Disclaimer: Tax laws are subject to change. For the most accurate and up-to-date information, please consult with a tax professional.
Understanding the Complexity
Unlike individual income tax, which has relatively straightforward slabs, business income tax is more complex due to various factors like:
- Type of business entity: Individual, partnership, LLP, or company.
- Turnover or gross receipts: Impacting eligibility for certain tax regimes.
- Accounting methods: Cash or accrual basis.
- Deductions and exemptions: Available based on business nature and expenses.
General Overview
While providing exact slabs is challenging without specific details, here’s a general outline based on common scenarios:
Individual Business Owners
If you’re an individual running a business, your business income is added to your other income sources to determine your overall tax liability. You’ll then fall under the regular income tax slabs for individuals.
Partnership Firms and LLPs
- Tax rate: Generally 30% on taxable income.
- Surcharge: Applicable based on total income.
- Health and Education Cess: 4% on total tax.
Companies
- Normal tax rate: 25% for companies with turnover up to ₹250 crore.
- Higher tax rate: 30% for companies with turnover exceeding ₹250 crore.
- Surcharge: Applicable based on total income.
- Health and Education Cess: 4% on total tax.
- Minimum Alternate Tax (MAT): Applicable if income tax is less than 15% of book profits.
Important Considerations
- Presumptive Taxation: Certain businesses with turnover below specific limits can opt for presumptive taxation, where income is deemed to be a percentage of turnover.
- Deductions and Exemptions: Various deductions and exemptions can reduce taxable income.
- Advance Tax: Regular payments of estimated tax liability throughout the year.
Helpful Resources:
- Income Tax Department: https://www.incometax.gov.in/
