Assessment Year 2016-2017
There is no change in the basic tax rate and exemption limit for Individual, Hindu Undivided Family, Association of Person, Body Of Individuals and Artificial Juridical Person in Assessment Year 2016-17 in Comparison to A.Y. 2015-16.
Further There is no change in basic tax rate of Co-operative Society, Firms, Local Authorities and Companies. However, it is proposed to reduce the basic tax rate in the case of Companies from 30% to 25% over the next four years, starting from next financial year i.e. FY 2016-17.
There is change in Surcharge which is as under :
| Person | Present Surcharge Rate | Proposed Surcharge Rate |
| Other than Company – | ||
| – Having Total Income exceeding Rs. 1 crore | 10% | 12% |
| Domestic Company‑ | ||
| – Having Total Income exceeding Rs. 1 crore but less than Rs. 10 crore | 5% | 7% |
| – Having Total Income exceeding Rs. 10 crore | 10% | 12% |
| Foreign Company‑ | ||
| – Having Total Income exceeding Rs. 1 crore but less than Rs. 10 crore | 2% | 2% |
| – Having Total Income exceeding Rs. 10 crore | 5% | 5% |
There is no change in the rate of Education Cess and Secondary & Higher Education Cess on Income Tax and accordingly rate of 2% and 1% respectively on the amount of tax computed inclusive of surcharge, wherever applicable would be applied in all cases.
A. Normal tax rates applicable to an individual
The normal tax rates applicable to a resident individual will depend on the age of the individual. However, in case of a non-resident individual the tax rates will be same irrespective of his age. For the purpose of ascertainment of the applicable tax slab, an individual can be classified as follows:
- Resident individual below the age of 60 years. i.e. born on or after 1.4.1956
- Resident individual of the age of 60 years or above at any time during the year but below the age of 80 years. (i.e. born during 1-4-1936 to 3 1-3-1956)
- Resident individual of the age of 80 years or above at any time during the year. i.e. born before 1.4.1936
- Non-resident individual irrespective of the age.
i. individual below the age of 60 years i.e. born on or after 1.4.1956, Non-resident individual irrespective of age, Resident/Non-Resident Hindu undivided family, association of persons, body of individuals, artificial juridical person.
Tax Slab
| Net income range | Income-tax rates | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 2,50,000 | Nil | Nil | Nil |
| Rs. 2,50,000 – Rs. 5,00,000 | 10% of (total income minusRs. 2,50,000) [*] | 2% of income-tax | 1% of income-tax |
| Rs. 5,00,000 – Rs. 10,00,000 | Rs. 25,000 + 20% of (total income minus Rs. 5,00,000) | 2% of income-tax | 1% of income-tax |
| Above Rs. 10,00,000 | Rs. 1,25,000 + 30% of (total income minus Rs. 10,00,000) | 2% of income-tax | 1% of income-tax |
Tax Rate After Considering Surcharge# and Cess Based on Income Level-
| Particulars | Income Level | ||||
| Taxable Income | Rs. 2,50,000 | Rs. 2.50 Lakh to 5 Lakh | Rs. 5 Lakh to Rs. 10 Lakh | Rs. 10 Lakh to Rs. 1 Crore | Above Rs. 1 Crore |
| F.Y. 2014-15 | Nil | 10.30% | 20.60% | 30.90% | 33.99% |
| F.Y 2015-16 | Nil | 10.30% | 20.60% | 30.90% | 34.608% |
(ii) In the case of every individual, being a resident in India, who is of the age of sixty years or more but less than eighty years at any time during the previous year i.e. born during 1.4.1936 to 31.3.1956
| Net income range | Income-tax rates | Education Cess | Secondary and higher Education Cess |
| Up to Rs. 3,00,000 | Nil | Nil | Nil |
| Rs. 3,00,000 – Rs. 5,00,000 | 10% of (total incomeminus Rs. 3,00,000) [*] | 2% of income- tax | 1% of income-tax |
| Rs. 5,00,000 – Rs. 10,00,000 | Rs. 20,000 + 20% of (total income minus Rs. 5,00,000) | 2% of income- tax | 1% of income-tax |
