Tax on Total Income of A Company is assessed like any other Assessee. However, its liability differs in two respects :
- No Exemption Limit : A Company does not enjoy any Exemption Limit.
- Rates of Tax : A Company pays Income Tax at a Flat Rate instead of Slab Rate.
(1) Normal Rate of Tax of a Domestic Company
| If the comp any opts to be taxed as per the old regime | If the company opts to be taxed under the new regime i.e. U/s 115BAA provided it satisfies the conditions of section 115BAA(2) |
If the company is a new manufacturing company and it opts to be taxed U/s 115BAB(2) provided ii satisfies the conditions of section 115BAB(2) | ||||||
|
22% | 15% |
| Surcharge | Surcharge | Surcharge |
| Surcharge at the rate of 7% shall be levied in case of a domestic company, if the total income of the domestic company exceeds Rs.1 crore but does not exceed Rs. 10 crore. Surcharge @ 12% shall he levied, if the total income of the domestic company exceeds Rs.10 crore. | 10%
(irrespective of the fact whether the total income is less than or more than Rs.1 crore) |
10%
(irrespective of the fact whether the total income is less than or more than Rs.1 crore) |
| Marginal Relief | Marginal Relief | Marginal Relief |
| However, the total amount payable as income-tax and surcharge on total income exceeding Rs.1 Crore but not exceeding Rs. 10 crore, shall not exceed the total amount payable as income-tax on a total income of Rs. 1 crore, by more than the amount of income that exceeds Rs.1 crore. The total amount payable as income-tax and surcharge on total income exceeding Rs.10 crore, shall not exceed the total amount payable as income-tax and surcharge on a total income of Rs. 10 crore, by more than the amount of income that exceeds Rs. 10 crore. | Not Applicable | Not Applicable |
| Cess | Cess | Cess |
| ‘Health and Education Cess’ @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied, | ‘Health and Education Cess on Income Tax’ and surcharge @ 4% shall be levied, | ‘Health and Education Cess on Income Tax’ and surcharge @ 4% shall be levied. |
(2) Normal Rate of Tax in Case of a Foreign Company:
On whole of the income – 40%
Surcharge on Income Tax:
In case of companies other than domestic companies, the surcharge of 2% shall be levied if the total income exceeds I crore but does not exceed Rs. 10 crore.
The surcharge at the rate of 5% shall be levied if the total income of the company other than domestic company exceeds Rs. 10 crore.
Marginal Relief on Income Tax:
However, the total amount payable as income-tax and surcharge on total income exceeding I crore but not exceeding Rs. 1 Crore, shall not exceed the total amount payable as income Tax on a total income of Rs. 1 crore, by more than the amount of income that exceeds Rs.1 crore. The total amount payable as income-tax and surcharge on total income exceeding Rs. 10 crore, shall not exceed the total amount payable as income-tax and surcharge on a total income of Rs. 10 crore, by more than the amount of income that exceeds Rs. 10 crore.
Cess on Income Tax:
‘Health and Education Cess’ @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied.
(3) Special Rates of Income Tax
| Rate of Tax | |
| 1. Short-term capital gain referred to in section 111A on equity shares in a company or units of an equity oriented fund where the transaction is chargeable to securities transaction tax | 15% |
| 2. Tax on long-term capital gains as per section 112 (where the long-term capital gain is covered by section 115AB, 115AC or 115AD or there is a long-term capital gain to non-resident from unlisted securities subject to certain conditions, it is taxable at 10%) |
20% |
| 3. Tax on long-term capital gains arising from transfer of long-term capital assets, being equity shares of a company or a unit of equity oriented fund or a unit of business trusts on which STT has been paid | 10% |
| 4. Tax on winnings from lotteries, cross word puzzles, races including horse races, etc. | 30% |
| 5. Tax on income by way of dividends declared, distributed or paid by a specified foreign company [Section 115BBD] | 15% |
| 6. Tax on income from transfer of carbon credits | 10% |
