Income Tax Rates for Local Authorities in India (AY 2022-23)

A flat income tax rate of 30% is applicable on the total income of the local authorities in India in respect of AY 2022-23, as per the Finance Act of 2022, after excluding the amount of exempt income under Section 10(20).

In addition, the surcharge, Health & Education Cess (HEC), and Alternate Minimum Tax (AMT) are applicable as follows:

Surcharge Rates

The amount of income tax so computed or as computed under the provisions of Section 111A, Section 112, or Section 112A of the Act shall be increased by a surcharge of 12% of such income tax in the case of a local authority having a total income exceeding one crore rupees, subject to provisions relating to marginal relief, if any.

Higher Education Cess (HEC) Rates

The aggregate amount of Income Tax and Surcharge, shall be subject to HEC @ 4%, in the case of every local authority.

Alternate Minimum Tax (AMT) Rates

AMT shall be applicable u/s 115JC at 18.5% of adjusted total income (ATI) + surcharge + HEC in cases where the local authority has claimed deductions u/s 80H to 80RRB (except 80P), 35AD, and 10AA. However, in respect of units of local authorities located in IFSC deriving income solely from convertible foreign exchange (CFE), AMT can be paid at the concessional rate of 9% (instead of 18.5%) + surcharge + HEC.

Related Posts: >> Finance Act, 2022 <<