INCOME TAX RATES For A.Y. 2021-22 and A.Y. 2022-23 (For Company, Co-Operative Society and Local Authority)

(A) COMPANY – The tax rates as applicable are as under:

Domestic CompanyRate of Income Tax
A.Y. 2021-22A.Y. 2022-23
[A] Company having total turnover or gross receipt during the previous year 2018-19 does not exceed Rs. 400 crore25%NA
[B] Company having total turnover or gross receipt during the previous year 2019-20 does not exceed Rs. 400 croreNA25%
[C] Any other Domestic Company30%30%
Special Tax Rates for Domestic company
[A] Manufacturing Company opting u/s 115BA#25%25%
[B] Manufacturing Company opting u/s 115BAA*22%22%
[C] New Manufacturing Company opting u/s 115BAB**15%15%
Foreign Company
[A] (i) Income from Royalty from Government / Indian concern in pursuance of an agreement (Approved by the Central Government) made by it with the Indian concern after March, 31, 1961 but before April1, 1976.50%50%
(ii) Income from fees for technical services rendered in pursuance of an agreement approved by Central Government made after February 29, 1964 but before April 01, 1976.50%50%
[B] Any other Income40%40%

Surcharge on such tax as applicable is as under:

 If total income does not exceeds Rs. 1 croreIf total income exceeds Rs. 1 crore but does not exceed Rs. 10 croreIf total income exceeds Rs. 10 crore
Every Domestic Company except those chargeable to tax u/s 115BAA and 115BABNIL7%12%
Manufacturing Company opting u/s 115BAA*10%10%10%
New Manufacturing Company opting u/s 115BAB**10%10%10%
Foreign CompanyNIL2%5%

# Provided that such company is setup and registered on or after 1st March, 2016. Such option is to be exercised in prescribed manner, on or before the due date of return specified u/s 139(1) for furnishing the first of the returns of income which the person is required to furnish under the Act. Option once exercised cannot be subsequently withdrawn for the same or any other previous year. Such companies are not exempt from MAT on book profit u/s 115JB of the Act. However, where a person exercises option u/s 115BAA, the option under this section may be withdrawn.

* Benefit of lower rate under the aforesaid section can be exercised by a company from any year commencing from AY 2020-21 or onwards. Such option is to be exercised in prescribed manner, on or before the due date of return specified u/s 139(1) for any previous year relevant to the AY 2020-21 or thereafter in which the option is exercised. Option once exercised cannot be subsequently withdrawn for the same or any other previous year. Such companies are exempt from MAT on book profit u/s 115JB.

** Benefit of lower rate under the aforesaid section can be exercised by a company from any year commencing from AY 2020-21 or onwards. Such option is to be exercised in prescribed manner, on or before the due date of return specified u/s 139(1) for furnishing the first of the returns of income for AY 2020-21 or thereafter, which the person is required to furnish under the Act. Option once exercised cannot be subsequently withdrawn for the same or any other previous year. Such company is setup and registered on or after 1st October, 2019 and commences manufacturing activity on or before 31st March, 2023. Such companies are exempt from MAT on book profit u/s 115JB.

Marginal Relief on Surcharge:

(i) Where income exceeds Rs. 1 crore but not exceeding Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed 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.

(ii) Where income exceeds Rs. 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of Rs. 10 crore by more than the amount of income that exceeds Rs. 10 crore.

Health & Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge.

Minimum Alternate Tax for A.Y. 2021-22 and A.Y. 2022- 23 – Period of carried forward of MAT credit is available for 15 AYs immediately succeeding the AY in which such credit has become allowable. This is with effect from AY 2018-19. The following rate of Minimum Alternate Tax shall be applicable:

Health & Education Cess is levied at the rate of 4% on the amount of income-tax plus surcharge under MAT.

Note: Where the company is a unit located in International Financial Services Centre and derives its income solely in convertible foreign exchange, the Minimum Alternate Tax is levied at a rate of 9% (plus surcharge and cess as applicable).

(B) CO-OPERATIVE SOCIETY – The tax rates as applicable for

A.Y. 2021-22 and A.Y. 2022-23 are as under:

Sl. No.Taxable IncomeTax Rate
1upto Rs. 10,000/-10%
2Rs. 10,000/- to Rs. 20,000/-Rs. 1,000/- + 20% on income in excess of Rs. 10,000/-
3Above Rs. 20,000/-Rs. 3,000/- + 30% on income in excess of Rs. 20,000/-
  • Surcharge: @12% of such tax where total income > Rs. 1 crore. (Subject to marginal relief where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees)
  • Health & Education Cess: is levied at the rate of 4% on such income-tax plus surcharge.

