India’s New Tax Structure for the Year 2012-13

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Income tax rates with respect to the assessment year 2012-2013

Mar. 20 – In respect to income of all categories of assessees accountable for tax during the assessment year 2012-13, the rates of income tax have been specified in Part I of the First Schedule to the Bill. These are the same as those laid down in Part III of the First Schedule to the Finance Act (2011) for the purposes of computing “advance tax,” deduction of tax at source from “salaries,” and charging of tax payable in certain cases.

Surcharges on income-tax
Surcharges shall be charged with respect to income accountable to tax for the assessment year 2012-13 in the following cases:

  • In the case of an Indian national having total income exceeding 1 crore rupees, the amount of income tax calculated shall be increased by a surcharge for the purposes of the Union calculated at the rate of 5 percent of such income tax
  • In the case of a company, other than a domestic company, having total income exceeding 1 crore rupees, the amount of income tax computed shall be increased by a surcharge for the purposes of the Union calculated at the rate of 2 percent of such income tax

Though, marginal respite shall be allowed in all cases to ensure that the additional amount of income tax payable, including surcharge, on the excess of income over 1 crore rupees is limited to the amount by which the income is more than 1 crore rupees.

Moreover, in the case of every company having total income taxable under section 115JB of the Income Tax Act (1961) and where such income exceeds 1 crore rupees, surcharge at the rates mentioned above shall be levied and marginal relief shall also be provided.

Education Cess
For assessment year 2012-2013, an additional surcharge called the “Education Cess on Income Tax” and “Secondary and Higher Education Cess on Income Tax” shall continue to be levied at the rate of 2 percent and 1 percent, respectively, on the amount of tax computed, inclusive of surcharge, in all cases. No marginal relief shall be available.

Rates for deduction of income tax at source
The rates for deduction of income-tax at source from “salaries” during the financial year 2012-13 and also for computation of “advance tax” payable during the said year in the case of all categories of assessees have been specified in Part III of the First Schedule to the Bill.

These rates are also applicable for charging income-tax during the financial year 2012-13 on current incomes in cases where accelerated assessments have to be made, for instance, provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during the financial year, assessment of persons who are likely to transfer property to avoid tax, assessment of bodies formed for a short duration.

The salient features of the rates specified in Part III are indicated in the following paragraphs. Paragraph A, Part III of the First Schedule to the Bill provides the following income tax rates:

The rates of income-tax in the case of every individual (other than those mentioned in table 2 or table 3 below), Hindu undivided family, association of persons, body of individuals, whether incorporated or not, or every artificial juridical person referred to in Sub-clause (vii) of Clause 31 of Section 2 of the Income-tax Act (not being a case to which any other Paragraph of Part III applies) are outlined in table 1 below.

No surcharge shall be charged in cases of persons covered under Paragraph A, Part III of the First Schedule.

Cooperative societies
These rates will continue to be the same as those specified for the assessment year 2012-13. No surcharge shall be levied.

Firms
This rate will continue to be the same as that specified for the assessment year 2012-13. No surcharge shall be levied.

Local authorities
This rate will continue to be the same as that specified for the assessment year 2012-13. No surcharge shall be levied.

Companies
These rates are the same as those specified for the assessment year 2012-13.

The existing surcharge of 5 percent in case of a domestic company shall continue to be charged. In case of companies other than domestic companies, the existing surcharge of 2 percent shall continue to be levied.

On the other hand, the total amounts payable as income tax and surcharge on total income exceeding 1 crore rupees shall not exceed the total amount payable as income tax on a total income of 1 crore rupees by more than the amount of income that exceeds 1 crore rupees.

The existing surcharge of 5 percent in all other cases (including sections 115JB, 115-O, 115R) shall continue to be levied.

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