Rate of Income Tax for A.Y. 2010-2011

Rate of Income Tax for the financial year 2009-10 (April 1, 2009 to March 31, 2010) (Assessment Year 2010-2011)

Income earned in India is not limited to income earned within the geographical limits or boundaries of the country. Certain incomes are also deemed to have been earned in India although they may have been earned outside the country.

The job of monitoring the Income-tax collection by the government is entrusted to a Income Tax Department. This department functions under the Department of Revenue, Ministry of Finance, Government of India.

Income earned in the twelve months contained in the period from 1st April to 31st March (commonly called Financial Year [FY]) is taken into account for purposes of calculating Income Tax. Under the income tax Act this period is called a Previous year. An Assessment Year is twelve-month period 1st April to 31st March immediately following the previous year. In the Assessment year a person files his return for the income earned in the previous year.

A. Company other than a Domestic Company / Foreign Company

i. Income-tax:

• @ 50% of on so much of the total income as consist of (a) royalties received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 31st day of March, 1961 but before the 1st day of April, 1976; or (b) fees for rendering technical services received from Government or an Indian concern in pursuance of an agreement made by it with the Government or the Indian concern after the 29th day of February, 1964 but before the 1st day of April, 1976, and where such agreement has, in either case, been approved by the Central Government;
• @ 40% of the balance

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 2.5% of such income tax, provided that the total income exceeds Rs. 1 crore.

iii. Education Cess: 3% of the total of Income-tax and Surcharge.

B. Domestic Company

i. Income-tax: 30% of total income.

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore.

iii. Education Cess: 3% of the total of Income-tax and Surcharge.

C. Partnership Firm (includes Limited Liability Partnership)

i. Income-tax: 30% of total income.

ii. Surcharge: The amount of income tax as computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge at the rate of 10% of such income tax, provided that the total income exceeds Rs. 1 crore.

iii. Education Cess: 3% of the total of Income-tax and Surcharge.

D. Individuals and HUFs