Union Budget 2010 – Tax Card • MAT credit is available for 10 years

• Surcharge is applicable @ 7.5 percent in the case of

domestic companies if the adjusted book profits are in
These rates are subject to enactment of the Finance Bill 2010. The excess of INR 10,000,000. Marginal relief may be
rates are for the Financial Year 2010-11. available
• Education cess is applicable @ 3 percent on income-tax
1. Income Tax Rates (inclusive of surcharge, if any).
1.1 For Individuals, Hindu Undivided Families, Association of
Persons and Body of Individuals 3. Securities Transaction Tax
Securities Transaction Tax (STT) is levied on the value of
Total Income Tax Rates
taxable securities transactions as under:
Up to INR 160,000 (a)(b) NIL Transaction Rates Payable By

INR 160,001 to INR 500,000 10%

Purchase/Sale of equity shares, units
Purchaser /
of equity oriented mutual fund 0.125%
INR 500,001 to INR 800,000 20% Seller
(delivery based)
INR 800,001 and above(c) 30%
Sale of equity shares, units of equity
oriented mutual fund (non –delivery 0.025% Seller
(a) In the case of a resident woman below the age of based)
65 years, the basic exemption limit is INR 190,000
(b) In the case of a resident individual of the age of
Sale of an option in securities 0.017% Seller
65 years or above, the basic exemption limit is
INR 240,000
(c) Surcharge is not applicable Sale of an option in securities, where
0.125% Purchaser
option is exercised
(d) Education cess is applicable @ 3 percent on income-tax

1.2 For Co-operative Societies Sale of a futures in securities 0.017% Seller

Total Income Tax Rates

Sale of unit of an equity oriented fund
0.25% Seller
Up to INR 10,000 10% to the Mutual Fund

INR 10,001 to INR 20,000 20%

4. Wealth Tax
INR 20,001 and above 30% Wealth tax is imposed @ 1 percent on the value of specified
assets held by the taxpayer on the valuation date (31 March)
On the above, surcharge is not applicable. Education cess is in excess of the basic exemption of INR 3,000,000.
applicable @ 3 percent on income-tax.
5. Dividend Distribution Tax
1.3 For Local Authorities • Dividend distributed by an Indian Company is exempt
Local Authorities are taxable @ 30 percent. Surcharge is not from income-tax in the hands of many shareholders. The
applicable. Education cess is applicable @ 3 percent on Indian Company is liable to pay Dividend Distribution Tax
income-tax. (DDT) @ 16.609 percent (i.e. inclusive of surcharge and
education cess) on such dividends
1.4 For Firms [(including Limited Liability Partnership (LLP)] • The amount of dividend declared by the parent company
• Firms (including LLP) are taxable @ 30 percent (i.e. holding more than 50 percent of capital) is likely to
• Surcharge is not applicable be reduced by the amount of dividend received from its
• Education cess is applicable @ 3 percent on income-tax. subsidiary company for the purposes of computing DDT
payable by the parent company if:
1.5 For Domestic Companies - such dividend is received from its subsidiary
• Domestic companies are taxable @ 30 percent - the subsidiary has paid DDT on such dividend; and
• Special method for computation of total income of - the parent company is not a subsidiary of any other
insurance companies. The rate of tax on profits from life company
insurance business is 12.5 percent Further, dividend paid to any person for and on behalf of New
• Surcharge is applicable @ 7.5 percent if total income is in Pension System Trust is likely to be reduced.
excess of INR 10,000,000. Marginal relief may be • Income received by unit holders from a Mutual Fund is
available exempt from income-tax. The Mutual Fund (other than
• Education cess is applicable @ 3 percent on income-tax equity oriented mutual fund) is likely to pay income
(inclusive of surcharge, if any). distribution tax of:
- 27.681 percent (inclusive of surcharge and
1.6 For Foreign Companies education cess) on income distributed by a money
• Foreign companies are taxable @ 40 percent market mutual fund or a liquid fund
• Surcharge is applicable @ 2.5 percent if total income is in - 13.841 percent (inclusive of surcharge and
excess of INR 10,000,000. Marginal relief may be education cess) on income distributed to any
available person being an individual or a Hindu Undivided
• Education cess is applicable @ 3 percent on income-tax Family by a fund other than a money market
(inclusive of surcharge, if any). mutual fund or a liquid fund; and
- 22.145 percent (inclusive of surcharge and
2. Minimum Alternate Tax education cess) on income distributed to any other
• Minimum Alternate Tax (MAT) is levied @ 18 percent of person by a fund other than a money market
the adjusted book profits in the case of those companies mutual fund or a liquid fund.
where income-tax payable on the taxable income
according to the normal provisions of the Income-tax
Act, 1961 (the Act), is less than 18 percent of the
adjusted book profits

