Here, we are at the final part of the Income Tax rates trilogy!!
In this part we will cover the tax rates prevalent to Domestic & Foreign companies with applicable surcharge & cess. We will also cover the special rates available to domestic companies apart from regular tax rate.
However, it is pertinent to note that if any company earns a penny of income from its business, then, it will have to pay taxes as per the prescribed rates unlike some other assessee's where taxes are levied after crossing the threshold limit.
Also read: Income Tax rates for FY 2021-22 Part I
Tax Rates for Domestic Companies:
- Section 115BA: This option can be availed by certain domestic manufacturing companies who have been registered on or after the 1st day of March 2016.
- Section 115BAA: This privileged tax rate can be opted by certain domestic companies.
- Section 115BAB: This option can be availed by certain domestic manufacturing companies who have been registered on or after the 1st day of October 2019 but have started there manufacturing within 31st day of March 2023.
Note: All the above mentioned special rates are subject to certain terms & conditions upon fulfilment of which the asseseee can pay taxes at lower rates. If the conditions are not satisfied, then, the option of availing special rates of tax shall be treated as invalid and tax shall be computed as per serial number 5 above.
The following rates of surcharge shall be applicable along with the above mentioned taxes:
Health & Education Cess (HEC) shall be applicable @ 4% on income tax plus surcharge above.
Tax Rates for Foreign Companies:
- A foreign company is liable to pay tax @ 40% of the taxable income.
- Surcharge shall be added on tax at:
- 2% on income >1 crore but <= 10 crores.
- 5% on income > 10 crores.
- Health & Education Cess (HEC) @ 4% shall be applicable on tax plus surcharge.
Disclaimer: These are just basic concepts. However, the applicability of the law shall depend on case to case basis.
Thank you for reading!!
Comments
Post a Comment