Rates of Income-tax Ay 2014-15 Fy 2013-14

RATES OF INCOME-TAX

AY 2014-15

RATES OF INCOME-TAX(For AY 2014-15)

Tax rates for Individuals:For income-tax rate purpose, the Individuals are divided into three groups:i) Residents (below 60 years of age)ii) Resident Senior Citizens (above 60 years)iii) Resident Super Senior Citizens (above 80 years)

Rates for Resident below 60(below 60 years), HUFs, AOP, BOI, Artificial

Juridical Person AY 2013-14 FY 2012-13

• Upto Rs.2,00,000/- @ nil (Basic exemption)• Rs.2,00,000 – Rs.5,00,000 = @ 10%• Rs.5,00,000 – Rs.10,00,000 = 20% (+30,000)• Rs.10,00,000 & Above = 30% (+1,30,000)• (If Total Income is above Rs.1,00,00,000,

Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Resident Senior Citizens( 60 – 80 Years)

AY 2013-14 FY 2012-13• Upto Rs.2,50,000/- @ nil (Basic exempted

Income)• Rs.2,50,000 – Rs.5,00,000 = @ 10%• Rs.5,00,000 – Rs.10,00,000 =@ 20% (+ 25,000)• Rs.10,00,000 & Above = @ 30% (+1,25,000)• (If Total Income is above Rs.1,00,00,000,

Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Resident Super Senior Citizens (Above 80 Years)

AY 2013-14 FY 2012-13

• Upto Rs.5,00,000/- @ nil (Basic exempted Income)

• Rs.5,00,000 – Rs.10,00,000 = @ 20% • Rs.10,00,000 & Above = @ 30% (+100,000)• (If Total Income is above Rs.1,00,00,000,

Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Tax Rates for Local AuthoritiesAY 2013-14

• Tax Rate for Local Authorities is at a flat rate of 30% irrespective of the income.

• (If Total Income is above Rs.100,00,000, Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

• .

Tax Rates for Co-op.Societies AY 2012-13

• Upto Rs. 10,000 @ 10%• Rs.10,000 – 20,000 @ 20% (+ 1000)• Above 20,000 @ 30% (+3,000)

• (If Total Income is above Rs.100,00,000, Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Tax Rates for Trusts AY 2013-14

• Charitable Trusts which has been granted registration u/s.11 the total income is tax free.

• Non-charitable and Un-registered trusts or unspecified AOP – flat rate of 30% (If Total Income is above Rs.100,00,000, Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Tax Rates for Firms AY 2012-13

• Firms – On Total income flat rate of 30%• No Basic Exemption.• (If Total Income is above Rs.100,00,000,

Surcharge of 10% ) + 2% Education Cess and 1% Secondary & Higher Edu. Cess, on IT.

Tax Rates for Companies AY2013-14

• Domestic Companies – 30%• Foreign Companies - 40%• (Royalty received from Govt. or Indian concern in pursuance of an

agreement signed between 1.4.61 - 31.3.76 or technical fees of agreement signed between 1.3.64 – 31.3.76) – 50%

• Surcharge for domestic co. @ 5% Surcharge for foreign co. @ 2% only if Total Income exceeds Rs.1 Cr. (Rs.1,00,00,000/-)

If income exceeds, the Surcharge will be 10% & 5% respectively.EC 2% + SHSEC 1% on tax+ Surcharge, if any

Special Rates for Capital Gains

• Further certain incomes have special tax rates, e.g.

• Short term capital gain – 15%

• Long term capital gain – 20%

• + EC 2% and SHSEC 1%

Marginal Relief for Firms and Companies.

