Guide to .. Tax Management ,Tax Planning and Tax Saving

 

 

Income Tax Rates for Assessment Year 2021-22

1.   In case of Individual

 

(A) For an individual (man or woman), resident in India who is of the age of 80 years or more at any  time during the previous year: 

 

I -     Old Regime

 

Total Income

Rate of Tax

Upto ₹5,00,000

Nil

₹5,00,001 to ₹10,00,000

20%

Above ₹10,00,000

30%

 

II -    New Regime

 

Total Income

Rate of Tax

Upto ₹2,50,000

Nil

₹2,50,001 to ₹5,00,000

5%

₹5,00,001 to ₹7,50,000

10%

₹7,50,001 to ₹10,00,000

15%

₹10,00,001 to ₹12,50,000

20%

₹12,50,001 to ₹15,00,000

25%

Above ₹15,00,000

30%

 

(B) For an individual (man or woman), resident in India who is of the age of 60 years or more but less  than 80 years at any time during the previous year. 

 

I -     Old Regime

 

Upto ₹3,00,000

Nil

₹3,00,001 to ₹5,00,000

5% 

₹5,00,001 to ₹10,00,000

20%

Above ₹10,00,000

30%

 

II -    New Regime

 

Total Income

Rate of Tax

Upto ₹2,50,000

Nil

₹2,50,001 to ₹5,00,000

5%

₹5,00,001 to ₹7,50,000

10%

₹7,50,001 to ₹10,00,000

15%

₹10,00,001 to ₹12,50,000

20%

₹12,50,001 to ₹15,00,000

25%

Above ₹15,00,000

30%

 

(C) For an individual, [other than mentioned in (A) & (B) above] HUF, AOP/BOI (other than a Cooperative Society) and Artificial Juridical Person. 

 

Upto ₹2,50,000

Nil

₹2,50,001 to ₹5,00,000

5%

₹5,00,001 to ₹10,00,000

20%

Above ₹10,00,000

30%

 

‘Surcharge’  for assessment year 2020-21  & 2021-22

 

The amount of income-tax shall be increased by a surcharge for the purposes of the Union calculated at the  following rates—

 

(a) where the total income exceeds ₹50,00,000 but does not exceed ₹1 crore

10% of such income-tax

  (b) where the total income exceeds ₹1 crore but does not exceed ₹2 crore

15% of such income-tax

(c) where the total income exceeds ₹2 crore but does not exceed ₹5 crore

25% of such income-tax

(d) where the total income exceed ₹5 crore

37% of such income-tax

 

Marginal Relief in case of Individual :

 

Marginal relief has also been provided in all cases where surcharge is to be levied.  

 

In the case of persons mentioned in (A) above, where such income exceeds,— 

 

(a)           ₹50,00,000 but does not exceed ₹1 crore, the total amount payable on such income and surcharge thereon  shall not exceed the total amount payable on a total income of ₹50,00,000 by more than the amount of  income that exceeds ₹50,00,000; 

 

(b)          ₹1 crore but does not exceed ₹2 crore, the total amount payable on such income and surcharge thereon  shall not exceed the total amount payable on a total income of ₹1 crore by more than the amount of  income that exceeds ₹1 crore; 

 

(c)           ₹2 crore but does not exceed ₹5 crore, the total amount payable on such income and surcharge thereon  shall not exceed the total amount payable on a total income of ₹2 crore by more than the amount of  income that exceeds ₹2 crore; 

 

(d)          ₹5 crore, the total amount payable on such income and surcharge thereon shall not exceed the total  amount payable on a total income of ₹5 crore by more than the amount of income that exceeds ₹5 crore. 

 

Health and Education Cess for assessment year 2020-21  & 2021-22 :

 

'Health and Education Cess (H&EC) on Income  Tax' @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied.

 

Rebate of maximum ₹12,500 for resident individuals having total income up to ₹5,00,000 [Section 87A] 

 

With a view to provide tax relief to the individual tax payers who are in lower income bracket, the Act for  assessment year 2020-21 has provided rebate from the tax payable by an assessee, if the following condition and  satisfied: 

 

(i)            The assessee is an individual 

 

(ii)           He is resident in India, 

 

(iii)          His total income does not exceed ₹5,00,000. 

 

Quantum of rebate: The rebate shall be equal to:

 

(1)          the amount of income-tax payable on the total income for any assessment year or 

 

(2)          ₹12,500, 

 

whichever is less. 

2.   Income Tax Rates In case of a ‘Domestic Company’  for the Assessment Year 2020-21 & 2021-22

 

I -     Old Regime

 

Rate of Tax          :               30% 

 

II -    New Regime i.e. u/s 115BAA  provided it satisfies the  conditions of section  115BAA(2)

 

Rate of Tax          :               22% 

 

III.   If the company is a new  manufacturing  company and it opts to  be taxed u/s 115BAB(2)  provided it satisfies the  conditions of section  115BAB(2)

 

Rate of Tax          :               15% 

 

‘Surcharge’ In case of a ‘Domestic Company’ :

 

Old Regime as (I) above :

Where the total income of a domestic company exceeds ₹1 crore but does not ₹10 crore, a  surcharge of 7% of tax shall be levied. 

