Clause 2. - RATES OF INCOME-TAX

Income-tax rates and surcharge framework updated, governing tax charging, withholding and advance tax obligations with education cesses applied.

Clause 2 prescribes rates for charging, deducting and computing income-tax for assessment year 2012-2013 and financial year 2012-2013, including surcharges and education cesses. It sets a mechanism for treating net agricultural income above the threshold by aggregating it with total income for rate determination but exempting it from taxation, computing tax on the aggregate and subtracting tax on agricultural income increased by the threshold to arrive at tax on total income. Special regimes, withholding rules, differentiated surcharges for company categories, and definitions for terms such as domestic company are incorporated.