 | 54,99,875 |
Health and education cess (@ 4% of income-tax and surcharge) | 69,000 | 62,560 | 460 | 87,975 | 2,19,995 |
Tax liability | 17,94,000 | 16,26,560 | 11,960 | 22,87,350 | 57,19,870 |
Tax liability in the case of C – Total income of C (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 5 crore. However, it is not covered by Situations 4 and 5. Consequently, Situation 6 is applicable. Surcharge in this case is 15% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A) and 15% on other incomes. Tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10%) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 1,05,00,000 | 38,00,000 | Nil | 16,12,500 | 1,59,12,500 |
Surcharge | 15,75,000 | 5,70,000 | Nil | 2,41,875 | 23,86,875 |
Income-tax and surcharge | 1,20,75,000 | 43,70,000 | Nil | 18,54,375 | 1,82,99,375 |
Health and education cess (@ 4% of income-tax and surcharge) | 4,83,000 | 1,74,800 | Nil | 74,175 | 7,31,975 |
Tax liability | 1,25,58,000 | 45,44,800 | Nil | 19,28,550 | 1,90,31,350 |
Tax liability in the case of D – Total income of D (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 50 lakh but does not exceed Rs. 1 crore. It is covered by Situation 2. Applicable surcharge in this case is 10% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A as well as other incomes). Tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 12,000 | 2,000 | 41,000 | 12,52,500 | 13,07,500 |
Surcharge | 1,200 | 200 | 4,100 | 1,25,250 | 1,30,750 |
Income-tax and surcharge | 13,200 | 2,200 | 45,100 | 13,77,750 | 14,38,250 |
Health and education cess (@ 4% of income-tax and surcharge) | 528 | 88 | 1,804 | 55,110 | 57,530 |
Tax liability (rounded off) | 13,728 | 2,288 | 46,904 | 14,32,860 | 14,95,780 |
Tax liability in the case of E – Total income of E (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 1 crore but does not exceed Rs. 2 crore. It is covered by Situation 3. Applicable surcharge in this case is 15% (on income-tax pertaining to income taxable under sections 111A, 112 and 112A as well as other incomes). He is non-resident. His tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 61,500 | 34,000 | 2,000 | 27,22,500 | 28,20,000 |
Surcharge | 9,225 | 5,100 | 300 | 4,08,375 | 4,23,000 |
Income-tax and surcharge | 70,725 | 39,100 | 2,300 | 31,30,875 | 32,43,000 |
Health and education cess (@ 4% of income-tax and surcharge) | 2,829 | 1,564 | 92 | 1,25,235 | 1,29,720 |
Tax liability (rounded off) | 73,554 | 40,664 | 2,392 | 32,56,110 | 33,72,720 |
Tax liability in the case of F – Total income of F (including income taxable under sections 111A, 112 and 112A) does not exceed Rs. 50 lakh. It is covered by Situation 1. Surcharge is not applicable in this case and tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112 (IT rate: 20%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | Rs. | |
Income-tax | 5,85,000 | 60,000 | Nil | 32,500 | 6,77,500 |
Surcharge | Nil | Nil | Nil | Nil | Nil |
Income-tax and surcharge | 5,85,000 | 60,000 | Nil | 32,500 | 6,77,500 |
Health and education cess (@ 4% of income-tax and surcharge) | 23,400 | 2,400 | Nil | 1,300 | 27,100 |
Tax liability | 6,08,400 | 62,400 | Nil | 33,800 | 7,04,600 |
Tax liability in the case of G – Total income of G (including income taxable under sections 111A, 112 and 112A) exceeds Rs. 5 crore. However, it is not covered by Situations 4 and 5. Consequently, Situation 6 is applicable. Surcharge in this case is 15% (on income-tax pertaining to section 112A as well as other incomes). Tax liability will be as follows –
Section 111A (IT rate: 15%) | Section 112A (IT rate: 10% on capital gain exceeding Rs. 1 lakh) | Other incomes | Total | |
Rs. | Rs. | Rs. | Rs. | |