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6. Special rates for non-residents 8. Presumptive Taxation
(1) The following incomes in the case of non-resident are (1) In the case of a non-resident taxpayer
taxed at special rates on gross basis:
Rate at which income is
Nature of Income Rate(a) Business
presumed

Dividend(b) 20% Shipping(b) 7.5% of gross receipts

Interest received on loans given Exploration of mineral oil (b)(c) 10% of gross receipts
in foreign currency to Indian 20%
concern or Government of India Operations of Aircraft (b) 5% of gross receipts

Income received in respect of Turnkey power projects (b)(c) 10% of gross receipts
units purchased in foreign
20%
currency of specified Mutual
Funds / UTI
(2) All resident taxpayers

Rate at which income is

Business
For Agreements entered into: presumed
Royalty or fees for technical - After 31 May 1997 but before
services 1 June 2005 – @ 20% (i) Small Business
- After 1 June 2005 – @ 10% 8% of gross turnover/receipts
[excluding (ii)](a)(b)(c)(d)

Interest on FCCB, FCEB / INR 5,000 per month/ part of

10% (ii) Plying, leasing or hiring of
Dividend on GDRs(b) month for each heavy goods
trucks (person should not
vehicle.
own over 10 goods carriage
(a) These rates may further increase by surcharge and at any time during the
INR 4,500 per month/ part of
education cess previous year)(b)(c)
month for each light goods
(b) Other than dividends on which DDT has been paid vehicle.
(c) In case the non-resident has a Permanent
Establishment (PE) in India and the royalty/fees for (a) The gross receipts of the taxpayer do not exceed
technical services paid is effectively connected with INR 6,000,000
such PE, the same could be taxed @ 40 percent (plus (b) All deductions/expenses (including depreciation) shall
surcharge and education cess) on net basis be deemed to have been allowed

(2) Tax on non-resident sportsmen or sports association on (c) The taxpayer can claim lower profits, if he keeps and
specified income @ 10 percent plus applicable surcharge maintains specified books of accounts and obtains a
and education cess. tax audit report
(d) Applicable to Individuals, Hindu Undivided Families
7. Capital Gains and Firm - excludes LLP, tax payer availing deduction
under Section 10A, Section 10AA, Section 10B,
Short-term Long-term Section 10BA or Chapter VI-A(C) of the Act.
Particulars capital gains capital gains (3) Special code of tonnage tax on income earned by
tax rates(a) tax rates(a) domestic shipping companies.
Sale transactions of equity
shares / unit of an equity
15% Nil
oriented fund which attract
STT

Sale transaction other than

mentioned above:

Individuals (resident and Progressive slab

non-residents) rates

Firms including LLP

30% 20% / 10%(b)
(resident and non-resident)

Resident Companies 30%

Overseas financial 40% (corporate)

organisations specified in 30% (non- 10%
section 115AB corporate)

FIIs 30% 10%

Other Foreign Companies 40% 20% / 10%

Local authority 30%

20% / 10%(b)
Progressive slab
Co-operative Society
rates

(a) These rates may further increase by applicable

surcharge and education cess.
(b) 20 percent with indexation and 10 percent without
indexation (for units/ zero coupon bonds)

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Personal Tax Scenarios

Individual Income Level

500,000 1,000,000 1,500,000

Current Tax 55,620 210,120 364,620

Proposed Tax 35,020 158,620 313,120

Effective Tax Savings 20,600 51,500 51,500

Effective Tax Savings (%) 37 25 14

Resident women below

Income Level
65 years

500,000 1,000,000 1,500,000

Current Tax 52,530 207,030 361,530

Proposed Tax 31,930 155,530 310,030

Effective Tax Savings 20,600 51,500 51,500

Effective Tax Savings (%) 39 25 14

Resident senior citizen Income Level

500,000 1,000,000 1,500,000

Current Tax 47,380 201,880 356,380

Proposed Tax 26,780 150,380 304,880

Effective Tax Savings 20,600 51,500 51,500

Effective Tax Savings (%) 43 26 14

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KPMG network of independent member firms affiliated with
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