Surcharge @12% Levied on Individuals, HUFs, AOPs, BOIs, Artificial Juridical Persons, Firms, Cooperative Societies and Local Authorities Having Income Exceeding ₹ 1 Crore

The Union Finance Minister Shri Arun Jaitley in his Budget Speech in Lok Sabha today proposed no change in the rate of personal Income-tax. He announced the tax proposals with no change in the rate of tax for companies in respect of the income earned in the financial year 2015-16, assessable in the assessment year 2016-17.

 However, Finance Minister Shri Arun Jaitley proposed to levy a surcharge at the rate of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding ₹ 1 crore. Surcharge in the case of domestic companies having income exceeding ₹ 1 crore and upto ₹ 10 crore is proposed to be levied @ 7% and surcharge @ 12% is proposed to be levied on domestic companies having income exceeding ₹ 10 crore.

 Shri Jaitley further proposed that in the case of foreign companies the surcharge will continue to be levied @ 2% if the income exceeds ₹ 1 crore and is upto ₹ 10 crore, and @ 5% if the income exceeds ₹ 10 crore.

 It is also proposed to levy a surcharge @ 12% as against current rate of 10% on additional income-tax payable by companies on distribution of dividends and buyback of shares, or by mutual funds and securitization trusts on distribution of income.

 The education cess on income-tax @ 2% for fulfillment of the commitment of the Government to provide and finance universalized quality based education and 1% of additional surcharge called ‘Secondary and Higher Education Cess’ on tax and surcharge is proposed to be continued for the financial year 2015-16 for all taxpayers. 

Surcharge on high income taxpayers expanded and increased for companies; education cesses retained, altering post tax liability. The budget proposes a revised surcharge regime applying to high-income individuals and various non-corporate entities, higher surcharges on domestic companies as income rises, differentiated surcharge rates for foreign companies, and an increased surcharge on tax payable in respect of dividend distribution and share buyback; education cess and secondary and higher education cess are retained.