vinujaglan.com · Founder's official site How to read section numbers: s.80C→s.123 means Section 80C of the Income-tax Act, 1961 is now Section 123 of the Income-tax Act, 2025 (in force from 1 April 2026). Returns for FY 2025-26 still use the old numbers; Tax Year 2026-27 onwards uses the new ones. Section Finder
Rates by business form
| Entity | Base rate | Surcharge | Effective (max) |
|---|---|---|---|
| Sole proprietor | Slab | As for individuals | Up to 39% (new regime) |
| Partnership firm / LLP | 30% | 12% if income > ₹1 crore | 34.944% |
| Domestic company — concessional option | 22% | 10% flat | 25.168% |
| Domestic company — turnover up to ₹400 crore | 25% | 7% (> ₹1 cr), 12% (> ₹10 cr) | 29.12% |
| Domestic company — others | 30% | 7% / 12% | 34.944% |
Presumptive taxation s.44AD/44ADA/44AE→s.58
| Scheme | Who | Deemed profit | Limit |
|---|---|---|---|
| 44AD | Resident individual, HUF, firm (not LLP) in business | 6% of digital receipts, 8% of others | ₹2 crore (₹3 crore if cash receipts ≤ 5%) |
| 44ADA | Resident professionals (doctors, lawyers, CAs, engineers, consultants…) | 50% of receipts | ₹50 lakh (₹75 lakh if cash ≤ 5%) |
| 44AE | Goods-carriage owners (≤ 10 vehicles) | ₹1,000/ton/month (heavy), ₹7,500/month (others) | 10 vehicles |
When a tax audit is required
- Business turnover above ₹1 crore — or ₹10 crore where cash receipts and payments are each within 5%.
- Professional receipts above ₹50 lakh (₹75 lakh in specified cases).
- Declaring profit below the presumptive rate while income exceeds the basic exemption limit (after opting out within five years).
- The audit report (Form 3CA/3CB-3CD, now one Form 26) is signed by a practising Chartered Accountant.
Partners and LLPs
- Interest on partner capital up to 12% and remuneration within limits are deductible to the firm; TDS at 10% applies above ₹20,000 s.194T→s.393.
- A partner's share of profit is exempt in the partner's hands; interest and remuneration are taxable as business income.
- LLPs file Form 11 and Form 8 with MCA besides the income-tax return.
Frequently asked questions
Not always. An LLP pays about 31.2–34.9%, with no tax on profit share in partners' hands. A company can pay 25.17% under the concessional option, but dividends are taxed again in shareholders' hands. The right choice depends on profit level and how money is taken out.
F&O is non-speculative business, so presumptive taxation is possible within the turnover limit — but the five-year lock-in and audit consequences need a careful look first. See the trading guide.
No. A proprietorship is not a separate taxpayer; business profit is part of the owner's income.
