INCOME-TAX

I. Rates of income-tax in respect of incomes liable to tax for the assessment year 2001-2002.

In respect of incomes of all categories of tax payers (corporate as well as non-corporate) liable to tax for the assessment year 2001-2002, the rates of income-tax have been specified in Part I of the First Schedule to the Bill and are the same as those laid down in Part III of the First Schedule to the Finance Act, 2000, for the purposes of computation of “advance tax”, deduction of tax at source from “Salaries” and charging of tax payable in certain cases during the financial year 2000-2001. It is also specified that in the case of individuals, Hindu undivided families association of persons and body of individuals having total income above Rs.60,000 but not exceeding Rs.1,50,000, the tax so computed after rebate under Chapter VIII-A shall be enhanced by a surcharge of twelve percent. It is further specified that in the case of individual, Hindu undivided families, association of persons and body of individuals having total income above Rs.1,50,000, the tax so computed, after rebate under Chapter VIII-A shall be increased by a surcharge of seventeen per cent. In the case of an artificial juridical person, a firm, a local authority, and a co-operative society the tax so computed shall be increased by a surcharge of twelve per cent. In the case of domestic company, the tax so computed shall be enhanced by a surcharge of thirteen per cent.

II. Rates for deduction of income-tax at source during the financial year 2001-2002 from income other 
     than “Salaries”

The rates for deduction of income-tax at source during the financial year 2001-2002 from incomes other than “Salaries”, have been specified in Part II of the First Schedule to the Bill. These rates apply to income by way of interest on securities, interest other than interest on securities, insurance commission, winnings from lotteries or crossword puzzles, winnings from horse races and income of non-residents (including non-resident Indians). These rates are broadly the same as those specified in Part II of the First Schedule to the Finance Act, 2000, for the purposes of deduction of income-tax at source during the financial year 2000-2001 except that the rate of tax to be deducted from winnings from lotteries or crossword puzzles and winnings from horse races has been reduced from forty per cent  to thirty per cent. Tax will be deducted at source also from winnings from card games and other games of any sort at the rate of thirty per cent. The tax deducted at source in each cases shall be enhanced by a surcharge of two per cent.. However, no surcharge will be payable by a foreign company.


III. Rates for deduction of income-tax at source from “Salaries”, computation of “advance tax” and  
      
charging of  income-tax in special cases during the financial year 2001-2002.

The rates for deduction of income-tax at source from “Salaries” during the financial year 2001-2002 and also for computation of “advance tax” payable during that year in the case of all categories of tax payers 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 2001-2002 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 that financial year or assessment of  persons who are likely to transfer property to avoid tax, etc. The salient features of the rates specified in the said Part III are indicated in the following paragraphs:-

A. Individuals, Hindu undivided families, etc.

Paragraph A of Part III of the First Schedule specifies the rates of income tax in the case of individuals, Hindu undivided families association of persons etc.

No changes is proposed in the rate structure. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of two per cent of the tax payable (after allowing rebate under Chapter VIII-A) in cases of persons having total income exceeding Rs. 60,000/- No surcharge would be payable by persons having incomes of Rs. 60,000/- or below. Marginal relief would be provided to ensure that the additional amount of income tax payable, including surcharge, on the excess of income over Rs. 60,000/- is limited to the amount by which the income is more than 60,000/-

The table below gives the income slabs and the rates of income tax. Column (a) specifies the rates given in paragraph A of part I of the first Schedule to the Bill; and column (b) specifies the rates given in paragraph A of part III of the First Schedule to the Bill.

(a)

(b)

Income slab

 

Rates as specified in Part I of First Schedule of First Schedule to the Bill (i.e. existing rates)

Income slab

Rates as specified in part II of First Schedule to the Bill (i.e. proposed rates)

Upto Rs. 50,000

Nil

Upto Rs. 50,000

Nil

Rs. 50,001 to Rs. 60,000

10%

Rs. 50,001 to Rs. 60,000

10%

Rs. 60,001 to Rs. 1,50,000

20%1

Rs. 60,001 to Rs. 1,50,000

20%2

Above Rs. 1,50,000

30%3

Above Rs. 1,50,000

30%4

1. Persons in this slab would be required to pay twelve per cent, surcharge on the total income-tax payable   
     after rebate under Chapter III-A.

2. Persons in this slab would be required to pay two per cent, surcharge on the total income-tax payable after 
    rebate under Chapter VIII-A.

3. Persons in this slab would be required to pay seventeen per cent, surcharge on the total income-tax payable
    after rebate under Chapter VIII-A.

4. Persons in this slab would be required to pay two per cent, surcharge on the total income-tax payable after
    rebate under Chapter VIII-A.

The impact of levy of surcharge in the case of individuals, HUFs etc.
at different income levels would be as under: 

 

Total income (Rs.)

Existing Tax
Liability (Rs.)

New Tax
Liability (Rs.)

Tax saving
(Rs.)

Tax saving
(%)

50,000

Nil

Nil

Nil

Nil

55,000

500

500

Nil

Nil

60,000

1000

1000

Nil

Nil

60,010

1010*

1010*

Nil

Nil

60,020

1020*

1020*

Nil

Nil

60,050

1050*

1030

20

1.90

60,100

1100

1040

60

5.45

60,200

1165

1061

104

8.93

65,000

2240

2040

200

8.93

75,000

4480

4080

400

8.93

1,50,000

21280

19380

1900

8.93

1,50,100

21380@

19411

1969

9.21

1,50,500

21780@

19533

2247

10.32

2,00,000

39780

34680

4100

12.82

3,00,000

74880

65280

9600

12.82

4,00,000

109980

95880

14100

12.82

5,00,000

145080

126480

18600

12.82

10,00,000

320580

279480

41100

12.82

* Marginal relief would be provided to ensure that the additional income-tax payable, including surcharge, on the excess of income 
    over Rs. 60,000 is limited to the amount by which the income is more than Rs. 60,000.

@ Marginal relief would be provided to ensure that the additional income tax payable, including surcharge, on the excess of income 
     over Rs. 1,50,000 is limited to the amount by which the income is more than Rs. 1,50,000.


B. Co-operative societies

In the case of co-operative societies, the rates of income tax have been specified in Paragraph B of Part III of the First Schedule to the Bill. These rates are the same as those specified in the corresponding Paragraph of part I of the First Schedule to the Bill, except that the maximum marginal rate leviable on the incomes above Rs. 20,000/- has been reduced to 30% from the existing 35%. However, the tax payable would be enhanced by a surcharge for the purpose of the Union at the rate of two per cent of the Tax payable.

C. Firms

In case of firsts, the rate of income tax has been specified in Paragraph C of Part III of the First Schedule to the Bill. This rate remains at 35 per cent. However, the tax payable by the resident firms would be enhanced by a surcharge for the purposes of the Union at the rate of two per cent of the tax payable.

D. Local authorities 

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 Bill. This rate is the same as that specified in the corresponding paragraph of Part I of the First Schedule to the Bill. However, the tax payable would be enhanced by a surcharge for the purposes of the Union at the rate of two per cent. Of the tax payable.

E. Companies

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 Bill. There is no charge in the existing rates of 35 per cent for domestic companies and 48 per cent for foreign companies. However, the tax payable by domestic companies would be enhanced by a surcharge for the purpose of the Union at the rate of two per cent of the tax payable.

 

 

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