Tax rate on Foreign company for AY 2015-16 & 2016-17

Discussion in 'Income Tax' started by Raju Choudhary, Nov 28, 2015.

  1. Raju Choudhary

    Raju Choudhary Active Member Staff Member

    Tax rate on Foreign company for AY 2015-16 & 2016-17

    A. Income Tax
    Assessment Year 2015-16 and Assessment Year 2016-17

    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%

    Add
    • a) Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 2% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 5% of such tax, where total income exceeds ten crore rupees. However, the surcharge shall be subject to marginal relief, which shall be as under:
    • (i) Where income exceeds one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of one crore rupees by more than the amount of income that exceeds one crore rupees.
    • (ii) Where income exceeds ten crore rupees, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.
    • b) Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by education cess calculated at the rate of two per cent of such income-tax and surcharge.
    • c) Secondary and Higher Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by secondary and higher education cess calculated at the rate of one per cent of such income-tax and surcharge.
    B. Minimum Alternate Tax

    A company shall be liable to pay MAT @ 18.5% of book profit (plus surcharge and education cess as applicable) where the normal tax liability of the company is less than 18.5% of book profit.However, with effect from assessment year 2016-17, a foreign company shall not be liable to pay MAT on following incomes if income-tax payable thereon under the normal provisions is at a rate less than 18.5%
    • capital gains arising from transfer of securities,
    • interest,
    • royalty and
    • fees for technical services
     
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