Introduction
We are heading towards the new Financial Year 21-22. In this article you will get to know about Tax Rates, Surcharge, Health & Education Cess, Special rates, and rebate/relief applicable to various categories of Individuals (Resident & Non-Resident), HUF, Firms/LLP, Companies, Co-operative Society, Local Authority, AOP, BOI, artificial juridical persons for income liable to tax in the Financial Year 2020-21 (The assessment Year 2021-22) and Financial Year 2021-22 (The assessment Year 2022-23).
As per the Budget 2021 updates, there is no change in Tax Rates. Hence Tax Rates applicable to both the assessment year are same.
1. Income Tax Rates for FY 2020-21 & 2021-22 applicable to Individuals (Resident / Non Resident)
a. Income Tax
| Net Income Range | Rate of Income Tax |
| 1.1 Individuals (Excluding senior citizen) | |
| Up to Rs. 2,50,000 | NA |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
| 1.2 Senior Citizen | |
| Up to Rs. 3,00,000 | NA |
| Rs. 3,00,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
| 1.3 Super Senior Citizen | |
| Up to Rs. 5,00,000 | NA |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
b. Surcharge: Following are the rates of Surcharge which is levied on the amount of income tax if the total income of an assessee exceeds specified limits:-
| Range of Income | Surcharge Rate |
| Rs. 50 Lakhs to Rs. 1 Crore | 10% |
| Rs. 1 Crore to Rs. 2 Crores | 15% |
| Rs. 2 Crores to Rs. 5 Crores | 25% |
| Rs. 5 crores to Rs. 10 Crores | 37% |
| Exceeding Rs. 10 Crores | 37% |
Note A: The access surcharge of 25% & 37%, as the case may be, is not levied, from income chargeable to tax under sections 111A, 112A, and 115AD. Hence, the maximum of 15 % rate of surcharge on tax payable is applicable in such case.
Note B: Marginal relief is also provided from surcharge as following-
| Net Income Range | Marginal Relief | |
| Exceeds | Do not exceeds | |
| 50 Lakh | 1 Crore | The total amount payable as income tax and surcharge must not exceed the amount payable as tax on total income of Rs 50 Lakh by more than the amount of income that exceeds Rs 50 Lakhs |
| 1 Crore | 2 Crore | The total amount payable as income tax and surcharge must not exceed the amount payable as tax on total income of Rs 1 crore by more than the amount of income that exceeds Rs 1 crore |
| 2 Crore | 5 Crore | The total amount payable as income tax and surcharge must not exceed the amount payable as tax on total income of Rs 2 crore by more than the amount of income that exceeds Rs 2 crore |
| 5 Crore | NA | The total amount payable as income tax and surcharge must not exceed the amount payable as tax on total income of Rs 5 crore by more than the amount of income that exceeds Rs 5 crore |
Note C: Health and Education Cess: 4% education cess is levied on the cumulative amount of income tax & surcharge.
Note D: Rebate u/s.87A
A resident individual with net income less than Rs. 5,00,000 can avail the benefits of rebate under section 87A. It is deductible from income-tax before calculating education cess. 100 % of income-tax or Rs. 12,500, whichever is less is given as the amount of rebate from the income tax.
