Changes in Tax Rate of Indian Domestic Company


Changes in Tax Rate of Indian Domestic Company

Article contains, Changes in Tax Rate of Indian Domestic Company, a comparison between Section 115BA, 115BAA, 115BAB of Income Tax Act. India Corporate Tax Rate 2020, corporate tax deductions india, corporate tax rate amendment covered.

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COMPARATIVE OF 115BA, 115BAA, 115BAB (As amended by Finance Act, 2020)-

S. No. Basis of Difference 115BA 115BAA 115BAB
1 Assesse which can apply Domestic Company Domestic Company Domestic Company
2 From Assessment Year From AY 2017-18 From AY 2020-21 From AY 2020-21
3 Optional/Mandatory Optional Optional Optional
4 Rate of tax (As given in respective sections) 25% 22% 15%
5 Rate of surcharge (As given in Finance Act, 2020) Nil (Income up to 1 Cr.)
7% (Income above 1 Cr. and but not exceeding 10 Cr.)
12% (Income above 10 Cr.)
10% 10%
6 Conditions 1 (Regarding set up of Company) Set up or registered on or after 1st March, 2016 No such Condition • Set up or registered on or after 1st October, 2019 and has commenced manufacturing on or before 31st March, 2023.

• ** (Business is not formed by splitting up or reconstructions of business already in existence.)

• # (Does not use any machinery or plant previously  used  for any purpose

7 Conditions 2 (Regarding Nature of business) Business of manufacture or production of any article or thing and research in relation to such article or thing No Such Condition ***(Business of manufacture or production of any article or thing and research in relation to such article or thing)

*(Business of manufacture or production of any article or thing shall include the business of generation of electricity)

8 Conditions 3 (Regarding computation of total income) Income shall be computed without-

• Benefit of 10AA, 32(1)(iia), 32AC, 32AD, 33AB,  33ABA, provisions of scientific research

• Deduction under any section of heading C of chapter VI-A except section 80JJAA

Income shall be computed without-

• Deduction under section 10AA, 32(1)(iia), 32AC, 32AD, 33AB, 33ABA, provisions of scientific research

*(Deduction under chapter VI-A except section 80JJAA and 80M.)

• Set off of any loss carried forward or depreciation from earlier years attributable to above deductions

• Set off of any loss or unabsorbed depreciation u/s 72A attributable to above deductions

Income shall be computed without-

•  Benefit of 10AA, 32(1)(iia), 32AC, 32AD, 33AB, 33ABA, provisions of scientific research

*(Deduction under chapter VI-A except section 80JJAA and 80M.)

• Set off of any loss or unabsorbed depreciation u/s 72A attributable to above deductions

9 Fail to comply the conditions Option becomes invalid Option becomes invalid May exercise option u/s 115BAA
10 When to exercise the option? To be exercised before filling   of    return by filling form 10-IB under rule 21AD To be exercised before filling of return To be exercised before filling of the first of the return of income
11 Option to withdraw Once exercised can only be withdrawn for 115BAA Option once exercised, cannot be withdrawn subsequently in same or subsequent Ays Option once exercised, cannot be withdrawn subsequently in same or subsequent Ays
12 Other Provisions -NA- In case of a person having a Unit in the International Financial Services Centre, as referred section 80LA, the conditions contained in point no. 8 shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section. Where it appears to the Assessing Officer that due to close connection between two person the course of business between them is so arranged that the business transacted between them produces to the person paying tax under this section more than the ordinary profits, tax is payable on that part at 30% plus applicable surcharge and cess.

Notes-

• * This provision is after amendment made under finance Act, 2020.

• ** This condition is not applicable to reconstruction, re-establishment or revival u/s 33B

• *** Business of production or manufacturing of an article shall not include following-

a). Development of computer software in any form or in any media;
b). Mining;
c). Conversion of marble blocks or similar items into slabs;
d). Bottling of gas into cylinder;
e). printing of books or production of cinematograph film; or
f). Any other business as may be notified by the Central Government in this behalf.

• # Plant & machinery used outside India shall not be regarded as plant & machinery already used if following conditions are satisfied-

a). If not previously used in India at any time before installation,
b). Imported to India from country outside India,
c). No depreciation has ever been claimed on that machinery under the Act.

Tags: Income Tax


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