Income-tax | – | 60,00,000 | 92,500 | 60,92,500 |
Surcharge | – | 9,00,000 | 13,875 | 9,13,875 |
Income-tax and surcharge | – | 69,00,000 | 1,06,375 | 70,06,375 |
Health and education cess (@ 4% of income-tax and surcharge) | – | 2,76,000 | 4,255 | 2,80,255 |
Tax liability | – | 71,76,000 | 1,10,630 | 72,86,630 |
Example 3: X (40 years) and Y (64 years) are resident individuals and report the following income pertaining to the assessment year 2023-24 or 2024-25 (these taxpayers do not want to pay tax under the alternative tax regime under section 115BAC) –
X | Y | |
Rs. | Rs. | |
Short-term capital gain under section 111A | 1,00,000 | 16,00,000 |
Long-term capital gain under section 112A | 5,00,000 | 14,00,000 |
Long-term capital gain under section 112 on transfer of plot of land | 4,00,000 | 8,00,000 |
Short-term capital gain on transfer of gold | 8,00,000 | 21,00,000 |
Other incomes (after claiming deduction under Chapter VI-A) | 4,98,00,000 | 5,11,00,000 |
Total | 5,16,00,000 | 5,70,00,000 |
Example 4: X Ltd. is a domestic company. Its turnover during the previous year 2021-22 was Rs. 398 crore. Net income of the company for the assessment year 2024-25 is Rs. 10.15 crore (Situation 1), or Rs. 10.20 crore (Situation 2). Minimum alternate tax is not applicable as book profit is Rs. 21,00,000. X Ltd. has not opted for the alternative tax regime under section 115BAA or section 115BAB.
Situation 1
Situation 2
Example 5: X Ltd. is a domestic company. The company has a manufacturing unit situated in Maharashtra. Turnover of the company in the previous year 2021-22 exceeded Rs. 400 crore. Income of the company for the assessment year 2024-25 is as follows (X Ltd. has not opted for the alternative tax regime under section 115BA or section 115BAA or section 115BAB) –
Situation 1 | Situation 2 | |
Rs. | Rs. | |
Income from manufacturing (computed under the Income-tax Act) | 1,04,00,000 | 1,01,00,000 |
Book profit | 10,08,00,000 | 10,10,00,000 |
Net income | 1,04,00,000 | 1,01,00,000 |
Income-tax | 31,20,000 | 30,30,000 |
Add: Surcharge @ 7% | 2,18,400 | 2,12,100 |
Income-tax and surcharge (a) | 33,38,400 | 32,42,100 |
Computation for marginal relief | ||
Step 1 – Income-tax if income is Rs. 1 crore | 30,00,000 | 30,00,000 |
Step 2 – Tax @ 100% of income in excess of Rs. 1 crore | 4,00,000 | 1,00,000 |
Tax under marginal relief computation (b) | 34,00,000 | 31,00,000 |
Normal tax or tax under marginal relief, whichever is lower [(a) or (b), whichever is lower] (c) | 33,38,400 | 31,00,000 |
Minimum alternate tax (under normal provisions) | ||
Tax on book profit of Rs. 10,08,00,000/Rs. 10,10,00,000 @ 15% | 1,51,20,000 | 1,51,50,000 |
Add: Surcharge @ 12% | 18,14,400 | 18,18,000 |
Tax on book profit and surcharge (d) | 1,69,34,400 | 1,69,68,000 |
Minimum alternate tax (under marginal relief) | ||
Tax on book profit if book profit is Rs. 10,00,00,000 [book profit @ 15% and surcharge @ 7%] | 1,60,50,000 | 1,60,50,000 |
Add: 100% of book profit in excess of Rs. 1,00,00,000 | 8,00,000 | 10,00,000 |
Total (e) | 1,68,50,000 | 1,70,50,000 |
Minimum alternate tax (including surcharge) after marginal relief [(d) or (e), whichever is lower] (f) | 1,68,50,000 | 1,69,68,000 |
Normal tax or minimum alternate tax, whichever is higher [(c) or (f), whichever is higher] | 1,68,50,000 | 1,69,68,000 |
Add: Health and education cess | 6,74,000 | 6,78,720 |
Tax liability of the company (g) | 1,75,24,000 | 1,76,46,720 |
Less: Tax liability, if minimum alternate tax is ignored [(c) + HEC] (h) | 34,71,936 | 32,24,000 |
Tax credit available under section 115JAA(2A) | 1,40,52,064 | 1,44,22,720 |
The following amendments have been made to the provisions of section 2.
