# Income Tax Rates for Firm / LLP / Local Authority

These entities are taxed at a flat rate with no slab benefit.

Particulars	Treatment
Income tax	Flat 30% on total income
Surcharge	12% of income-tax if total income exceeds ₹1 crore
Marginal relief	Available; computed on the same logic as for individuals
Health & Education cess	4% on (tax + surcharge)

There is no basic exemption limit and no slab structure — every rupee of total income is taxed at 30%.

Worked example

### Example 1

Surcharge trigger for a firm: A partnership firm has total income of ₹1,02,00,000. Tax @30% = ₹30,60,000. Since TI > ₹1 crore, surcharge @12% = ₹3,67,200. Marginal relief is then tested so that tax+surcharge on ₹1,02,00,000 does not exceed [tax on ₹1 crore + (TI − ₹1 crore)].

⚠️ Common exam mistakes

Applying slab rates or a basic exemption limit to a firm/LLP — they are taxed at a flat 30%.
Levying 12% surcharge when total income is ₹1 crore or below (the threshold is exceeding ₹1 crore).
Forgetting marginal relief for firms near the ₹1 crore mark.

Reference:

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