Section 115BA: Tax at the rate of 25 % on income of certain domestic companies

As per new section 115BA has been inserted with effect from assessment year 2017-18 that the domestic companies satisfy following conditions will eligible for tax rate of 25 per cent.

Conditions :

Equalisation Levy extends to the whole India except Jammu and Kashmir. It shall come into force w.e.f 01st June, 2016.

  • The Assessee is a domestic company.

  • The company has been set-up and registered on or after 01.03.2016

  • The company is engaged in the business of manufacture or production of any article or thing and is not engaged in any other business

  • The company while computing its total income has not claimed any benefit under section 10AA, benefit of accelerated depreciation, benefit of additional depreciation, investment allowance, expenditure on scientific research and any deduction in respect of certain income under Section 80H to 80TT other than the provisions of section 80JJAA (Deduction in respect of employment of new employees).

  • Total income of the company is calculated without adjusting brought forward loss from any earlier year (if such loss pertains to any deduction under the aforesaid sections). Moreover, such loss will not be carried forward.

Option in the Hands of Assessee :

If the above conditions are satisfied,

  • The company has an option to pay tax at the rate of Twenty-Five per cent(+SC+EC+SHEC).

  • This Option shall be exercised on or before the due date for furnishing the returns of income, which the company is required to furnish under the Act.

  • Once the company has exercised the option for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.

CBDT notifies Form 10-IB for start-ups to opt for lower tax rate

Disclaimer:"The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation."

Prepared By

Lakshman K

Reviewed By

Phalgun Iyengar

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Ankit C Shetty