Special tax rates for Co-operative society-

The resident co-operative society have an option to opt for taxation under Section 115BAD of the Income-tax Act, 1961 w.e.f. Assessment Year 2021-22 after fulfilling the prescribed conditions.

IncomeTax Rate^
Any Income22%

^Such option is to be exercised in prescribed manner, on or before the due date of return specified u/s 139(1) for furnishing the first of the returns of income for AY 2021-22 or thereafter, which the person is required to furnish under the Act. The option once exercised shall apply to subsequent assessment years. The societies opting for this section have been kept out of the purview of Alternate Minimum Tax (AMT).

  • Surcharge is applicable @ 10%.
  • Health & Education Cess is levied at the rate of 4% on such income-tax plus surcharge.

(C) LOCAL AUTHORITY Local authority are taxable for A.Y. 2021-22 and A.Y. 2022-23 at the rate of 30%.

Surcharge is applicable @12% of such tax where total income

> Rs. 1 crore. (Subject to marginal relief where income exceeds one crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income- tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees)

Health & Education Cess is levied at the rate of 4% on such income-tax plus surcharge.

(D) SPECIAL TAX RATES UNDER CHAPTER XII

SectionApplicable ToParticulars of IncomeRate
111AAll Categories of Tax PayersShort Term Capital Gain arising on transfer of equity share, equity oriented fund, unit of a business trust on or after 01.04.2005 which have been charged to Security Transaction Tax.15%
112All Tax Payers except Non-ResidentsCapital Gain arising on transfer of Long Term Capital Assets20%
112Non-ResidentsCapital Gain arising on transfer of Long Term Capital Assets: In case the long term capital asset includes unlisted securities or shares of a private company then LTCG is chargeable at.Otherwise LTCG is chargeable at 
  10%
      20%
112AAll Categories of Tax Payersw.e.f. 01.04.2019, Capital Gain arising on transfer of Long Term Capital Assets (being equity share, equity oriented fund, unit of a business trust upon which Security Transaction Tax is paid) if it exceeds Rs. one lakh, then it is taxable at10%
115ANon-Residents(i) Dividend [other than dividend referred in Section 115(O)]20%
  (ii) Interest received from Govt. of India/ Indian Concern in foreign currency20%
  (iii) Interest received from Infrastructure Debt Fund referred in Section 10(47)5%
  (iv) Interest on money borrowed in foreign currency by an Indian Company or the business trust5%
  (v) Distributed income being interest received by a unit holder from a business trust specified in section 10(23FC) or (FCA) of the Income-tax Act, 1961.5%
SectionApplicable ToParticulars of IncomeRate
  (vi) Income received in respect of units purchased in foreign currency, of a Mutual Fund specified u/s 10(23D) or UTI20%
  (vii) Royalty/Fees for Tech. Services (other than as specified u/s 44DA(1)) received from Govt. of India/ Indian concern in pursuance of an agreement10%
  Note: No deduction, expenditure or allowance is allowed u/s 28 to 44C and 57 of the Income-tax Act, 1961.The person is not required to file return of income if total income consists of only incomes stated above and correct TDS is made on such income. 
115BAll Categories of Tax PayersProfit & Gain arising from life Insurance business.12.50%
115BBAll Categories of Tax PayersIncome from winning of lottery, crossword puzzle, race, horse race, card or other games, gambling/ betting of any nature30%
115 BBEAll Categories of Tax PayersIncome referred to in Sec 68, 69, 69A, 69B, 69C and 69D declared in return of income or added by the Assessing Officer Note: No deduction, expenditure, allowance, set off of loss is allowed on such income60%
115BBGAll Categories of Tax PayersIncome by way of transfer of “Carbon Credit” Note: No deduction in respect of any expenditure or allowance is allowed while computing such income10%
SectionApplicable ToParticulars of IncomeRate
115ADForeign Institutional Investors/ Specified Fund(i) Income from securities, (other than dividend referred u/s 115-O)@ 20% (FII) and @10% (specified fund) Note: (@ 5% on interest income referred u/s 194LD)
  (ii) Short term and long term capital gain arising on transfer of such securitiesShort term capital gain @ 30% Long term capital gain @10%
  (iii) Long term capital gain on transfer of asset referred in section 112A@10% on income exceeding Rs. 1 lakh
  Note: No deduction u/s 28 to 44C, 57(i), and (iii) or chapter VIA is allowed on income from securities No benefit of conversion of foreign currency and the benefits of indexation of cost are allowed on such capital gain . 
115BBDIndian CompanyDividend received from a foreign company in which the Indian company holds 26% or more in nominal value of equity share capital Note: No other deduction under Income Tax Act is allowable@15%

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