Given below are the income tax slabs for sole proprietorship business, professionals, partnership firms and domestic companies registered under Companies Act, 2013. The income tax slabs and rates mentioned below are applicable for the current financial year. Read on to know more about it.
Income tax slabs applicable to incomes earned from running a proprietorship business or via professional services are the same as the slabs applicable to other types of income e.g., salary income but the slabs/rates are different for partnerships and companies.
Abhishek Soni, CEO of Tax2win, an ITR filing website, says, “Income tax on salaried individuals is charged as per the slab rate on the basis of their income. Individuals having businesses as sole proprietorship or working as a professional have the same income tax slabs as salaried individuals. Further, if a sole proprietorship business is run by senior citizens or super senior citizens, then they are eligible for higher tax exemption limit – just like a retired senior or super senior citizen would get. Such taxpayers also have an option to pay tax under the new tax regime (effective from April 1, 2020) for the incomes earned from proprietorship business. However, income tax rates are different for partnership firm or company registered under the Companies Act.”
Given below are the income tax slabs 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 are same as salaried class. However, individuals running proprietorship businesses or offering professional services (such as lawyer, doctor etc.) are eligible for many deductions that salaried individuals are not. Similarly, there are certain deductions that can be claimed only by salaried employees.
© 2018 CA Chandan Agarwal. All rights reserved.