• If the income just exceeds Rs.1,00,00,000/-then the excess of tax + surcharge on the total income over tax on Rs.100,00,000/- shall not exceed by the amount of the total income over Rs,1,00,00,000/-

• The marginal relief is available if the income of domestic co. is between Rs.1,00,00,000 and Rs.1,03,32,100 and for a foreign co. is between Rs.1,00,00,000 and Rs.1,01,69,490/-

MINIMUM ALTERNATE TAXAY 2014-15

• If the total income of the company comes to nil on account of adjustment of losses etc., then 18.5% for AY 2012-13 MAT on the ‘book profit’ is charged. ‘Book profit’ is worked in the manner prescribed under sec.115B of the Income-tax Act. The surcharge as per prescribed rates is chargeable if the ‘book profit’ is above Rs.1 Cr./Rs.10 Cr. Resply. + EC of 2% and SHSEC of 1% is chargeable on IT+SC

Special Rates for Certain Incomes

• In addition to the above tax rates, there are certain special rates ranging from 10% - 30% on some specified income, as prescribed under separate sections of the Income-tax Act like sec.115A, 115AB, 115AC, 115ACA,115AD, 115AB, 115BB, 115BBA, 115BBC, 115E and

HOW TO COMPUTE INCOME-TAX• The income under different heads are to be worked

out separately; The sum total of such heads of income is called Gross Total Income;

• Unabsorbed Losses, Depreciation, etc. brought forward from earlier years, have to be set off from GTI;

• Various deductions in Chapter VIA – u/s.80C to 80U have to be deducted from GTI.

• The balance amount is Total Income. Tax is worked out on TI.

• From the tax worked out, rebates if any have to be given credit of. The balance is tax payable.

HOW TO PAY TAX

• Tax Deducted at source (TDS);• Advance-tax (Pay-as-you-earn tax)• Self Assessment tax;• Regular tax.

Tax includes, interest, penalty, fine orany other some payable by any assessee.

Some examples Q-1

• Mr.Harindranath, 72, finds his income for FY 2011-12 is as under:

• Pension – Rs.3,35,000/-• Inerterest Incme Rs.4,55,000/-• Dividend Income Rs.1,80,000/-• Agriculturall Income Rs.35,000/-• TDS paid s.44,000/-, Advance tax paid 40,000 and S.A

Tax paid Rs.8,500/-• What is tax payable/refundable in his case.

Answer 1• Salary Income(Pension) Rs.3,35,000• Income from other sources

(Interest Income) Rs.4,55,000• Dividend Income (Exempted)• Agricultural Income (Exempted) ---------------

Total Income Rs.7,90,000Tax payable Rs.5,00,000 - 25,000 Rs.290,000 @ 20% 58,000 83,000 3% Cess 2,490Rs.85,490

Less: Tax paid -TDS Rs.44,000 Advance tax Rs.40,000

S.A.Tax Rs. 8,500 Tax refundable Rs. 7,010/-

Example 2

• M/s. Harrison Ltd.. An Indian Company had earned taxable profit of Rs.2,55,47,000/-. TDS Rs.45,00,000/- Advance tax Rs.38,00,000/-. Calculate the tax payable/refundable.

• If the Income-tax Department assessed the income at 3,10,38,500/- what would be the regular tax demanded. (Ignore Interest)

Answer-2• Total Income Returned - Rs.2,55,47,000 Income Tax @ 30% Rs. 76,64,100

Since T.I. is above 1Cr. Surcharge @ 5%Rs. 3,83,205Rs. 80,47,305Cess 2% EC + 1% SHSEC Rs. 2,41,419 Total tax payable Rs. 82,88,724Tax paid 45,00,000+38,00,000 Rs. 83,00,000 Tax Refundable Rs. 11,276/-

Answer-2 – Contd…• Total Income Returned - Rs.3,10,38,500 Income Tax @ 30% Rs. 93,11,550

Since T.I. isabove 1Cr. Surcharge @ 5%Rs. 4,65,578Rs. 97,77,128Cess 2% EC + 1% SHSEC Rs. 2,93,314 Total tax payable Rs.1,00,70,442Tax paid 45,00,000+38,00,000 Rs. 83,00,000Tax payble Rs. 17,70,442

Example 3

• A cooperative society has received taxable income of Rs.55,000/- TDS paid Rs.5,000/-. Find further tax payable.

• A firm has earned net profit Rs.75,40,310/- and paid advance tax24,00,00/- Help them work out for filing of their return.