In the case of foreign companies (companies other than the domestic companies), there is no change in the tax rates proposed, in respect of FY 2022-23/ AY 2023-24, as per the Finance Bill 2022. Therefore the tax rates for foreign companies shall remain the same, as were specified for the FY 2021-22/ AY 2022-23 in the Finance Act 2021.
Proposed Income Tax Rates for Foreign Companies (FY 2022-23/ AY 2023-24)
Same as applicable for FY 2021-22/ AY 2022-23.
Income Tax Rates for Foreign Companies (FY 2021-22/ AY 2022-23)
Income tax rates for companies other than domestic companies (i.e. foreign companies) in respect of FY 2021-22/ AY 2022-23, as per the Finance Act, 2021 remained the same as were applicable in respect of FY 2020-21/ AY 2021-22, as per the Finance Act, 2020, i.e. no change from last year.
Income Tax Rates for Foreign Companies (FY 2020-21/ AY 2021-22)
Income tax rates for companies other than domestic companies (i.e. foreign companies) in respect of FY 2020-21/ AY 2021-22, as per the Finance Act, 2020, are as under:
|Nature of Income||Income Tax Rate|
|Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after 31/03/1961, but before 01/04/1976, or fees for rendering technical services in pursuance of an agreement made after 29/02/1964 but before 01/04/1976 and where such agreement has, in either case, been approved by the Central Government||50%|
|Any other income||40%|
In other words, in the case of a company other than a domestic company, royalties received from Government or an Indian concern under an approved agreement made after 31/03/1961 but before 01/04/1976, shall be taxed at 50%.
Similarly, fees for technical services received by such company from Government or Indian concern under an approved agreement made after 29/02/1964 but before 01/04/1976 shall be taxed at 50%.
On the balance of the total income of such company, the tax rate shall be 40%.
In addition, Surcharge, Health & Education Cess (HEC) and Minimum Alternate Tax (MAT) provisions, shall be applicable in the case of Foreign Companies, as under:
The tax so computed (including under provisions of Sections 111A, 112 or 112A of the Income-tax Act) shall attract surcharge at the rate of 2% where total income of such company exceeds Rs. 1 Crore but is upto Rs. 10 Crores and at the rate of 5% where total income of such company exceeds Rs. 10 Crore, subject to provisions relating to marginal relief.
The aggregate amount of Income Tax and Surcharge, shall be subject to HEC @ 4%, in all cases.
Where normal tax liability of the Foreign Company is less than 15% of the book profits, except in the case of companies covered under Explanation 4 of Section 115JB of the Income Tax Act, 1961, the MAT shall be applicable @ 15% of book profits. Besides, surcharge and Health and Education cess shall be applicable, as above.
|Income Tax Slabs/ Rates:||Income Tax Cess, Surcharge & Rebate|
|Resident Individuals||Education Cess Rates|
|NRIs/ HUFs/ AOP/ BOI/ AJP||Surcharge Rates|
|Partnership Firms and LLPs||Marginal Relief from Surcharge|
|Domestic Companies||Rebate u/s 87A for Individuals|