| Above Rs. 10,00,000 | Rs. 1,20,000 + 30% of (total income minus Rs. 10,00,000) | 2% of income- tax | 1% of income-tax |
Tax Rate After Considering Surcharge# and Cess Based on Income Level-
| Particulars | Income Level | ||||
| Taxable Income | Rs. 3 lakh | Rs. 3 Lakh to Rs. 5 Lakh | Rs. 5 Lakh to Rs. 10 Lakh | Rs. 10 Lakh to Rs. 1 Crore | Above Rs. 1 Crore |
| F.Y. 2014-15 | Nil | 10.30% | 20.60% | 30.90% | 33.99% |
| F.Y 2015-16 | Nil | 10.30% | 20.60% | 30.90% | 34.608% |
(iii) in the case of every individual, being a resident in India, who is of the age of eighty years or more at anytime during the previous year i.e. born before 1.4.1936
| Net income range | Income-tax rates | Education Cess | Secondary and
higher Education
Cess |
| Up to Rs. 5,00,000 | Nil | Nil | Nil |
| Rs. 5,00,000 – Rs. 10,00,000 | 20% of (total incomeminus Rs. 5,00,000) | 2% of income- tax | 1% of income-tax |
| Above Rs. 10,00,000 | Rs. 1,00,000 + 30% of (total income minus Rs. 10,00,000) | 2% of income- tax | 1% of income-tax |
Tax Rate After Considering Surcharge# and Cess Based on Income Level-
| Particulars | Income Level | |||
| Taxable Income | Rs. 5 Lakh | Rs. 5 Lakh to Rs. 10 Lakh | Rs. 10 Lakh to Rs. 1 Crore | Above Rs. 1 Crore |
| F.Y. 2014-15 | Nil | 20.60% | 30.90% | 33.99% |
| F.Y 2015-16 | Nil | 20.60% | 30.90% | 34.608% |
#Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds Rs. 1 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the amount of income-tax plus surcharge.
However, marginal relief is available from surcharge in such a manner that in the case of a person having a net income exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
AMT: In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 1 15JC. For provisions relating to AMT refer tutorial on “MAT/AMT” in tutorial section.
[*] A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 2,000, whichever is less.
B. Co-operative Societies
In the case of co-operative societies, the rates of income-tax have been specified in Paragraph B of Part III of the First Schedule to the Bill. These rates will continue to be the same as those specified for financial year 2014-15.
The amount of income-tax shall be increased by a surcharge at the rate of twelve percent of such income-tax in case of a co-operative society having a total income exceeding one crore rupees .
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.
Income Tax Rate Chart In case of Co- Operative Societies for Financial year 2015-16
| Particulars | Income Level | |||
| Taxable Income | Up to Rs. 10,000 | Rs. 10,000 Rs. to Rs. 20,000 | Rs. 20,000 to Rs. 1 Crore | Above 1 Crore |
| F.Y. 2014-15 | 10.30% | 20.60% | 30.90% | 33.99% |
| F.Y 2015-16 | 10.30% | 20.60% | 30.90% | 34.608% |
C. Partner ship Firms /Limited Liability Partnerships
In the case of firms, the rate of income-tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for financial year 2014-15 i.e. 30%.
The amount of income-tax shall be increased by a surcharge at the rate of twelve percent of such income-tax in case of a firm having a total income exceeding one crore rupees .
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
In the case of a non-corporate taxpayers to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.
Income Tax Rate Chart In case of Firms/LLP for Financial year 2015-16
| Particulars | Income Level | ||
| Taxable Income | Upto 1 Crore | 1 Crore to 10 Crore | Above 10 Crore |
| F.Y. 2014-15 | 30.90% | 33.99% | 33.99% |
| F.Y. 2015-16 | 30.90% | 34.608% | 34.608% |
D. Local authorities
The rate of income-tax in the case of every local authority is specified in Paragraph D of Part III of the First Schedule to the Bill. This rate will continue to be the same as that specified for the financial year 2014-15 i.e. 30% of taxable income..
