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.]