LLP Tax Rate in India (2026): Flat 30% + Surcharge & Cess Explained

What is the tax rate for an LLP in India?

An LLP in India is taxed at a flat 30% on its total income, with no basic exemption slab. On top of that, a 12% surcharge applies if total income exceeds ₹1 crore, and a 4% health and education cess is charged on the income tax plus surcharge. The effective rate works out to 31.2% below ₹1 crore of income and about 34.94% above it.

LLP income tax rate — full breakdown

• Base rate: flat 30% of total income — no slabs, no basic exemption
• Surcharge: 12% of the income tax, only where total income exceeds ₹1 crore (subject to marginal relief)
• Health & education cess: 4% of income tax plus surcharge
• Effective rate: 31.2% up to ₹1 crore of income; about 34.944% above ₹1 crore
• Alternate Minimum Tax (AMT): 18.5% of adjusted total income (plus surcharge and cess) if that is higher than the normal tax — relevant mainly where the LLP claims certain deductions

Can an LLP use the 22% concessional tax rate?

No. The 22% rate under Section 115BAA and the 15% new-manufacturing rate under Section 115BAB are available only to domestic companies. An LLP always pays the flat 30%, which is one reason founders expecting high profits sometimes prefer a private limited company.

How partner remuneration affects the LLP’s tax

Remuneration and interest paid to partners — within the Section 40(b) limits and if authorised by the LLP Agreement — are deductible from the LLP’s taxable income. They are then taxed as business income in the partner’s hands, so that portion of profit is taxed once, not twice. The remaining profit share is exempt for partners under Section 10(2A) because it has already been taxed at the LLP level. There is no dividend distribution tax on an LLP.

Section 40(b) limit: on the first ₹6 lakh of book profit (or in case of a loss), the higher of ₹3 lakh or 90% of book profit; on the balance, 60%.

Worked example

An LLP with total income of ₹40 lakh: income tax = 30% × ₹40,00,000 = ₹12,00,000. No surcharge, since income is below ₹1 crore. Cess = 4% × ₹12,00,000 = ₹48,000. Total tax = ₹12,48,000 — an effective rate of 31.2%.

Other taxes an LLP deals with

• Advance tax if the yearly liability is ₹10,000 or more, in four instalments (15 Jun / 15 Sep / 15 Dec / 15 Mar)
• GST once turnover crosses ₹40 lakh for goods or ₹20 lakh for services, or immediately for inter-state supply and e-commerce
• TDS on payments such as rent, contractor bills and professional fees, deposited and filed quarterly

Frequently asked questions

What is the income tax rate for an LLP in India?

A flat 30% of total income, plus a 12% surcharge if income exceeds ₹1 crore, plus 4% cess. The effective rate is 31.2% below ₹1 crore and about 34.94% above it.

Is an LLP taxed like a company or like a partnership?

Like a partnership firm. It pays a flat 30%, partner remuneration and interest are deductible within Section 40(b) limits, and the partners’ profit share is exempt in their hands under Section 10(2A). It does not get individual slab rates or company concessional rates.

What is the surcharge on LLP income tax?

12% of the income tax, applied only when the LLP’s total income exceeds ₹1 crore, with marginal relief so the extra tax does not exceed the income above ₹1 crore.

Does an LLP pay dividend distribution tax?

No. Profit distributed to partners is not taxed again in their hands — it has already been taxed at 30% at the LLP level. Only partner remuneration and interest are taxable for the partners, as business income.

What is the LLP tax rate for AY 2026-27?

Unchanged — a flat 30%, plus 12% surcharge above ₹1 crore of income, plus 4% cess. There has been no change to the headline LLP rate.

Need help with LLP tax filing?

LLPconsultant.com files LLP income tax returns (ITR-5), structures partner remuneration within Section 40(b), and handles tax audit where it applies — alongside LLP registration and annual ROC compliance. See our income tax for LLP service.