The amount of income-tax shall be increased by a surcharge at the rate of twelve percent. of such income-tax in case of a local authority having a total income exceeding one crore rupees.
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
AMT : In the case of a non-corporate taxpayer to whom the provisions of Alternate Minimum Tax (AMT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “adjusted total income” computed as per section 115JC.
Income Tax Rate Chart In case of Local authorities for Financial year 2015-16
| Particulars | Income Level | ||
| Taxable Income | Upto 1 Crore | 1 Crore to 10 Crore | Above 10 Crore |
| F.Y. 2014-15 | 30.90% | 33.99% | 33.99% |
| F.Y 2015-16 | 30.90% | 34.608% | 34.608% |
E. Companies
a. Domestic Company
The rates of income-tax in the case of companies are specified in Paragraph E of Part III of the First Schedule to the Bill. These rates are the same as those specified for the financial year 2014-15 i.e. 30% of taxable income.
Surcharge at the rate of seven per cent shall be levied in case of a domestic company if the total income of the domestic company exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of twelve percent shall be levied if the total income of the domestic company exceeds ten crore rupees. In case of companies other than domestic companies, the existing surcharge of two per cent. shall continue to be levied if the total income exceeds one crore rupees but does not exceed ten crore rupees. The surcharge at the rate of five percent shall continue to be levied if the total income of the company other than domestic company exceeds ten crore rupees.
However, the total amount payable as income-tax and surcharge on total income exceeding one crore rupees but not exceeding ten crore rupees, shall not exceed the total amount payable as income-tax on a total income of one crore rupees, by more than the amount of income that exceeds one crore rupees. The total amount payable as income-tax and surcharge on total income exceeding ten crore rupees, shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees, by more than the amount of income that exceeds ten crore rupees.
In other cases (including sections 115-O, 115QA, 115R or 115TA) the surcharge shall be levied at the rate of twelve percent.
For financial year 2015-2016, additional surcharge called the “Education Cess on income-tax” and “Secondary and Higher Education Cess on income-tax” shall continue to be levied at the rate of two per cent. and one per cent. respectively, on the amount of tax computed, inclusive of surcharge (wherever applicable), in all cases. No marginal relief shall be available in respect of such Cess.
b. Normal tax rates applicable to a foreign company
A foreign company is taxed at a flat rate of 40%. Apart from tax @ 40%, Education Cess is levied @ 2% of income-tax and Secondary and higher Education Cess is levied @ 1% of income-tax.
Surcharge : In addition to tax at above rate, surcharge is levied @ 2% on the amount of income-tax if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 5% on the amount of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the amount of income-tax plus surcharge.
However, marginal relief is available from surcharge in such a manner that in the case of a foreign company whose net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore.
In case of a foreign company whose net income exceeds Rs. 10 crore, marginal relief is available from surcharge in such a manner that the amount payable as income-tax and surcharge shall not exceed the total amount payable as income-tax and surcharge on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.
MAT : In the case of a corporate taxpayer to whom the provisions of Minimum Alternate Tax (MAT) applies, tax payable cannot be less than 18.5% (+SC+EC+SHEC) of “Book profit” as per section 1 15JB.
Income Tax Rate Chart In case of Corporates for Financial year 2015-16
| SI.No. | Particulars | Tax(%) | Surcharge(%) | E. Cess(%) | SHE. Cess (%) | Effective Tax(%) |
| 1 | Domestic companies (with total income less than 1 Cr.) | 30 | – | 2 | 1 | 30.90 |
| 2 | Domestic companies (with total income more than1 cr. but less than 10 Cr.) | 30 | 7* | 2 | 1 | 33.063 |
| 3 | Other domestic companies | 30 | 12# | 2 | 1 | 34.608 |
| 4 | Foreign companies (with total income less than 1 Cr.) | 40 | – | 2 | 1 | 41.20 |
| 5 | Foreign companies (with total income more than | 40 | 2 | 2 | 1 | 42.024 |
| 1 cr. but less than 10 Cr.) | ||||||
| 6 | Other foreign companies | 40 | 5 | 2 | 1 | 43.26 |
* Surcharge has been increased from 5% to 7%.
