Income tax slabs applicable to income earned from running a proprietorship business or via professional services are the same as the slabs applicable to other types of income example salary income but the slabs/rates are different for partnerships and companies.
Income tax on salaried individual is charged as per the slab rate on the basis of their income. Individuals having business as sole proprietor or working as a professional had the same income tax slabs as salaried individuals. Further, if a soul proprietor ship business is run by senior citizen or super senior citizens, then they are eligible for higher tax exemption limit – just like a retired senior super senior citizen would Gate. Such taxpayers also have an option to pay tax under the new tax regime (effective from April 1, 2020) for the incomes and from proprietor business. However, income tax return different for partnership firm or company registered under the companies act.
Given below are the income tax slab for sole proprietorships, professionals, partnership firms and companies for FY 2022-23 (AY 2023-24).
Income Tax Slabs for sole proprietorships and professionals
The income tax slabs under the old income tax regime for Sole proprietorship businesses and professionals as same as salaried class. However, individuals running proprietorship businesses or offering professional services (such as lawyer, doctor etc), are eligible for many deductions at salaried individuals are not. Similarly, there are certain deductions that can be claimed only by salaried employees.
Old income tax free gems left for proprietor ship business, professionals below 60 years
| Total income range (Rs) | Income tax rate (excluding surcharge and cess) |
| 0 to 2,50,000 | NIL |
| 2,50,001 to 5,00,000 | 5% |
| 5,00,001 to 10,00,000 | 20% |
| 10,00,001 to above | 30% |
Old income tax returns slabs for senior citizens who are sole proprietors or are professionals
| Total income range (Rs) | Income tax rate (excluding surcharge and cess) |
| 0 to 3,00,000 | NIL |
| 3,00,001 to 5,00,000 | 5% |
| 5,00,001 to 10,00,000 | 20% |
| 10,00,001 to above | 30% |
sheets RS 50 lakhs.
Old income tax regime slabs for super senior citizens who are sole proprietor or are professionals
| Total Income range (Rs) | Income Tax Rate (Excluding surcharge and cess) |
| 0 to 5,00,000 | NIL |
| 5,00,001 to 10,00,000 | 20% |
| 10,00,001 and above | 30% |
New Income Tax Regime slabs for sole proprietorships and professionals
An individual running a soul proprietor ship business or working as a professional is also eligible to opt phone new income tax return. However, they will not be able to claim such as specified deductions and tax exemptions and specify under the law. The tax slabs, rates and the new income tax regime are the same for all proprietorships or professionals irrespective of age unlike those under the old income tax regime.
Income tax slabs applicable under the new income tax regime
| Total Income Range (Rs) | Income tax rate (Excluding surcharge and cess) |
| 0 to 2,50,000 | NIL |
| 2,50,001 to 5,00,000 | 5% |
| 5,00,001 to 7,50,001 | 10% |
| 7,50,001 to 10,00,000 | 15% |
| 10,00,001 to 12,50,000 | 20% |
| 12,50,001 to 15,00,000 | 25% |
| 15,00,001 and above | 30% |
Income tax slabs for partnership firms
There is no slab rate for partnership firms including Limited liability partnerships, and they are charged at a flat rate. For financial year 2022-23 incomes earned by these firms are taxed at 30%. Further, surcharge at the rate of 12% is clickable if total income exceed Rs 1 Crore. Further health and education cess at the rate 4% is levied on income tax amount.
Income Tax Return Filing in Delhi
Income Tax Return Filing of Company in Delhi
Income Tax Return Filing in Patna
Income tax slab for domestic companies
The income tax slabs mentioned in the table below are applicable for domestic companies that are registered under the companies act, 2013.
Income Tax slab for domestic companies for FY 2022-23
| Condition | Income Tax Rate (Excluding surchage and cess) |
| If turnover or gross receipt in FY 2020-21 exceeds Rs 400 Crore | 30% |
| If turnover or gross receipt in FY 2020-21 does not exceed Rs 400 Crore | 25% |
| If Opted for Section 115BA | 25% |
| If Opted for Section 115BAA | 22% |
| If Opted for Section 115BAB | 15% |
| Any Other domestic company | 30% |
Section 115BA of the Income-Tax Act is applicable on domestic manufacturing companies that were establishment and registered on or after March 1, 2016. Once a company opts to pay tax under Section 115BA, it cannot change the calculation process unless it opts for Section 115BAA for computing the income tax liability.
Section 115BAA offers relief to certain domestic companies wanting to lower their tax burden applicable under Section 115BA. Do note that if a company opts to pay under Section 115BAA, it will have to forgo certain deductions and other benefits as specified under the law.
Section 115BAB offers a lower income tax rate to promote new manufacturing start-ups. A company can opt to pay income tax under this section if it satisfies certain conditions. Some of these conditions are:
A) The Company was set up to registered on or after October 1, 2019, and has started manufacturing or production on or before March 31, 2024
B) plant and machinery used for manufacturing was not previously used; it must be new
surcharge applicable on companies
| Condition | Surcharge rate |
| If net taxable income exceeds Rs 1 Crore but does not exceed Rs 10 crore | 7% |
| if net taxable Income exceeds Rs 10 crore | 12% |
| if Company Opts for taxability under section 115BAA or Section 115BAB | 10% |
Presumptive Income Tax Scheme
It is important for proprietorship business or professional to remember that they have to maintain meticulous books of accounts. Under the income tax act, a business (sole proprietorship, partnership firms, company) or a professionals is required to maintain a profit and loss loss statement, balance sheet and other books as applicable.
However, if a taxpayer does not want to maintain the books of accounts, the act provides an alternative way of taxation. But this is only for certain proprietorship business or professionals which emit a specified conditions.
The income tax act provides an option to professionals, sole proprietors and partnership firms and option of presumptive scheme under section 44AD or 44ADA, as applicable, for the purpose of calculation of income tax.
44AD is available for sole proprietorship business whereas section 44 ADA is available to professionals such as doctors and lawyers.
if an eligible taxpayer opts for the presumptive income tax scheme, then they are liable to declare income as 8% 6% in case of digital transactions of gross turnover under 40 4AD or 50% of total sales as income under 44ADA. The income tax rate under the presumptive income scheme is charged at the normal slab rate mentioned above in the table above for sole proprietorship business and professional. Once a taxpayer has opted for presumptive scheme taxation, they will have to follow the scheme for five years. In other words they can’t switch between presumptive taxation in normal income tax slab every financial year.