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Regarding corporate tax rates for FY 19-20

Pranav Aggarwal (525 Points)

23 December 2019

any body pls tell me company tax rates for FY 19-20 ??

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 23 December 2019

Income-tax rates applicable in case of companies for Assessment Year 2020-21 are as follows:

i. Option has been given to pay concessional effective tax @ 25.17% to existing domestic companies & @ 17.16% to new domestic manufacturing companies without availing any tax incentives/exemptions

SI No	Nature of domestic company	Current ETR(%)	ETR if option exercised (%)	Conditions / benefits if option exercised
1.	Existing Domestic Companies			Applicable w.e.f FY 2019-20 Not eligible for any tax incentives/exemptions Not required to pay MAT Option has to be exercised one time on or before the due date of filing of tax return Option once exercised can’t be withdrawn.
	a) Turnover > Rs.400 Crore during the FY 2017-18
	Income ≤ Rs.1 crore	31.20%	25.17%#
	Income > Rs.1 crore ≤ Rs.10 crore	33.38%	25.17%
	Income > Rs.10 crore	34.94%	25.17%
	b) Other domestic companies ( in existence on or before 30-Sep-2019)
	Income ≤ Rs.1 crore	26%	25.17%
	Income > Rs.1 crore ≤ Rs.10 crore	27.82%	25.17%
	Income > Rs.10 crore	29.12%	25.17%
2.	Existing Domestic Companies – Continues to avail tax incentives/exemptions			Can opt for 25.17% effective tax rate after the expiry of tax holiday/exemption period MAT rate reduced from 18.5% to 15% (plus applicable surcharge and cess)
3.	New Domestic Manufacturing Companies incorporated on or after 01-Oct-2019			Applicable w.e.f FY 2019-20 Has to commence manufacturing on or before 31.03.2023 Not eligible for any tax incentives/exemptions Not required to pay MAT Option has to be exercised on or before the due date of filing of first tax return Option once exercised can’t be withdrawn
	Income ≤ Rs.1 crore	26%	17.16%##
	Income > Rs.1 crore ≤ Rs.10 crore	27.82%	17.16%
	Income > Rs.10 crore	29.12%	17.16%

#. Corporate tax rate @ 22%, Surcharge @ 10% & Health & Education Cess @ 4%

##. Corporate tax rate @ 15%, Surcharge @ 10% & Health & Education Cess @ 4%

ii. Enhanced surcharge of 25%/37% shall not be applicable on tax payable on capital Gains arising from transfer of certain securities

SI No	Capital Asset	Assessee	Taxability Section	Applicable Surcharge
1.	Equity share in a company Liable Units of equity oriented fund Units of business trust for STT	Individual, HUF, AOP, BOI & AJP	STCG- 111A LTCG- 112A	10% or 15%
2.	Any security including derivatives	Foreign Portfolio Investors (FPI)	115AD	10% or 15%

iii. Any business transaction between the company (opt for 17.61%) and any other person shall fall under specified Domestic Transactions and transfer provisions will be applicable accordingly

iv. No tax on buy back of shares in the hands of listed companies announced buy-back of shares prior to 05-July-2019

7. Foreign Company

Assessment Year 2019-20 and Assessment Year 2020-21

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%

Add:

a) Surcharge:The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:

(i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.

(ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.

b) Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Courtesy ... Tax... guru

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Pranav Aggarwal (525 Points)
Replied 23 December 2019

How this effective tax rate of 25.17% and 17.16% has been arrived??

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177852 Points)
Replied 23 December 2019

The rate of surcharge in case of a domestic company opting for taxability under Section 115BAA or Section 115BAB is 10% irrespective of amount of total income.

Thus.... 22% + 10% surcharge + 4% cess equals to ... 25.168 or 25.17%.

Similarly, 15% + 10% surcharge + 4% cess ....... = 17.16%.

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