Rate structure
Finance Act, 1990
Rates of income-tax in respect of incomes liable to tax for the assessment year 1990-91
3. In respect of incomes of all categories of taxpayers (corporate as well as non-corporate) liable to tax for the assessment year 1990-91, the rates of income-tax (including surcharge thereon) have been specified in Part I of the First Schedule to the Finance Act. These are the same as those laid down in Part III of the First Schedule to the Finance Act, 1989.
Accordingly, in the case of every person having income exceeding fifty thousand rupees, the amount of income-tax shall be increased by a surcharge for purposes of the Union calculated at the rate of eight per cent of such income-tax. However, no such surcharge shall be payable by a non-resident individual, HUF, unregistered firm, association of persons/body of individuals and a foreign company.
It may be noted that, in the case of individuals, Hindu undivided families (other than those having at least one member with independent total income exceeding the exemption limit), unregistered firms, associations of persons, bodies of individuals and artificial juridical persons, the rate of tax in respect of incomes liable to tax for the assessment year 1990-91, in the slab of income of Rs. 18,000 to Rs. 25,000, is 20 per cent. It was 25 per cent for the assessment year 1989-90.
Finance Act, 1990
Rates for deduction of tax at source during the financial year 1990-91 from income other than "Salaries"
4. The rates for deduction of income-tax at source during the financial year 1990-91 from incomes other than "Salaries" have been specified in Part II of the First Schedule to the Finance Act. These rates apply to income by way of interest including interest on securities, dividends, insurance commission, winnings from lotteries, crossword puzzles and horse races and income other than salary income of non-residents (including non-resident Indians). These rates are basically the same as those specified in Part II of the First Schedule to the Finance Act, 1989 for purposes of deduction of tax at source during the financial year 1989-90. In respect of payments referred to above, the amount of tax so deducted shall be increased by a surcharge calculated at the rate of 8 per cent of tax deducted. However, no deduction in respect of surcharge shall be made where the payment is made to a non-resident (including non-resident Indian) or to a foreign company.
Finance Act, 1990
Rates for deduction of tax at source from "Salaries", computation of "advance tax" and charging of income-tax in special cases during the financial year 1990-91
5. The rates for deduction of tax at source from "Salaries" during the financial year 1990-91 and also for the computation of "advance tax" payable during that year in the case of all categories of taxpayers have been specified in Part III of the First Schedule to the Finance Act. These rates are also applicable for charging income-tax during the financial year 1990-91 on current incomes in cases where accelerated assessments have to be made, e.g., provisional assessment of shipping profits arising in India to non-residents, assessment of persons leaving India for good during the financial year 1990-91, assessment of persons who are likely to transfer property to avoid tax or where an order has to be passed in a case of search and seizure for calculating the amount of tax on the estimated undisclosed income, etc.
Finance Act, 1990
6. The Finance Act, 1989 specified in Part III of the First Schedule that the amount of income-tax deductible or advance tax payable or income-tax payable, as the case may be, shall be increased by a surcharge calculated at the rate of 8 per cent of the tax so deductible or advance tax or income-tax so payable in the case of a person whose income exceeded fifty thousand rupees. The Finance Act, 1990 provides that the aforesaid surcharge shall be levied in the case of a person whose income exceeds seventy-five thousand rupees. However, no such surcharge shall be levied in a case where the payment is made to or advance tax or income-tax is payable on the income of a non-resident (including non-resident Indian) or a foreign company.
Finance Act, 1990
Individuals, Hindu undivided families, associations of persons, bodies of individuals
7. In the case of individuals, Hindu undivided families, associations of persons etc., the rates of income-tax have been specified in Paragraph A of Part III of the First Schedule to the Finance Act. The rate schedule applicable in the case of individuals, Hindu undivided families (other than those having at least one member whose total income exceeds the exemption limit), unregistered firms, associations of persons, bodies of individuals and artificial juridical persons has been restructured by raising the exemption limit from Rs. 18,000 to Rs. 22,000 and by introducing a new slab of income of Rs. 22,000 to Rs. 30,000 on which the rate of tax is 20 per cent. The next slab of income will be Rs. 30,000 to Rs. 50,000 on which the rate of tax shall be 30 per cent. For total income exceeding Rs. 50,000, the slabs of income and the rates of tax will remain unchanged.
The rates of income-tax as per the Finance Act, 1989 and the Finance Act, 1990 are indicated in the table below :—
TABLE
Finance Act, 1989
Finance Act, 1990
Income level
Marginal rate of tax
Income level
Marginal rate of tax
Upto Rs. 18,000
Nil
Upto Rs. 22,000
Nil
Rs. 18,000— 25,000
20 per cent
Rs. 22,000— 30,000
20 per cent
Rs. 25,000 — 50,000
30 per cent
Rs. 30,000 — 50,000
30 per cent
Rs. 50,000—1,00,000
40 per cent
Rs. 50,000 — 1,00,000
40 per cent
Above Rs. 1,00,000
50 per cent
Above Rs. 1,00,000
50 per cent

