KEY PROPOSALS: DIRECT & INDIRECT TAX

DIRECT TAX

INCOME TAX RATES

Individual, HUF, AOP, BOI and AJP

Old regime

Income (INR) Existing and Proposed Rates (%)
Individuals (other than senior and super senior citizens) Senior Citizens (60 years or more at any time during previous year) Super Senior Citizens (80 years or more at any time during previous year)
0 – 250,000 NIL NIL NIL
250,001 – 300,000 5 NIL NIL
300,001 – 500,000 5 5 NIL
500,001 – 1,000,000 20 20 20
1,000,001 and above 30 30 30

New Regime as per Section 115BAC of the IT Act (Default Regime w.e.f. AY 2024-25)

No changes have been proposed in the new regime of taxation under Section 115BAC of the IT Act. Accordingly, the rate of tax as applicable for AY 2024-25 and AY 2025-26 is as under:

Income (INR) Existing and Proposed Rates (%)
Individuals and HUF
Nil to 300,000 NIL
300,001 - 600,000 5
600,001 - 900,000 10
900,001 - 1,200,000 15
1,200,001 - 1,500,000 20
1,500,000 and above 30

Rebate, Surcharge & Cess for Individual, HUF, AOP, BOI and AJP

Sr. No. Particulars Existing and Proposed rates (%)
1 Rebate

Old Regime - INR 12,500 – If total income does not exceed INR 500,000

New Regime - INR 25,000 – If total income does not exceed INR 700,000
2 Surcharge (for income other than income covered under Section 111A, 112 & 112A, Section 115AD(1)(b) of the IT Act and Dividend)

Old Regime:

  • 10% - If total income > INR 5 million but ≤ INR 10 million
  • 15% - If total income > INR 10 million, but ≤ INR 20 million
  • 25% - If total income > INR 20 million, but ≤ INR 50 million
  • 37% - If total income > INR 50 million

New Regime:

  • 10% - If total income > INR 5 million but ≤ INR 10 million
  • 15% - If total income > INR 10 million, but ≤ INR 20 million
  • 25% - If total income > INR 20 million
3 Surcharge for income covered under Section 111A, 112, 112A, 115AD(1)(b) of the IT Act, dividend and income of AOPs comprising of companies as its members
  • 10% - If total income > INR 5 million but ≤ INR 10 million
  • 15% - If total income > INR 10 million
4 Cess - Health and Education cess
  • 4%
5

AMT for Individuals, HUFs, AOPs

(Including surcharge and cess)

Only for old regime:

  • 19.24% - If adjusted total income > INR 2 million, but ≤ INR 5 million
  • 21.16% - If adjusted total income > INR 5 million, but ≤ INR 10 million
  • 22.13% - If adjusted total income > INR 10 million, but ≤ INR 20 million
  • 24.05% - If adjusted total income > INR 20 million, but ≤ INR 50 million
  • 26.36% - If adjusted total income > INR 50 million

Co-operative Societies

Normal Tax Rates

Income (INR) Existing and Proposed Rates (%)
0 – 10,000 10
10,001 - 20,000 20
20,001 and above 30

Special Tax Rates under optional tax regime

Sr. No. Particulars Existing and Proposed rates (%)
1 Covered under Section 115BAD of the IT Act (Basic rate – 22%) 25.17% - Irrespective of total income
2 Covered under Section 115BAE of the IT Act (Basic rate – 15%) - Newly manufacturing co-operative society set up on or after 1st April, 2023 17.16% - Irrespective of total income
3 AMT for co-operative societies

Only for old regime:

  • 15.60% - If total income ≤ INR 10 million
  • 16.69% - If total income > INR 10 million, but ≤ INR 100 million
  • 17.47% - If total income > INR 100 million

Surcharge & Cess for Co-operative Societies

Sr. No. Particulars Existing and Proposed rates (%)
1 Surcharge on income of co-operative society

If not opted for special tax rates:

  • NIL - If total income ≤ INR 10 million
  • 7% - If total income > INR 10 million, but ≤ INR 100 million
  • 12% - If total income > INR 100 million

If opted for special tax rates under Section 115BAD or 115BAE:

  • 10% irrespective of total income
2 Cess - Health and Education cess
  • 4%

Effective tax rates for Companies, Firms (including LLP)

Sr. No. Description Existing and Proposed rates (%)
(Including surcharge & Cess)
(A) Domestic Companies Net income ≤ INR 10 million Net Income > INR 10 million, but ≤ INR 100 million Net income > INR 100 million
1 Turnover or gross receipts in previous year 2019-20 ≤ INR 4 billion (Base rate – 25%) 26.00 27.82 29.12
2 Covered under Section 115BA of the IT Act
(Base rate – 25%)		 26.00 27.82 29.12
3 Covered under Section 115BAA of the IT Act
(Base rate – 22%)		 25.17
4 Covered under Section 115BAB of the IT Act (Base rate – 15%) 17.16
5 Any other Company having turnover or gross receipts in previous year 2020-21 > INR 4 billion
(Base rate – 30%)		 31.20 33.38 34.94
6 MAT under Section 115JB of the IT Act for companies other than that covered under Section 115BAA and 115BAB of the IT Act (Rate to be applied on book profits – base rate 15%) 15.60 16.69 17.47
7 Buy back tax under Section 115QA of the IT Act
(Base rate -20%)		 23.30
(B) Foreign Companies Net income ≤ INR 10 million Net Income > INR 10 million, but ≤ INR 100 million Net income > INR 100 million
1 Regular tax (Base rate – 40%) 41.60 42.43 43.68
(C) Firms and LLP Net income ≤ INR 10 million Net income > INR 10 million
1 Regular tax (Base rate – 30%) 31.2 34.94
2 AMT (Base rate – 18.5%) 19.24 21.55

Surcharge and Cess

Particulars Existing & Proposed
Other domestic companies
  • NIL - If total income ≤ INR 10 million
  • 7% - If total income > INR 10 million, but ≤ INR 100 million
  • 12% - If total income > INR 100 million
Domestic companies covered under Section 115BAA and Section 115BAB of the IT Act
  • 10% - Irrespective of the amount of total income
Foreign companies
  • NIL - If total income ≤ INR 10 million
  • 2% - If total income > INR 10 million, but ≤ INR 100 million
  • 5% - If total income > INR 100 million
Firms and LLP
  • 12% - If total income > INR 10 million
Health and education cess
  • 4%

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