 

Where the total income of the domestic company exceeds ₹10 crore, a surcharge at the rate of 12% of tax  shall be levied. 

 

New Regime as (II) & (III) above :

10%  (irrespective of the fact  whether the total income  is less than or more than  ₹1 crore)

‘Marginal Relief’ In case of a ‘Domestic Company’ :

 

However, the total amount payable as income-tax and surcharge on total income exceeding  ₹1 crore but not exceeding ₹10 crore, shall not exceed the total amount payable as income-tax on a total income  of ₹1 crore, by more than the amount of income that exceeds ₹1 crore.  Further, the total amount payable as income-tax and surcharge on total income exceeding ₹10 crore, shall not  exceed the total amount payable as income-tax and surcharge on a total income of ₹10 crore, by more than the  amount of income that exceeds ₹10 crore. 

 

‘Health and Education Cess’ In case of a ‘Domestic Company’ For assessment year 2020-21:

 

'Health and Education Cess (H&EC) on Income  Tax' @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied. 

3.   Income Tax Rates In case of a ‘Foreign Company’  for the Assessment Year 2020-21 & 2021-22

 

Rate of Tax          :               40% 

 

Surcharge In case of a ‘Foreign Company’:

 

Where the total income of a company other than a domestic company exceeds ₹1 crore but does  not ₹10 crore, a surcharge of 2% of tax shall be levied. 

 

Where the total income of such company exceeds ₹10 crore, a surcharge at the rate of 5% of tax shall be  levied. 

 

Marginal Relief In case of a ‘Foreign Company’ :

 

However, the total amount payable as income-tax and surcharge on total income exceeding  ₹1 crore but not exceeding ₹10 crore, shall not exceed the total amount payable as income-tax on a total income  of ₹1 crore, by more than the amount of income that exceeds ₹1 crore. 

 

Further, the total amount payable as income-tax and surcharge on total income exceeding ₹10 crore, shall not  exceed the total amount payable as income-tax and surcharge on a total income of ₹10 crore, by more than the  amount of income that exceeds ₹10 crore. 

 

Health and Education Cess In case of a ‘Foreign Company’: For assessment year 2020-21:

 

'Health and Education Cess (H&EC) on Income  Tax' @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied.

4.   Income Tax Rates In case of a ‘Firm’ (Including Limited Liability Partnership)

 

Rate of Tax          :               30% 

 

Surcharge In case of a ‘Firm’ :

 

The amount of income-tax shall be increased by a surcharge at the rate of 12% of such incometax in case of a firm having a total income exceeding ₹1 crore. 

 

Marginal Relief In case of a ‘Firm’ :

 

The total amount payable as income-tax and surcharge on total income exceeding ₹1 crore  shall not exceed the total amount payable as income-tax on a total income of ₹1 crore by more than the amount of  income that exceeds ₹1 crore. 

 

Health and Education Cess In case of a ‘Firm’ :  For assessment year 2020-21:

 

'Health and Education Cess (H&EC) on Income  Tax' @ 4% on income tax (inclusive of surcharge, wherever applicable) shall be levied.

5.   Income Tax Rates In case of a ‘Co-operative Societies’  for the Assessment Year 2020-21 & 2021-22

 

There is no threshold limit for taxability of income in case of a co-operative society.

 

The slab rate for AY 2020-21 is as under:

 

Net Income Range

Rate of income Tax

Up to Rs. 10,000

10%

Rs. 10,001 - Rs. 20,000

Rs. 1,000 Plus 20% of the Amount by which the total income exceeds Rs. 10,000

Above Rs. 20,000

Rs. 3,000 Plus 30% of the Amount by which the total income exceeds Rs. 20,000

 

Surcharge In case of a ‘Co-operative Societies’  

 

Surcharge is 12% of income-tax if net income exceeds Rs.1 Crore.

 

It is subject to marginal relief (in the case of a co-operative society having a net income of 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).

 

Health and Education Cess In case of a ‘Co-operative Societies’: 

 

4% of Income Tax Plus Surcharge

 

Marginal Relief In case of a ‘Co-operative Societies’:

 

The total amount payable as income-tax and surcharge on total income exceeding  ₹1 crore shall not exceed the total amount payable as income-tax on a total income of ₹1 crore by more  than the amount of income that exceeds ₹1 Crore.

6.   Income Tax Rates In case of a ‘Local Authorities’  for the Assessment Year 2020-21 & 2021-22

 

Local Authorities are Taxable at the Rate of 30%.

 

Surcharge In case of a ‘Local Authorities’ –

 

Surcharge is 12% of income-tax if net income exceeds Rs. 1 crore.

 

It is subject to marginal relief ( in the case of a local authority having a net income of 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).

 

Health and Education Cess In case of a ‘Local Authorities’-

 

It is 4% of income-tax and surcharge.

 

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