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Rates of Tax
| TAX ON TOTAL INCOME | ||||||
| Special Income | Casual Income | Normal Income [NI = TI – SI – CI] | ||||
| LTCG | 20% flat | Lottery Income etc | 30% flat | Indian Company / Firm | Foreign Company | Ind / HUF / AOP / BOI |
| 30% flat | 30% flat | Slab rate | ||||
| STCG STT | 15% flat | Surcharge (Tax on Tax) | See the last table | |||
| Basic exemption allowed from SI if NI < BE. But 1st allowed from NI & then from SI. Rebate u/s 87A is available. | Education cess & SHEC | 3% | 3% | 3% | ||
| Domestic Company | Foreign Company | Firm / LLP | Ind / HUF/ AOP / BOI / AJP | Local Authority | Co-operative society | |
| • Total Income exceeds Rs. 1 Cr. | 7% | 2% | 12% | 15% | 12% | 12% |
| • Total Income exceeds Rs. 10 Cr. | 12% | 5% | NA | NA | NA | NA |
| SLAB RATE | ||
| Income | Rate of Tax (Method 1) | Amount of Tax (Method 2) |
| Upto Rs. 2,50,000 | Nil | Nil |
| Rs. 2,50,001 to Rs.5,00,000 | 10% of (NI – 2,50,000) – upto Rs. 5,000 for resident individual. S 87A | 10% of NI – 25,000 – upto Rs. 5,000 for resident individual. S 87A |
| Rs. 5,00,001 to Rs.10,00,000 | 20% of (NI – 5,00,000) + 25,000 | 20% of NI – 75,000 |
| Exceeds Rs. 10,00,000 | 30% of (NI – 10,00,000) + 1,25,000 | 30% of NI – 1,75,000 |
| Tax Concession | ||||
| Person | Age | Basic Exemption | Tax concession | |
| 1. | Resident senior citizen | atleast 60 years at any time during the relevant PY. | 3,00,000 | 5,000 |
| 2. | Resident super senior citizen | atleast 80 years at any time during the relevant PY | 5,00,000 | 25,000 |
| 3. | Woman (R / NR) | less than 60 years | 2,50,000 | nil |
| 4. | Non resident senior citizen / super senior citizen | Any age | 2,50,000 | nil |
| 5. | HUF / AOP / BOI / AJP | NA | 2,50,000 | nil |
| Domestic Company | Foreign Company | Firm / LLP | Individual / HUF / AOP / BOI / AJP | ||
| Tax on Long Term Capital Gain | 20% flat | 20% flat | 20% flat | 20% flat | |
| Tax on Short Term Capital Gain (STT paid) | 15% flat | 15% flat | 15% flat | 15% flat | |
| Tax on Lottery Income. (Casual Y) | 30% flat | 30% flat | 30% flat | 30% flat | |
| Tax on Normal Income | 30% flat | 40% flat | 30% flat | slab rate with rebate u/s 87A (R Ind). | |
| Surcharge | • TI exceeds Rs. 1 Cr. and upto 10 Cr. | 7% | 2% | 12% | 15% |
| • TI exceeds Rs. 10 Cr. | 12% | 15% | NA | NA | |
| Whether marginal relief available | Yes | Yes | Yes | Yes | |
| Education cess & SHEC | 3% | 3% | 3% | 3% | |
The document Rates of Tax is a part of the Taxation Course Fast Track Quick Revision Income Tax.
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FAQs on Rates of Tax
| 1. What are tax rates? |  |
Ans. Tax rates refer to the percentage at which an individual or business is taxed on their income or profits. It determines the amount of tax that needs to be paid to the government based on the taxable income or profits earned.
| 2. How are tax rates determined? | |
Ans. Tax rates are determined by the government through the legislative process. The government analyzes various factors such as economic conditions, fiscal policies, and revenue requirements to set tax rates that are deemed appropriate for the given period.
| 3. What factors influence tax rates? | |
Ans. Tax rates can be influenced by several factors. These may include the country's economic situation, government spending priorities, political decisions, social policies, and the need to generate revenue to fund public services and infrastructure.
| 4. How do tax rates affect individuals and businesses? | |
Ans. Tax rates directly impact individuals and businesses as they determine the amount of money they need to pay in taxes. Higher tax rates can reduce disposable income for individuals and lower the profitability for businesses, while lower tax rates may stimulate economic growth and provide incentives for investment and consumption.
| 5. Can tax rates change over time? | |
Ans. Yes, tax rates can change over time. Governments often review and revise tax rates periodically to align with evolving economic conditions, fiscal policies, and social priorities. Changes in tax rates can be implemented through legislative amendments or budgetary measures. It is important for individuals and businesses to stay informed about any changes in tax rates to ensure compliance with tax laws and regulations.
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Apr 21, 2026 Last updated
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