Finance Act, 1990
Co-operative Societies
8. In the case of co-operative societies, the rates of tax have been specified in Paragraph B of Part III of the First Schedule to the Finance Act. Although the exemption limit and the slabs of income remain the same, the rate of income-tax for each slab has been reduced.
The existing and new rates of income-tax are indicated in the table below :—
TABLE
Finance Act, 1989
Finance Act, 1990
Income level
Marginal rate of tax
Income level
Marginal rate of tax
Up to Rs. 10,000
15 per cent
Upto Rs. 10,000
10 per cent
Rs. 10,000 — 20,000
25 per cent
Rs. 10,000 — 20,000
20 per cent
Above Rs. 20,000
40 per cent
Above Rs. 20,000
35 per cent

Finance Act, 1990
Registered Firms
9. In the case of registered firms, the rates of tax have been specified in Paragraph C of Part III of the First Schedule to the Finance Act. The exemption limit has been raised from Rs. 10,000 to Rs. 15,000 and the rate schedule has been restructured for registered firms carrying on business and also for registered firms carrying on profession. The existing and new rates of income-tax are indicated in the table below :—
TABLE
Finance act, 1989
Finance act, 1990
Income level
Marginal rate of tax
Income level
Marginal rate of tax
Firms carrying on business
 
 
 
Upto Rs. 10,000
Nil
Up to Rs. 15,000
Nil
Rs. 10,000 - 25,000
5 per cent
Rs. 15,000 - 50,000
6 per cent
Rs. 25,000 - 50,000
7 per cent
Rs. 50,000 - 1,00,000
12 per cent
Rs. 50,000 - 1,00,000
15 per cent
Above Rs. 1,00,000
18 per cent
Above Rs. 1,00,000
24 per cent
 
 
Firms carrying on profession :
 
 
 
Up to Rs. 10,000
Nil
Up to Rs. 15,000
Nil
Rs. 10,000 - 25,000
4 per cent
Rs. 15,000 - 50,000
5 per cent
Rs. 25,000 - 50,000
7 per cent
Rs. 50,000 - 1,00,000
10 per cent
Rs. 50,000 - 1,00,000
13 per cent
Above Rs. 1,00,000
15 per cent
Above Rs.1,00,000
22 per cent
 
 

Finance Act, 1990
Local Authorities
10. In the case of local authorities, the rate of income-tax has been specified in Paragraph D of Part III of the First Schedule to the Finance Act, which is the same as in Part III of the First Schedule to the Finance Act, 1989.
Finance Act, 1990
Companies
11. In the case of companies, the rate of income-tax has been specified in Paragraph E of Part III of the First Schedule to the Finance Act. The rate of income-tax in the case of domestic companies has been reduced as under :—
            
 
Finance Act,
Finance Act,
 
1989
1990
In the case of a domestic company,—
 
 
(1) where a company is a company in which the public are substantially interested
50 per cent
40 per cent
(2) where a company is not a company in which the public are substantially interested—
 
 
(i) in the case of a trading company or an investment company
60 per cent
50 per cent
(ii) in any other case
55 per cent
45 per cent

The rate of tax for companies other than domestic companies is the same as in sub-paragraph II of paragraph E of Part I of the First Schedule to the Finance Act, 1989.
Finance Act, 1990
Partially integrated taxation of non-agricultural income with income derived from agriculture
12. As in the past, the Finance Act provides that in the case of individuals, Hindu undivided families, other associations of persons, etc., the net agricultural income will be taken into account for the computation of "advance tax" and charging of income-tax. These provisions are on the same lines as those in earlier years.
[Section 2 and the First Schedule of the Finance Act.]