2. Income Tax Rates for FY 2020-21 & FY 2021-22 for HUF, AOP, BOI, Other Artificial Juridical Person
| Net Income Range | Rate of Income Tax |
| Up to Rs. 2,50,000 | NA |
| Rs. 2,50,000 to Rs. 5,00,000 | 5% |
| Rs. 5,00,000 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Surcharge and Health & Education Cess: Rates applicable to Individuals will be the same as given above
3. Special Income Rates for Individual & HUF u/s. 115BAC for FY 2020-21 & FY 2021-22
In the Finance Act, 2020, there is a provision for the Individuals and HUF for making payment of taxes at the following reduced rates from Assessment Year 2021-22 and onwards:
| Total Income (Rs) | Rate |
| Up to 2,50,000 | Nil |
| From 2,50,001 to 5,00,000 | 5% |
| From 5,00,001 to 7,50,000 | 10% |
| From 7,50,001 to 10,00,000 | 15% |
| From 10,00,001 to 12,50,000 | 20% |
| From 12,50,001 to 15,00,000 | 25% |
| Above 15,00,000 | 30% |
Note 1: Surcharge and Health & Education Cess as well as Rebate u/s.87A: Same as Rates Above
Note 2: The option to pay tax at lower rates will be available only if the annual income of a taxpayer is computed without claiming specified exemptions or deductions
4. Income Tax Rates applicable to Company for FY 2020-21 & FY 2021-22
4.1 Domestic Company
Income-tax rates applicable for domestic companies are as follows:
| Turnover Criteria | Assessment Year 2021-22 | Assessment Year 2022-23 |
| Annual turnover during the previous year 2018-19 must not exceed Rs. 400 Crore | 25% | NA |
| Annual turnover during the previous year 2019-20 must not exceed Rs. 400 Crore | NA | 25% |
| Any other domestic company | 30% | 30% |
Surcharge: the income-tax shall be increased by a surcharge at the below mentioned rate:
| Range of Income | Rs. 1 Crore to Rs.10 Crore | Above Rs. 10 Crore |
| Surcharge Rate | 7% | 12% |
Note: Surcharge may be subject to marginal relief.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
Special Tax rates applicable to a domestic company are as follows:-
| Domestic Company | Tax Rates |
| Companies under 115BA | 25% |
| Companies under 115BAA | 22% |
| Companies under 115BAB | 15% |
Surcharge: Flat 10% surcharge is applicable to companies opting for taxability under Section 115BAA or Section 115BAB irrespective of amount of total income.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
MAT: The domestic company opting for taxability under Section 115BAA & 115BAB is exempted from provision of MAT (Minimum Alternate Tax). However, there is no exemption available for the companies opting under section 115BA. In this case, the provisions of Minimum Alternate Tax (MAT) is applicable. The tax payable cannot be less than 15% (+HEC) of “Book profit” as per section 115JB.
However, 9% MAT is levied in case of a company, being a unit of an International Financial Services Centre and providing income in convertible foreign exchange solely.
4.2 Foreign Company
| Nature of Income | Tax Rate |
| Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government | 50% |
| Any other income | 40% |
Surcharge: The amount of surcharge will be increased by the below-mentioned rate-
| Range of Income | Rate of Surcharge |
| Rs. 1 Crore to Rs. 10 Crore | 2% |
| Above Rs. 10 Crore | 5% |
However, the surcharge may subject to marginal relief.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
5. Income Tax Rates for FY 2020-21 & FY 2021-22 for Partnership Firm & LLP
30% tax rate is applicable to Partnership firm (including LLP)
Surcharge: The amount of surcharge will be increased by the below-mentioned rate-
| Range of Income | Rate of Surcharge |
| Exceeds Rs. 1 Crore | 12% |
However, the surcharge may subject to marginal relief.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
6. Income Tax Rates for FY 2020-21 & FY 2021-22 for Local Authority
Local authority is taxable at 30%.
| Range of Income | Rate of Surcharge |
| Exceeds Rs. 1 Crore | 12% |
However, the surcharge may subject to marginal relief.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
7. Income Tax Rates for FY 2020-21 & FY 2021-22 for Co-operative Society
7.1 Normal Rates
| Taxable Income | Tax Rate |
| Up to Rs. 10,000 | 10% |
| Rs. 10,000 to Rs. 20,000 | 20% |
| Above Rs. 20,000 | 30% |
Surcharge: The amount of surcharge will be increased by the below-mentioned rate-
| Range of Income | Rate of Surcharge |
| Exceeds Rs. 1 Crore | 12% |
However, the surcharge may subject to marginal relief.
Health and Education Cess: The amount of income-tax and the surcharge shall be increased by 4% health and education cess of such income-tax and surcharge.
7.2 Special tax rates applicable to Co-operative societies
| Taxable Income | Tax Rate |
| Any Income | 22% |
Disclaimer:
The contents of this article are only for reference purpose & do not opt for any legal advice. The facts and figures are based on the latest budget updated in 2021, but the readers are advised to refer to relative documents before acting upon the above article.
