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Ghanshyam ParmarIncome Tax Rate for Companies FY 2018-19 AY 2019-20

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Income Tax Rate for Companies FY 2018-19 AY 2019-20


All companies registered in India are required to file income tax returns each year on or before September 30th. Under the Income Tax Act, company tax return filing falls under two categories, namely domestic company or foreign company.

Domestic Company


Domestic company is an Indian company (i.e. a company formed and registered under the Companies Act,1956 ) or any other company which, in respect of its income liable to tax, under the Income Tax Act, has made the prescribed arrangement for declaration and payments within India, of the dividends payable out of such income. A domestic company may be a public company or a private company.

Foreign Company


Foreign company is one whose control and management are situated wholly outside India, and which has not made the prescribed arrangements for declaration and payment of dividends within India.

Income Tax Rate for Domestic Companies


Income Tax rate for Domestic Companies for AY 2019-20 | FY 2018-19


The following income tax rates are applicable for domestic companies.

Turnover Details Tax Rate
Gross turnover upto 250 Cr. in the previous year 25%
Gross turnover exceeding 250 Cr. in the previous year 30%

Surcharge


The income tax computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge.

Taxable Income exceeding ₹ 1 Crore –  7% of computed income tax.


(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.)

Taxable Income exceeding ₹ 10 Crores – 12% of computed income tax.


(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crores by more than the amount of increase in taxable income.)

Health & Education Cess


Health and Education Cess is computed at 4% of the total of Income Tax and Surcharge.

Income Tax Rate for Foreign Companies


Income Tax Rate for Foreign Companies for AY 2019-20 | FY 2018-19



Nature of Income Tax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government
50%
Any other Income 40%

Surcharge


The income tax computed in accordance with above rates, and after being reduced by the amount of tax rebate shall be increased by a surcharge.

Taxable Income exceeding ₹ 1 Crore –  2% of computed income tax.


(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 1 crore by more than the amount of increase in taxable income.)

Taxable Income exceeding ₹ 10 Crores – 5% of computed income tax.


(However, the amount of Income Tax and Surcharge shall not increase the amount of income tax payable on a taxable income of ₹ 10 crores by more than the amount of increase in taxable income.)

Health & Education Cess


Health and Education Cess is computed at 4% of the total of Income Tax and Surcharge.

Minimum Alternate Tax


All companies are required to pay minimum alternate tax at the rate of 18.5% of book profit plus surchage and education cess, if the tax liability of the company is less than 18.5% of book profit.

Due Date for Company Tax Return Filing


All companies registered in India are required to file income tax return on or before the 30th of September. Companies incorporated between January – March can file MCA annual return after 18 months in the first year. However, the same type of exemption is not available under the Income Tax Act. Hence, even companies registered from January – March must file income tax return on or before 30th September of the same calendar year.

Type of Tax Return to be Filed by Company


Companies can file two types of income tax returns, namely ITR 6 and ITR 7. Most companies that are operated for profit need to file ITR 6.

Form ITR 6


Companies that are operating a business for profit must file Form ITR 6. Hence, private limited companies, limited companies and one person companies would be required to file Form ITR6.

Form ITR 7


ITR 7 must be filed by companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F). Hence, only Section 8 Company would be required to file income tax return in for ITR 7.

Return under section 139(4A) is required to be filed by companies in receipt of income derived from property held under trust or other legal obligation wholly for charitable or religious purposes or of income being voluntary contributions.
Return under section 139(4B) is required to be filed by a political party.
Return under section 139(4C) is required to be filed by
Scientific research association
News agency
Association or institution
Fund or institution or university or other educational institution or any hospital or other medical institution
Return under section 139(4D) is required to be filed by a university, college or other institution.
Return under section 139(4E) is required to be filed by a business trust.
Return under section 139(4F) is required to be filed by an investment fund.
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