Education cess & shec

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Querist : Anonymous

Querist : Anonymous (Querist)

07 October 2016 Dear Experts
Weather 2% Education cess and 1%
SHEC cess is applicable on income tax
I mean for firms/companies it is only 30% or 30.9%

Regds
Mukesh

Adv. RAVINDRA KRISHNA

Adv. RAVINDRA KRISHNA (Expert)

07 October 2016 Normal tax rates applicable to a firm
A firm is taxed at a flat rate of 30%. Apart from tax @ 30%, Education Cess is levied @ 2% of
income-tax and Secondary and higher Education Cess is levied @ 1% of income-tax.
Surcharge : Surcharge is levied @ 12% on the amount of income-tax where net income exceeds
Rs. 1 crore. In a case where surcharge is levied, EC of 2% and SHEC of 1% will be levied on the
amount of income-tax plus surcharge.

Normal Tax rates applicable to a domestic company
A domestic company is taxed at a flat rate of 30%. However, tax rate is 29% where turnover or
the gross receipt of the company in the previous year 2014-15 doesn't exceed Rs. 5 crore. Apart
from tax @ 30%, Education Cess is levied @ 2% of income-tax and Secondary and higher
Education Cess is levied @ 1% of income-tax.
Surcharge : In addition to tax at above rate, surcharge is levied @ 7% on the amount of incometax
if net income exceeds Rs. 1 crore but does not exceed Rs. 10 crore and @ 12% on the amount
of income-tax if net income exceeds Rs. 10 crore. In a case where surcharge is levied, EC of 2%
and SHEC of 1% will be levied on the amount of income-tax plus surcharge.

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