PART A: DIRECT TAX PROPOSALS
1.
RATES OF TAX
Clause 2 of the Finance
Bill 2025 proposes following tax rates:
a.
For
Individuals, HUFs, AOPs, BOIs and AJPs (Old regime)
[under The
First Schedule]
|
Existing (AY:2025-26) &
Proposed (AY 2026-27) - No change proposed |
|
|
Total
Income (In Rs.) |
I.Tax
Rates |
|
Upto
2,50,000 |
Nil |
|
2,50,001 to 5,00,000 |
5% + H&EC |
|
5,00,001 to 10,00,000/- |
20% + H&EC |
|
Above 10,00,000/- |
30% + H&EC |
|
50,00,001
to 1 Crore |
30% + SC*@10% + H&EC |
|
>1 Crore to 2 Crore |
30% + SC*@ 15% + H&EC |
|
>2 Crore to 5 Crore |
30% + SC*@ 25% + H&EC |
|
>5 crore |
30% + SC*@ 37% + H&EC |
|
* Surcharge @ 10% if Net Taxable
Income above 50 Lakhs and below 1 Crore |
|
|
* Surcharge @ 15% if Net Taxable
Income above 1 Crore and below 2 Crore |
|
|
* Surcharge @ 25% if Net Taxable
Income above 2 Crore and below 5 Crore |
|
|
* Surcharge @ 37% if Net Taxable
Income above 5 Crore |
|
|
Health
& Education Cess @ 4 % on IT + SC |
|
For Individuals, HUFs, AOPs,
BOIs and AJPs (New Regime u/s 115BAC(1A))
|
Existing (AY:2025-26) |
Proposed (AY:2026-27) |
||
|
Total Income (In Rs.) |
I.Tax
Rates |
Total Income (In Rs.) |
I.Tax
Rates |
|
Upto
3,00,000 |
Nil |
Upto 4,00,000 |
Nil |
|
3,00,001 to 7,00,000 |
5% + H&EC |
4,00,001 to 8,00,000 |
5% + H&EC |
|
7,00,001 to 10,00,000/- |
10% + H&EC |
8,00,001 to 12,00,000/- |
10% + H&EC |
|
10,00,001 to 12,00,000/- |
15% + H&EC |
12,00,001 to 16,00,000/- |
15% + H&EC |
|
12,00,001
to 15,00,000/- |
20% +
H&EC |
16,00,001
to 20,00,000/- |
20% +
H&EC |
|
|
|
20,00,001 to 24,00,000/- |
25% + H&EC |
|
Above 15,00,001/- |
30% + H&EC |
Above 24,00,001/- |
30% + H&EC |
|
50,00,001
to 1 Crore |
30% + SC*@10% + H&EC |
50,00,001
to 1 Crore |
30% + SC*@10% + H&EC |
|
>1 Crore to 2 Crore |
30% + SC*@ 15% + H&EC |
>1 Crore to 2 Crore |
30% + SC*@ 15% + H&EC |
|
>2 Crore |
30% + SC*@ 25% + H&EC |
>2 Crore |
30% + SC*@ 25% + H&EC |
|
* Surcharge @ 10% if Net Taxable
Income above 50 Lakhs and below 1 Crore |
|||
|
* Surcharge @ 15% if Net Taxable
Income above 1 Crore and below 2 Crore |
|||
|
* Surcharge @ 25% if Net Taxable
Income above 2 Crore |
|||
|
Health
& Education Cess @ 4 % on IT + SC |
|||
Note:
In a case where the total
income includes any income by way of dividend or income chargeable u/s. 111A,
u/s. 112 and u/s. 112A of the Act, the rate of surcharge on the amount of
income-tax computed on that part of the total income shall not exceed 15%. Hence,
the maximum rate of surcharge on tax payable on such incomes shall be 15%,
except when the income is taxable under section 115A, 115AB, 115AC, 115ACA and
115E.
With effect from A.Y. 2024-25, the slab rates as per Section 115BAC
will be the default slab rates and the assesses shall have an option to opt for
the old tax regime.
The assesses will have to choose from Option 1 and Option 2 for the
assessment year subject to fulfillment of certain conditions.
b.
Senior
Citizens: (Who is of the age of 60 years or more but less than 80 years)
The basic threshold limit is the same as Assessment Year 2025-26.
c.
Very
Senior Citizens: (Who is of the age of 80 years or more at any time during the
previous year)
The basic threshold limit
is same as Assessment Year 2025-26.
TAX REBATE U/s. 87A will also be
available as separately discussed in this publication.
d.
For Firms &
Limited Liability Partnership (LLP):
|
Existing (AY:2025-26) &
Proposed (AY 2026-27) - No change proposed |
|
|
Total
Income (In Rs.) |
I.Tax
Rates |
|
Upto 1
Crore |
30% + EC |
|
Above 1 Crore |
30% + SC@12% + EC |
|
Health
& Education Cess @ 4 % on IT + SC |
|
e.
For
Domestic Companies
|
Existing (AY:2025-26) &
Proposed (AY 2026-27) - No change proposed |
|
|
Condition |
I.Tax
Rates |
|
Total turnover or gross receipts
during FY 2021-22 does not exceed Rs. 400 crores |
25% + SC* + EC |
|
If opted for section 115BA |
25% + SC* + EC |
|
If opted for section 115BAA |
22% + SC@10% + EC |
|
If opted for section 115BAB |
15% + SC@10% + EC |
|
Any other domestic company |
30% + SC* + EC |
|
*Surcharge @ 7% if Net Taxable
Income above 1 crore but below 10 crores *Surcharge @ 12% if Net Taxable
Income above 10 crores Health
& Education Cess @ 4 % on IT + SC |
|
f.
For
Companies Other Than Domestic Companies
|
|
Existing (AY:2025-26) |
Proposed (AY 2026-27) |
|
Total
Income (In Rs.) |
I.Tax
Rates |
I.Tax
Rates |
|
Upto 1
Crore |
35% +
H&EC |
35% +
H&EC |
|
Above 1 Crore |
35% + SC@2% + H&EC |
35% + SC@2% + H&EC |
|
Above 10 Crore |
35% + SC@5% + H&EC |
35% + SC@5% + H&EC |
|
Health
& Education Cess @ 4 % on IT + SC |
||
g.
Minimum
Alternate Tax on Companies Other than Domestic Companies
|
Existing (AY:2025-26) &
Proposed (AY 2026-27) |
|
|
Total
Income (In Rs.) |
I.Tax
Rates |
|
Book Profit Up to 10 Crore |
15 % + SC@2% + H&EC |
|
Book Profit Above 10 Crore |
15 % + SC@5% + H&EC |
h.
For
Local Authorities:
|
Existing (AY:2025-26) &
Proposed (AY 2026-27) |
|
|
Total
Income (In Rs.) |
I.Tax
Rates |
|
Up to 1 crore |
30% + H&EC |
|
Above 1 Crore |
30% + SC + H&EC |
|
Surcharge
@ 12% if Net Taxable Income above 1 Crore |
|
|
Health & Education Cess @ 4 % on IT + SC |
|
i.
For
Cooperative Societies
|
Particulars |
Co-operative
Societies opting for 115BAD |
Co-operative
Societies opting for 115BAE |
Other
Co-operative Societies |
|
|
Business of
co-operative society |
any business |
manufacture/production
including electric generation |
any business |