Explanation 1 has been amended (with effect from the assessment year 2024-25) to provide that in the case of Electronic Gold Receipt or gold (being capital asset), the holding period for the purpose of capital gain shall include the period for which the gold or Electronic Gold Receipt, was held by the assessee prior to conversion into Electronic Gold Receipt or gold, as the case may be.
Section 9 specifies those incomes which are deemed to accrue or arise in India regardless of their actual place of accrual. The Finance (No. 2) Act, 2019 inserted clause (viii) to section 9(1) to provide that the any sum of money exceeding Rs. 50,000 received by a non-resident without consideration from a resident person (on or after July 5, 2019) shall be income deemed to accrue or arise in India. The amendment was made to check tax avoidance, as certain instances were observed where gifts were being made by persons residents in India to non-residents and were claimed to be non-taxable in India by such non-residents.
– Transfer of immovable property without consideration to a non-resident/not ordinarily resident.
– Transfer of immovable property for inadequate consideration to a non-resident/not ordinarily resident.
– Transfer of movable property without consideration to a non-resident/not ordinarily resident.
– Transfer of movable property for inadequate consideration to a non-resident/not ordinarily resident.
International Financial Services Centre Authority (Fund Management) Regulations, 2022 has come into force from May 19, 2022. To bring the reference of the said regulation, the definition of “specified fund” under section 10(4D) has been modified to include the reference of IFSCA (Fund Management) Regulations, 2022, with effect from the assessment year 2023-24.
Income of a non-resident is not taxable under section 10(4E) –
Under the ODI contract, the IFSC Banking Unit (IBU) makes the investments in permissible Indian securities. Income generated by the IBU on such investments is chargeable to tax as capital gains (i.e., referred to in section 111A/112/112A), interest and/or dividend within the parameters of section 115AD. After the payment of tax, the IBU passes such income to the holders of ODI. Presently, under section 10(4E) exemption is available only on the income generated on the transfer of ODIs and not on the distribution of income to the non-resident holders of ODI. Consequently, distributed income is taxed twice in India (i.e., first when received by the IBU and second, when the same income is distributed to non-resident holders of ODI.
Clause (4G) was inserted by the Finance Act, 2022 (with effect from the assessment year 2023-24) to provide exemption to any income received by a non-resident from portfolio of securities or financial products or funds, managed or administered by any portfolio manager on behalf of such non-resident. This exemption is available only if income arises in an account maintained with an Offshore Banking Unit in any International Financial Services Centre. However, the exemption is limited to the extent such income accrues or arises outside India and is not deemed to accrue or arise in India.
3a. Where the total income of a “specified fund” [as referred to section 10(4D)] includes any income in respect of securities [as given under section 115AD(1)(a)], the rate of surcharge/health and education cess is nil (for the assessment year 2024-25).
3a. Where the total income of a “specified fund” [as referred to section 10(4D)] includes any income in respect of securities [as given under section 115AD(1)(a)], the rate of surcharge/health and education cess is nil (for the assessment year 2024-25).
3a. Where the total income of a “specified fund” [as referred to section 10(4D)] includes any income in respect of securities [as given under section 115AD(1)(a)], the rate of surcharge/health and education cess is nil (for the assessment year 2024-25).
3a. Where the total income of a “specified fund” [as referred to section 10(4D)] includes any income in respect of securities [as given under section 115AD(1)(a)], the rate of surcharge/health and education cess is nil (for the assessment year 2024-25).
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