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
Factory Building| 10%|
Furniture and fittings| 10%|
Plant and machinery | 15%|
Computers (including software)| 60%|
Motorcars other than those used in a business of running them on hire| 15%| Intangible assets (such as know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of a similar nature| 25%| For certain priority items, such as energy saving devices and pollution control equipment, depreciation is allowed at higher rates. Undertakings engaged in the business of generation or generation and distribution of power have the option of claiming tax depreciation at the above rates or on a straight-line basis at rates prescribed in the Income-tax Rules, 1962| Vary from 1.95% to 33.40%|
Incase of a new asset, depreciation is only charged for a full year if the asset is put to use for 180 days or more. If the asset is used less than 180 days, the depreciation is charged at half the prescribed rate.
6. Taxation of Know-how Fee in the hands of foreign companies The royalties/ technical fees payable to non-residents with a permanent establishment in India are taxed on a net basis. In contrast, the royalties/technical fees payable to non-residents without a permanent establishment in India are taxed on a gross basis. A 10% concessional tax rate is applicable if the agreement relates to a matter included in the industrial policy or if the agreement has been approved by the Government of India.
7. Double Tax avoidance agreements
Double Tax Avoidance Agreements override the Indian Income-tax Act provisions to the extent that they are more beneficial to the assessee. Concessional tax rates applicable under certain double tax avoidance conventions that India has signed with various countries.
8. Custom Tax
Customs duty is levied by the Central Government on the import of goods into, and export from India. The rate of customs duty applicable to a product to be imported/ exported depends upon on its classification under the Customs Tariff Act. With regard to exports from India, duty is...