Income Tax Rates on Partnership Firms [A.Y. 2022-23] & [A.Y. 2021-22]

See the latest income Tax rates or income tax slab for partnership firms for A.Y.2022-23, A.Y.2021-22, A.Y.2020-21, A.Y.2019-20, A.Y. 2018-19, A.Y. 2017-18 A.Y.2016-17, A.Y. 2015-16 & A.Y. 2014-15“.

Income Tax Rates on Partnership Firms A.Y.2022-23

Long-term capital gain from equity shares, etc. u/s 112A 10%
Long-term Capital Gain u/s 112 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%

Surcharge – Surcharge is 12 per cent of income-tax if net income exceeds Rs. 1 crore. It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore).

Health and education cess – It is 4 per cent of income-tax and surcharge.

Non-resident firms shall also be liable to pay surcharge.

Tax is payable by partnership firms on the entire taxable income. There is no basic exemption, nor any slabs.

Income Tax Rates on Partnership Firms A.Y.2021-22

Long-term capital gain in excess of Rs.1 Lakh 10%
Long-term Capital Gain u/s 112 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%

Surcharge – Surcharge is 12 per cent of income-tax if net income exceeds Rs. 1 crore. It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore).

Health and education cess – It is 4 per cent of income-tax and surcharge.

Income Tax Rates on Partnership Firms A.Y.2020-21

Long-term capital gain in excess of Rs.1 Lakh 10%
Long-term Capital Gain 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%

Alternate minimum tax – Tax payable by firm cannot be less than 18.5% (+SC+HEC) of adjusted total income as per section 115JC.

Surcharge – Surcharge is 12 per cent of income-tax if net income exceeds Rs. 1 crore. It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore).

Health and education cess – It is 4 per cent of income-tax and surcharge.

Income Tax Rates on Partnership Firms A.Y.2019-20

Long-term capital gain in excess of Rs.1 Lakh 10%
Long-term Capital Gain 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%

Surcharge – Surcharge is 12 per cent of income-tax if net income exceeds Rs. 1 crore. It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs. 1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total income of Rs. 1 crore by more than the amount of income that exceeds Rs. 1 crore).

Health and education cess – It is 4 per cent of income-tax and surcharge.

Income Tax Rates on Partnership Firm for A.Y. 2018-19

Long-term Capital Gain 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%
  • Surcharge: 12% (where taxable income including capital gains exceeds Rs.1 crore). It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs.1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total on total income of Rs.1 crore by more than the amount of income that exceeds. Rs.1 crore.
  • Education Cess & Secondary & Higher Education Cess: 3 % (on the amount of income-tax and surcharge
  • Alternate minimum tax – Tax payable by firm cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income as per section 115JC

Income Tax Rates on Partnership Firm for A.Y. 2017-18

Long-term Capital Gain 20%
Short-term Capital Gain u/s 111A 15%
Other Income 30%
  • Surcharge: 12% (where taxable income including capital gains exceeds Rs.1 crore). It is subject to marginal relief (in the case of a firm having a net income of exceeding Rs.1 crore, the amount payable as income tax and surcharge shall not exceed the total amount payable as income-tax on total on total income of Rs.1 crore by more than the amount of income that exceeds. Rs.1 crore.
  • Education Cess & Secondary & Higher Education Cess: 3 % (on the amount of income-tax and surcharge
  • Alternate minimum tax – Tax payable by firm cannot be less than 18.5% (+SC+EC+SHEC) of adjusted total income as per section 115JC

Income Tax Rates on Partnership Firm for A.Y. 2016-17

  • Flat Rate of 30%
  • Long – term capital gains shall be taxable @20%
  • Short -term capital gains from shares/securities, subjected to Securities Transaction Tax @15%
  • Surcharge is payable @12% in case of firms having total income above Rs.1 crore (10% for A.Y.2015-16 as given below). Besides, Education Cess @2% and Secondary & Higher Education Cess @1% of income-tax and surcharge shall be leviable.

Income Tax Rates on Partnership Firm for A.Y. 2015-16

Income Tax RateSurcharge Education Cess
30% on whole of the income10% surcharge will be applicable where total taxalbe income is over Rs.1 Crore. 3% (2% of income tax and Additional Secondary & Higher Education Cess @ 1% is also levied on all assessees.

Income Tax Rates on Partnership Firm for A.Y. 2014-15

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A partnership firm for the purpose of income tax means a partnership firm includes a limited liability partnership firm.

Partnership Taxation

Partnership firm is treated as a separate entity. It is immaterial that partnership is registered or not registered. So partnership firm is taxes under the income tax slab for partnership firm and partners are taxes under the income tax slab for individuals.

Partnership Income Tax Slab/ Income Tax Rates on Partnership Firm for A.Y. 2013-14 

Partnership Firm are taxed at a flat rate irrespective of income for the A.Y.2013-14 or F.Y.2012-13 as follows

  • Tax rates on partnership firm is 30%
  • Any long term capital gains  shall be taxable @ 20%
  • Short term capital gains shall be taxable @ 15%
  • Education cess @2% and secondary & higher education cess @1% will be applicable. However surcharges has eliminated from A.Y.2012-11.

FAQ Related to Partnership Income Tax Rates/Slab

Q.#1: Is partnership firm liable to deduct tax at source on partner salary and interest?

As the partner are individually taxed by the income tax slab on individuals. But the firm is not required to deducted TDS on the partner’s salary and interest paid to the partners.

Q.#2: Is partner’s share profit exempt from income tax while calculating partner’s income tax?

Yes the share of profit is exempt from income tax as it is already taxed according to the income tax slab for partnership firms.

Q.#3 How to calculate income tax of partnership firms according to income tax slab on partnership firms?

Ans. In computing the total income of the firm, any salary, commission, remuneration and bonus to a partner shall be deductible subject to certain restriction.

Q.#4 What is Alternate Minimum Tax (AMT)?

Ans. The provision relating to Alternate Minimum Tax introduced in A.Y. 2012-13 for Limited Liability Partnership (LLPS). Now, it has extended to all partnership firms w.e.f. A.Y.2013-14. The deduction under section 80HH to 80RRB is claimed only by paying minimum tax @ 18.5% on adjusted total income of partnership firms or LLPs.

Hope, now you all know the income tax rates on partnership firm. We will cover other aspects like filing of income tax return of partnership firm, assessment of partnership firms and book profit.

7 thoughts on “Income Tax Rates on Partnership Firms [A.Y. 2022-23] & [A.Y. 2021-22]”

  1. if my firm nett profit is less than 8% after deduction of remuneration and interest on capital to partners , do we require to get statutary audit of our a/cs for F.Y. 2017-18?
    pl provide information

    Reply
  2. Could we please request for an Automatic Income Tax Calculator for Partnership Firms with all possible sections to save maximum amount of tax payable?

    Reply
  3. I AM AJIT KUMAR SOLANKI. FROM JAIPUR, RAJASTHAN, INDIA. I WANT 2011 TO 2015. MY ALL BUSINESS SEARCH ALL INFORMATION, AND INCOME TEX INFORMATION, TDS, ALL BUSINESS RELATED INFORMATION SEND MY E-MAIL ID PLEASE SIR HELP ME. THANKX.

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  4. I am interested to know the ways of exemption from IT for a partnership firms like if say if a term insurance is taken for all partners then it’s premium is exempted?
    Or say if any other plan of insurance where the individual is getting a tax free income in lump sum is the premium exempted from the firms account?

    Reply

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