An individual is considered resident in India if he is in India in tax year for:
A resident is "not ordinarily resident" in India in any tax year if he:
Income is categorized under five broad heads/classes where the taxable component of income is ascertained as per the rules for particular head/class of income followed by aggregation for determining total taxable income. These include:
Salaries – Received against services rendered and include wages, pension, fees, commission and taxable value of perquisites.
Income from house properties that comprise income that arises from use of residential/commercial properties. Here, only two prescribed deductions are permitted while computing income.
Profits and Gains from Business/Profession that covers income earned from business/profession that is net of permissible deductions, against revenue earned.
Capital Gains that covers gains which arise from transfer of capital assets and the period of holding determining classification of asset, which then determines manner of taxation. The gains comprise short-term assets and long-term capital assets.
Income from Other Sources that are residuary head/class of income covering any income not specifically dealt with under other heads.
For foreign nationals, Indian tax law provides exemption of income earned subject to prescribed conditions. This is based on conditions like –
|Income Range||Very senior Citizen(who is
80 years or above at any
time during previous year)
|Senior Citizen(who is 60 years
or above but below 80 years
at any time during previous year)
|General Category & non Resident
Other than (a) & (b)
|Upto Rs. 2,50,000||Nil||Nil||Nil|
|Rs. 2,50,001 to Rs. 3,00,000||Nil||Nil||5%|
|Rs. 3,00,001 to Rs 5,00,000||Nil||5%||5%|
|Rs. 5,00,001 to Rs 10,00,000||20%||20%||20%|
|Above Rs. 10,00,000||30%||30%||30%|
*For FY 2017-18, the Finance Minister has provided a maximum Rebate of Rs. 2,500 under Section 87A who are a RESIDENT INDIVIDUAL & Total Income Less Deductions (under Section 80) is equal to or less than Rs 3,50,000. If both the above conditions are satisfied, rebate of Rs 2,500 will be available under Section 87A. The rebate is limited to Rs 2,500. Which means if the total tax payable is lower than Rs 2,500, such lower amount of tax will be the rebate under section 87A. This rebate is applied on total tax before adding Education Cess(3%). This rebate is also available to Senior Citizens who are 60 years old but less than 80 years old.
Surcharge: 10% of income tax, where total income exceeds Rs.50 lakh but up to Rs.1 crore and 15% of income tax, where the total income exceeds Rs.1 crore.
Domestic Company - Turnover upto Rs. 50 crores
Domestic Company - Turnover exceeding Rs. 50 crores
Firms Foreign Company
Kinds of Taxes
Partnership Firms and LLPs (Limited Liability Partnerships) are to be taxed at the rate of 30%.
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