Taxes in India
Taxes in India 1. Corporate tax rates: For a Company | Where taxable income exceeds INR 10 million | Other cases | Domestic company | 32.45% (30% + 5% surcharge + 3% education cess) | 30.90% (30% + 3% education cess) | Foreign company | 42.02% (40% + 2% surcharge + 3% education cess) | 41.20% (40% + 3% education cess) |
2. Dividend Distribution Tax Dividend income is exempt in the hands of the shareholders. However, a DDT is levied on companies declaring dividends. The effective DDT rate is 16.22% (15% + 5% surcharge +3% educational cess)
3. Minimum Alternate Tax (MAT)
Minimum Alternative Tax is charged at the rate of 18.5% + applicable surcharge and education cess on book profits on companies whose tax payable is under normal income tax provision. MAT will become applicable to SEZ developers/ units with effect from FY 2011-12. The current effective MAT rates are as follows:
Company | Where taxable income exceeds INR 10 million | Other cases | Domestic company | 20.01% | 19.05% | Foreign company | 19.44% | 19.05% |
4. Capital Gains Particulars | Tax Rates | | | Resident | Non-resident | Short term capital assets(other than the ones mentioned below | Normal corporate/ individual tax rates | Normal corporate/ individual tax rates | Short term capital assets- listed equity shares and units of equity oriented funds which have been charged to Securities Transaction Tax | 15% | 15% | Long term capital assets- listed equity shares in a company or unit of an equity oriented fund which have been charged to Securities Transaction Tax | Exempt | Exempt | Long term capital assets- listed securities (other than ones mentioned above) | 10% | 10% | Other long term capital assets | 20% | 20% |
Further to the above mentioned tax rates a surcharge and education cess would be levied 5. Depreciation Particulars | Rate | Factory Building | 10% | Furniture and fittings | 10% | Plant and machinery | 15% | Computers
2. Dividend Distribution Tax Dividend income is exempt in the hands of the shareholders. However, a DDT is levied on companies declaring dividends. The effective DDT rate is 16.22% (15% + 5% surcharge +3% educational cess)
3. Minimum Alternate Tax (MAT)
Minimum Alternative Tax is charged at the rate of 18.5% + applicable surcharge and education cess on book profits on companies whose tax payable is under normal income tax provision. MAT will become applicable to SEZ developers/ units with effect from FY 2011-12. The current effective MAT rates are as follows:
Company | Where taxable income exceeds INR 10 million | Other cases | Domestic company | 20.01% | 19.05% | Foreign company | 19.44% | 19.05% |
4. Capital Gains Particulars | Tax Rates | | | Resident | Non-resident | Short term capital assets(other than the ones mentioned below | Normal corporate/ individual tax rates | Normal corporate/ individual tax rates | Short term capital assets- listed equity shares and units of equity oriented funds which have been charged to Securities Transaction Tax | 15% | 15% | Long term capital assets- listed equity shares in a company or unit of an equity oriented fund which have been charged to Securities Transaction Tax | Exempt | Exempt | Long term capital assets- listed securities (other than ones mentioned above) | 10% | 10% | Other long term capital assets | 20% | 20% |
Further to the above mentioned tax rates a surcharge and education cess would be levied 5. Depreciation Particulars | Rate | Factory Building | 10% | Furniture and fittings | 10% | Plant and machinery | 15% | Computers