Successfully reported this slideshow.
Your SlideShare is downloading. ×

S&A Knowledge Series - Reduced rate of tax under income tax

Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Ad
Upcoming SlideShare
Minimum Alternative Tax
Minimum Alternative Tax
Loading in …3
×

Check these out next

1 of 3 Ad

S&A Knowledge Series - Reduced rate of tax under income tax

Download to read offline

With the recent changes in the taxation rates of Companies, we are attaching a tabular presentation of the same for easier reading and understanding.

This would enable you to decipher which option might be more beneficial for you to lower your tax outgo. Please note these clauses only applies to Companies and not to other forms of businesses.

With the recent changes in the taxation rates of Companies, we are attaching a tabular presentation of the same for easier reading and understanding.

This would enable you to decipher which option might be more beneficial for you to lower your tax outgo. Please note these clauses only applies to Companies and not to other forms of businesses.

Advertisement
Advertisement

More Related Content

Slideshows for you (20)

Similar to S&A Knowledge Series - Reduced rate of tax under income tax (20)

Advertisement

More from Dhruv Seth (20)

Recently uploaded (20)

Advertisement

S&A Knowledge Series - Reduced rate of tax under income tax

  1. 1. Page | 1 ` Analysis of Sec 115BAA and 115BAB of the Income Tax <<<<<< S&A Knowledge Series Prepared by Ankita Agarwal Assistant Manager (Direct tax) Vetted by Aswani Kumar Partner www.sethspro.com info@sethspro.com New Delhi | Lucknow | Coimbatore
  2. 2. Page | 2 Analysis of Section 115BAA and 115BAB (Added by the Taxation Laws Ordinance, 2019 i.e. A.Y. 2021) Section 115BAA and 115BAB Provides Benefit of Reduced Tax Rate to certain Domestic Company and Domestic Manufacturing Company respectively, subject to other provision of Chapter XII. Following is the tabular difference between both the sections for an easier reading and understanding which option to exercise. Particulars Section 115BAA Section 115BAB Applicable Tax on certain Domestic Companies (need not be manufacturing concerns; can be any business) New Manufacturing Companies to have commenced manufacturing before 01st Oct 2023 Date of Incorporation Irrespective of date on which company registered and setup. On or after 1st October, 2019 Tax Rate 22% plus 10% surcharge and 4% cess = 25.17% 15% plus 10% surcharge and 4% cess = 17.16% Whether any conditions regarding new undertaking not formed by splitting up existing business No, therefore can be by splitting an existing business. Should not be formed by splitting or reconstruction of a business already in existence Whether nonuse of secondhand plant and machinery and building earlier used as hotel or convention centre is No, therefore secondhand machine can be used without violating the condition. Not to use any plant and machinery earlier used for any purpose. However imported second hand machinery is allowed on which deprecation
  3. 3. Page | 3 Particulars Section 115BAA Section 115BAB applicable under the section has not been claimed ever in India. Exemption from MAT u/s 115JB Yes Yes When option for benefits Should be exercised On or before the due date of furnishing the return for any previous year relevant to the assessment year commencing after 01/04/20 On or before the due date of furnishing the first return of income which the assessee is required to furnish under the provision of the Act. What happens to existing unutilised MAT credit Unutilised MAT credit lapses if company opts for section 115BAA (As clarified by CBDT’s Circular) Not Applicable since MAT was never payable under the section. Can the option once exercised be changed in the subsequent year? No. Once availed it remains the same always. No. Once availed it remains the same always. Other relevant points: 1. Company should not claim benefit of deduction under section 10AA, Sec. 32(1)(iia), sec. 32AD, Sec. 33AB, Sec. 33ABA, Sec. 35(1)(ii), Sec. 35(1)(iia). Sec. 35(1)(iii), Sec. 35(2AA), Sec. 35(2AB), Sec. 35AD, Sec 35CCC,Sec. 35CCD. Company should not claim the benefit of provisions of chapter VI-A except the provision of Sec. 80JJAA. 2. Company cannot set off any loss carried forward from any earlier AY if such loss is attributed to any deduction referred above. 3. Surcharge is applicable @10% irrespective of total income. Seth & Associates was established in 1975 and since then it has been providing unparalleled value addition to its client. We are a firm with diverse and rich exposure in various fields. All our partners are full time active working partners looking into specific sector domains such as Corporate Law, Direct Tax, Indirect Taxes, Raising Capital (Bank and Equity), Business Advisory solutions, Forensic and Information Technology audit and many other core sectors relevant to overall growth of the clients. The information herein contained is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endevour to provide accurate and timely information, there can be no gurantee that such information is very accurate and considers the latest amendment in laws which are very frequent. The above is purely for academic reading and general awareness of the law. No one should act on this information without appropriate professional guidance which requires a thorough exemation of a particular situation. This content is owned by Seth & Associates, Chartered Accountants and is not be reproduced without our explicit permission. www.sethspro.com | info@sethspro.com New Delhi | Lucknow | Coimbatore

×