Income tax rates and surcharge framework established, with special agricultural income computation and education cesses applied. Clause 2 implements First Schedule rates for charging income-tax, tax withholding, advance tax and special case computations for the assessment year. It prescribes a specific method for including net agricultural income in tax computation by aggregating it with total income, determining tax on the aggregate, determining tax on the agricultural amount increased by the exemption band, and subtracting to obtain tax on total income, with modified exemption bands for senior residents. A surcharge framework and two education cesses overlay the base tax, and key definitions for domestic company, insurance commission and net agricultural income are provided or cross referenced.