Introduction
The Indian income tax system follows a progressive slab-based structure, applicable to both individuals and non-individual entities. Under this framework, taxpayers are categorized into income brackets or “slabs,” with each slab attracting a specified tax rate. Higher income levels are taxed at proportionately higher rates to ensure equity in the tax burden.
This article outlines the applicable tax slabs and rates for various non-individual entities such as Associations of Persons (AOPs), Bodies of Individuals (BOIs), Artificial Juridical Persons, Co-operative Societies, and Domestic Companies for the Assessment Year (AY) 2025–26. It also covers relevant surcharge, cess, and special provisions.
1. Tax Rates for AOPs, BOIs, and Artificial Juridical Persons
Comparative Tax Slabs under Old and New Regimes
| Income Range | Tax Rate (Old Regime) | Income Range | Tax Rate (New Regime) |
| Up to ₹2,50,000 | Nil | Up to ₹3,00,000 | Nil |
| ₹2,50,001 – ₹5,00,000** | 5% above ₹2,50,000 | ₹3,00,001 – ₹7,00,000** | 5% above ₹3,00,000 |
| ₹5,00,001 – ₹10,00,000 | ₹12,500 + 20% above ₹5,00,000 | ₹7,00,001 – ₹10,00,000 | ₹20,000 + 10% above ₹7,00,000 |
| ₹10,00,001 – ₹50,00,000 | ₹1,12,500 + 30% above ₹10,00,000 | ₹10,00,001 – ₹12,00,000 | ₹50,000 + 15% above ₹10,00,000 |
| ₹50,00,001 – ₹1,00,00,000 | As above + 10% surcharge | ₹12,00,001 – ₹15,00,000 | ₹80,000 + 20% above ₹12,00,000 |
| ₹1,00,00,001 – ₹2,00,00,000 | As above + 15% surcharge | ₹15,00,001 – ₹50,00,000 | ₹1,40,000 + 30% above ₹15,00,000 |
| ₹2,00,00,001 – ₹5,00,00,000 | As above + 25% surcharge | ₹50,00,001 – ₹1,00,00,000 | ₹1,40,000 + 30% above ₹15,00,000 + 10% surcharge |
| Above ₹5,00,00,000 | As above + 37% surcharge | ₹1,00,00,001 – ₹2,00,00,000 | ₹1,40,000 + 30% above ₹15,00,000 + 15% surcharge |
| Above ₹2,00,00,001 | ₹1,40,000 + 30% above ₹15,00,000 + 25% surcharge |
Notes:
- Enhanced surcharge of 25% and 37% is not applicable on income taxable under sections 111A, 112, 112A, and dividend income. The maximum surcharge on such income is capped at 15%, except for incomes taxable under sections 115A, 115AB, 115AC, 115ACA, and 115E.
- In cases where an AOP consists exclusively of corporate members, the surcharge rate is restricted to 15% (effective from AY 2023–24).
- Health and Education Cess @ 4% is levied on the total of income tax and surcharge (if applicable).
- Tax liability of AOPs/BOIs also depends on whether the share of members is determinate or indeterminate.
2. Taxation of Co-operative Societies
| Income Range | Tax Rate | EC & SHEC (on tax + surcharge) |
| Up to ₹10,000 | 10% | 3% |
| ₹10,001 – ₹20,000 | 20% | 3% |
| Above ₹20,000 | 30% | 3% |
3. Tax Slabs for Domestic Companies (AY 2025–26)
| Condition | Applicable Tax Rate |
| Turnover/Gross Receipts (PY 2020–21) ≤ ₹400 crore | 25% |
| Opting for Section 115BA (New manufacturing companies) | 25% |
| Opting for Section 115BAA (Standard reduced rate) | 22% + 10% surcharge + 4% cess |
| Opting for Section 115BAB (Newly incorporated manufacturers)* | 15% + surcharge + cess |
| Other Domestic Companies | 30% |
* To qualify under Section 115BAB, companies must be incorporated on or after October 1, 2019, and must commence manufacturing by March 31, 2024.
4. Surcharge, Marginal Relief, and Health & Education Cess
Surcharge
Surcharge is an additional levy on income tax for entities earning above specified thresholds:
- 7%: Taxable income above ₹1 crore up to ₹10 crore
- 12%: Taxable income exceeding ₹10 crore
- 10%: Applicable for companies opting under Sections 115BAA or 115BAB
Marginal Relief
Marginal relief is granted where the surcharge payable exceeds the incremental income that triggered such surcharge. It ensures that the additional tax liability does not disproportionately exceed the increase in income beyond ₹1 crore or ₹10 crore.
Health and Education Cess
A uniform Health and Education Cess @ 4% is levied on the total tax liability (including surcharge, if any) across all categories.
5. Minimum Alternate Tax (MAT)
- Companies are required to pay MAT @ 15% of book profits (plus surcharge and cess) when normal tax liability is lower.
- For units in an International Financial Services Centre (IFSC) earning solely in convertible foreign exchange, MAT is levied at 9%.
- Exemption from MAT is available for companies opting for the concessional tax regimes under Sections 115BAA and 115BAB.
- Companies availing these special regimes are also not eligible for various deductions (e.g., under Sections 80IA to 80IB), except Sections 80JJAA and 80M.
Disclaimer
The information provided herein is for informational purposes only and should not be construed as financial, legal, or tax advice. While efforts have been made to ensure accuracy, the contents are subject to change based on future amendments or judicial decisions. Readers are advised to consult a qualified tax professional or financial advisor before making any decisions based on the above information.
