(15% basic tax plus 10% surcharge) plus 4% cess) subject to fulfillment of specified conditions. firstly the companies are required to pay corporate tax, and then the shareholders pay tax on the dividends. On the other hand, non-residents are liable to tax on dividends @ 20% (plus surcharge and cess) which may further be lowered by Double Tax Avoidance Agreements to 5%-15%. Thus, it is expected that the tax rate for firms and LLPs would be reduced to 25% (plus surcharge and cess). Rationalisation of TDS rates for start-ups, small businessesCertain sections of the Income Tax Act provide a nominal TDS rate.