Basic Direct Tax Slabs

Direct tax is charged on financial income of a person, corporation or other legal entities and keeps changing with each financial year. The slab and rates of direct tax for AY 2008-2009 OR FY 2007-2008 have been described below.

Income Tax for Individual:

For individuals other than women and senior citizen:
- Tax is nil if the taxable income is less than INR 110,000
- Rate is 10% for next INR 40,000
- Tax rate is 20% for next INR 100, 000, and its 30% for amount more than INR 250,000
- A surcharge of 10% of income tax is added to the tax payable amount if the taxable income more than INR 1,000,000
For ladies other than senior citizen:
- Tax is nil for first INR 145,000
- Rate is 10% for next INR 5,000
- Rate is 20% for next INR 100, 000, and it’s30% for amount more than INR 250,000
- A surcharge of 10% of income tax is added to the tax payable amount for taxable income more than INR 1,000,000 3)
For senior citizen:
- Tax is nil for first INR 195,000
- Rate is 20% for next INR 55,000
- Rate is 30% for taxable income more than INR 250,000
For other individual i.e. HUF, AOP and BOI:
Tax slabs are almost the same as individuals for such individuals other than women and senior citizen. i.e.
- Tax is nil for first INR 110,000
- Rate is 10% for next INR 50,000
- Rate is 20% for next INR 100,000, while it is 30% for amount more than INR 250,000.
- A surcharge of 10% of income tax is added to the tax payable amount for taxable income more than INR 1,000,000

Corporate Tax

Income is charged at a flat rate of 30% along with a 3% education cess so total 30.9% for domestic firms with taxable income less than INR 1 crore (10 million).
Income is levied taxed at a flat rate of 30% along with a 10% surcharge on tax and 3% education cess on tax plus surcharge making it to total 33.99% for domestic companies with taxable income more than INR 1 crore (10 million).
For foreign companies, income gets levied at a flat rate of 40% along with a 3% education cess to make it 41.2% overall.