# Surcharge has been increased from 10% to 12%.
MINIMUM ALTERNATE TAX (MAT) RATES FOR FINANCIAL YEAR 2015-16
| SI.No. | Particulars | Tax(%) | Surcharge(%) | E. Cess(%) | S Et HE.Cess (%) | Effective Tax (%) |
| 1 | Domestic companies (with total income less than 1 Cr.) | 18.5 | – | 2 | 1 | 19.055 |
| 2 | Domestic companies (with total income more than 1 cr. but less than 10 Cr.) | 18.5 | 7* | 2 | 1 | 20.389 |
| 3 | Other domestic companies | 18.5 | 12# | 2 | 1 | 21.342 |
| 4 | Foreign companies (with total income less than 1 Cr.) | 18.5 | – | 2 | 1 | 19.06 |
| 5 | Foreign companies (with total income more than 1 cr. but less than 10 Cr.) | 18.5 | 2 | 2 | 1 | 19.436 |
| 6 | Other foreign companies | 18.5 | 5 | 2 | 1 | 20.008 |
* Surcharge has been increased from 5% to 7%.
# Surcharge has been increased from 10% to 12%.
Alternate Minimum Tax (AMT)
It is applicable on all persons other than companies. In case of Individual, Hindu Undivided Family, Association of Persons and Body of Individuals, it applies only if Adjusted Total Income exceeds Rs. 20,00,000. Adjusted Total Income is computed by increasing Total Income by any Deduction claimed under chapter VIA [Sec. 80-IA to Sec. 8ORRB (Except Sec. 80P)] and Sec. 10AA.
AMT would be computed at the rate of 18.5% on adjusted total income. Surcharge has been increased from 10% to 12% where the adjusted total income exceeds Rs. 1,00,00,000. Education Cess is applicable at the rate of 2%. Secondary and Higher Education Cess is applicable ® 1% on income tax.
Securities Transaction Tax (STT) Rates for Financial Year 2015-16
STT is levied on the value of taxable securities transaction as under:
| Sl.No. | Transactions | Rate | Payable by |
| 1 | Purchase/Sale of equity shares (delivery based) | 0.1% | Purchaser/ Seller |
| 2 | Purchase of units of equity-oriented mutual fund (delivery based) | Nil | Purchaser |
| 3 | Sale of units of equity-oriented mutual fund (delivery based) | 0.001% | Seller |
| 4 | Sale of equity shares, units of equity-oriented mutual fund (non-delivery based) | 0.025% | Seller |
| 5 | Sale of an option in securities | 0.017% | Seller |
| 6 | Sale of an option in securities, where option is exercised | 0.125% | Purchaser |
| 7 | Sale of a futures in securities | 0.01% | Seller |
| 8 | Sale of unit of equity oriented fund to the Mutual Fund | 0.001% | Seller |
Commodities Transaction Tax (CTT)
CTT is levied on the value of taxable commodities transaction:
| Transactions | Rate | Payable by |
| Sale of commodity derivative (other than agricultural commodities) entered in a recognised association | 0.1% | Seller |
Dividend Distribution Tax (DDT) for Financial Year 2015-16
Dividends distributed by an Indian Company are exempt from income tax in the hands of all shareholders. DDT shall be computed on the amount determined after grossing up dividend paid by the rate of tax (excluding Surcharge and Cess) on such dividend.
Grossing up needs to be done only of the Basic Rate and not of the Effective Rate. The rates of DDT are as below:
DDT Rates for Companies for Financial Year 2015-16
| Basic Rate | Effective Rate* |
| 17.647 | 20.358 |
*including Surcharge of 12% & Education Cess
DDT Rates for Mutual Fund” (MF) for payments to –
| Particulars | Basic Rate | Effective Rate* |
| (1) Distribution by MF under an Infrastructure Debt fund scheme to a non-resident | 5.263 | 6.071 |
| (2) To an individual or HUF excluding (1) above | 33.33 | 38.449 |
| (3) To any other Person excluding (1) a (2) above | 42.85 | 49.432 |
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