Income Tax Rates for Foreign Companies (FY 2018-19/ AY 2019-20)

Income tax rates for companies other than domestic companies (i.e. foreign companies) in respect of FY/ PY 2018-19 (AY 2019-20), subject to application/ addition of Health & Education Cess and Surcharge, are as under:

Nature of IncomeIncome Tax Rate
Royalty received from Government or an Indian concern in pursuance of an agreement made with the Indian concern after March 31, 1961, but before April 1, 1976, or fees for rendering technical services in pursuance of an agreement made after February 29, 1964 but before April 1, 1976 and where such agreement has, in either case, been approved by the Central Government50%
Any other income40%

In other words, in the case of a company other than a domestic company, royalties received from Government or an Indian concern under an approved agreement made after 31.03.1961 but before 01.04.1976, shall be taxed at fifty per cent. Similarly, fees for technical services received by such company from Government or Indian concern under an approved agreement made after 29.02.1964 but before 01.04.1976 shall be taxed at fifty per cent. On the balance of the total income of such company, the tax rate shall be forty per cent. The tax computed shall continue to be enhanced by a surcharge of two per cent where such company has total income exceeding one crore rupees but not exceeding ten crore rupees. Surcharge at the rate of five per cent shall continue to be levied if the total income of such company exceeds ten crore rupees.

Further, to arrive at total income tax liability of a foreign company, the Health & Education Cess and Surcharge are to be added/ applied, as under:

i) Health & Education Cess @ 4% in all cases; and

ii) Surcharge @ 2% / 5% in cases where total income of the Foreign company is above Rs. 1 crore but below Rs. 10 crore/ above Rs. 10 crore respectively, subject to provisions relating to marginal relief, if applicable.

Related Posts:

Income Tax Slabs/ Rates:Income Tax Cess, Surcharge & Rebate
Resident IndividualsEducation Cess Rates
NRIs/ HUFs/ AOP/ BOI/ AJPSurcharge Rates
Partnership Firms and LLPsMarginal Relief from Surcharge
Domestic CompaniesRebate u/s 87A for Individuals
Foreign Companies 
Co-operative Societies 
Local Authorities 

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