Meaning
Tax Rates
A. Income-tax
·
In
the case of a domestic company 30 % of the total income;
·
but
in case total turnover or the gross receipt in the previous year 2017-18 does
not exceed Rs. 400 crore than the rate of tax will be 25% In the case of a
domestic company
The
amount of income-tax computed shall, be increased by a surcharge,-
Surcharge rate :
Particulars
|
Tax Rate
|
If total income exceeds Rs. 1 crore
but not Rs. 10 Crore
|
7% of tax calculated on domestic
company/ 2 % of tax calculated on foreign company as per above rates
|
If total income exceeds Rs. 10 crore
|
12% of tax calculated on domestic
company/ 5 % of tax calculated on foreign company as per above rates
|
Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income 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 :
Provided further that in the case of every company having a total income exceeding ten crore rupees, 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 a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
Health and Education Cess
The amount of income-tax as increased by the
applicable surcharge, shall be further increased by "Health and Education
Cess on income-tax", calculated at the rate of four per cent of such
income-tax and surcharge
B. Minimum Alternate Tax
A company shall be liable to pay MAT @
18.5% of book profit (plus surchage and health and Education Cess as
applicable) where the normal tax liability of the company is less than 18.5% of
book profit.
Dividend Distribution Tax (DDT)
Companies are required to pay tax on the dividend distributed to
the shareholders in a particular year. This dividend is exempted in the hands
of shareholders upto an amount of Rs. 10 lakh but the companies have to pay
tax @ 20.56 %.
New
Updates
The
Centre slashed effective corporate
tax to 25.17 per cent, inclusive of
all cess and surcharges, for
domestic companies. Making the announcement, Finance Minister said the new tax rate will be applicable from the current fiscal which
began on April 1.
·
New
provision inserted in the income tax act with effect from fiscal year 2019-20,
that allows any domestic company to pay income tax at the rate of 22% subject
to condition they will not avail any incentive or exemptions.
·
Manufacturing
companies set up after October 1 to get option to pay 15% tax. Effective tax
rate for new manufacturing firms to be 17.01% inclusive of surcharge & tax.
·
Listed
companies that have announced buyback before July 5, 2019, tax on buyback of
shares will not be charged
·
Higher
surcharge will also not apply on capital gains on sale of security including
derivatives held by FPIs
·
Enhanced
surcharge will not apply to capital gains arising on equity sale or
equity-oriented funds liable to STT stabilise flow of funds into capital
markets
·
To
provide relief to companies availing of concessions and benefits, a MAT relief
by reducing it from 18% to 15%
·
CSR
2% spending to include government, PSU incubators and public funded education
entities, IITs
New domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives. Meaning, effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess.
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