A. Concessional rate of tax @25% for certain companion:
In case of domestic company, where total turnover or the gross receipt in FY 2017-18 does not exceed Rs. 400 crore, rate of tax applicable for AY 2020-21 shall be 25% of the total Income. For AY 2021-22, concessional rate of 25% will apply, if gross receipt or turnover does not exceed Rs. 400 crore in the FY 2018-19. Surcharge and cess are payable separately as applicable.
B. Special tax rate of 25% on income of Income of certain manufacturing domestic companies u/s 115BA of IT Act, 1961:
(i) The Income-tax is payable @25% In respect of the total Income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after 01.04.2017 at the option of such person. Surcharge and cess are payable separately as applicable.
(ii) The company should be set up and registered on or after the 1″ day of March, 2016.
(iii) The company is engaged in business of manufacture or production of any article or thing and research in relation to the same.
(iv) The total Income of the company Is to be computed as prescribed In the section without any specified deductions and set off of loss carried forward for any earlier assessment year. Depreciation is determined in the manner as prescribed.
(v) The loss referred to above shall be deemed to have been already given full effect to and no further deduction shall be allowed for any subsequent year.
(vi) The option Is to be exercised In the prescribed manner on or before the due date specified u/s 139(1) for furnishing 1′ of the returns of income required to be furnished.
(vii) Once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.
(viii)Where the person exercises option u/s 115BAA, the option under this section has to be withdrawn.
C. Special tax rate of 22% on income of certain domestic companies u/s 115BAA of IT Act, 1961.
(i) The income-tax is payable @22% in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after 01.04.2020 at the option of such person. Surcharge and cess are payable separately as applicable.
(ii) The option is to be exercised in the prescribed manner on or before the due date specified u/s 139(1) for furnishing the returns of income of any previous year relevant to assessment year commencing on or after 01.04.2020 and such option once exercised will be applied to subsequent assessment year. Such companies are exempt from MAT u/s 115JB.
(iii) Sub-Points (iv), (v) and (vii) of point (B) are also applicable here.
D. Special tax rate of 15% on income of new manufacturing domestic companies u/s 115BAB of IT Act, 1961:
(i) The income-tax is payable @15% in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after 01.04.2020 at the option of such person. Surcharge and cess are payable separately as applicable.
(ii) The company should be set up and registered on or after the 1st day of October, 2019 and has commenced manufacturing or production of any article or thing on or all before the 31″ Day of March, 2023 and does not use any machinery or plant previously used for any purpose.
(iii) The company does not use any building previously used as a hotel or convention centre, in respect of which deduction u/s 80-ID has been claimed or allowed.
(iv) The company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to or distribution of such article or thing.
(v) Sub-Points (iv), (v) and (vii) of point (B) and (ii) of point (C) are also applicable here.
E. Presumptive Taxation Scheme ids 44AD of Income-tax Act, 1961 for an eligible business:
(i) In case of eligible assessee engaged in an eligible business, the profits and gains from such business shall be deemed to be 8% of total turnover or gross receipts (6% in case of turnover or gross receipts realized through banking channels or use of ECS or through such other electronic mode as may prescribed).
(ii) Applicable in respect of eligible assessee which means –
a) An individual, HUF or a partnership firm who is a resident but not a LLP firm and
b) who has not claimed deduction under any of the sections 10A, 10AA, 10B, 10BA or deduction under any provisions of Chapter VIA under the heading “C. — Deductions in respect of certain incomes’ in the relevant A.Y.
(iii) Eligible business means —
a) any business except the business of plying, hiring or leasing goods carriages referred to in section 44AE; and
b) whose total turnover or gross receipts in the previous year does not exceed an amount of Rs. 2 crore.
(iv) All deductions u/s 30 to 38 of Income-tax Act, 1961 including depreciation will be deemed to have been already allowed and no further deduction will be allowed under these sections.
(v) The provision of this section do not apply to a person carrying on any profession as referred to u/s 44AA(1) of Income-tax Act, 1961 a person earning income in nature of commission or brokerage or a person carrying on agency business.
(vi) Where an eligible assessee declares profit for any previous year under this section and he declares profit for any of the five Assessment Years relevant to the previous year succeeding such previous year not in accordance with this section, he shall not be eligible to claim benefits of the provision of this section for five assessment years subsequent to the assessment year in which the profit has not been declared In accordance with section 44AD.
(vii) Such assessee whose total income exceed the maximum amount which is not chargeable to Income Tax shall be required to maintain books of account and get their books audited and furnish a report of such audit u/s 44AA and 4.4AB respectively.
F. Presumptive Taxation Scheme u/s 44ADA of income-tax Act, 1961 for professionals:
(i) This scheme applies to any assessee resident to India who is engaged in profession referred to u/s 44AA of Income Tax Act, 1961 and whose total gross receipts do not exceed Rs. 50 lakh in a previous year, then 50% of the gross receipt on account of such profession or a sum higher than the aforesaid sum claimed to have been earned by the assesses shall be deemed to be the profits and gains of such profession chargeable to tax.
(ii) An assesses who claims lower profits and gains that calculated above, and whose profits and gains exceed the maximum amount which is not chargeable to income-tax shall be required to keep and maintain books of account u/s 44AA and will also have to get the accounts audited and furnish a report of such audit u/s 44AB of Income-tax Act, 1961.
(iii) Sub-Points (iv) of point (E) is also applicable here.
G. Presumptive Taxation Scheme u/s 44AE of income-tax Act, 1961 for computing profits and gains of business of plying, hiring or leasing goods carriages:
(i) It is applicable to assesses who own not more than ten goods carriages at any time during the Previous Year.
(ii) The profits and gains from each heavy goods vehicles (HGV) owned by the assessee shall be an amount equal to Rs. 1,000/- per ton gross vehicle weight or unladen weight, as the case may be, for every month or part of a month during which the HGV is owned by the assessee.
(iii) In case of good carriages other than HGV, the profits and gains from each such goods carriage shall be an amount equal Rs. 7,500/- per month or part of the month during which Its owned by the assesses.
(iv) Such an assessee will neither be required to maintain books of account u/s 44AA of Income-tax Act, nor required to get accounts audited u/s 44AB of Income-tax Act.
(v) Sub-Points (iv) of point (E) and sub-point (ii) of point (F) are also applicable here.
H. Maintenance of accounts by certain persons carrying on profession or business u/s 44AA:
(i) Every person carrying on legal, medical, engineering or architectural profession or the profession of accountancy or technical consultancy or interior decoration or any other profession as is notified by the Board in the official Gazette shall keep and maintain such books of account and other documents as may enable the (Assessing) Officer to compute his total income in accordance with the provisions of this Act.
(ii) Every person carrying on business or profession other than that mentioned above Is required to maintain books of accounts if his income from business or profession exceed Rs. 1,20,000/- or total sales or turnover exceeds Rs. 10 lakhs in anyone of the three years immediately preceding the previous year. Where the business or profession is newly setup, the assessee is required to maintain books of accounts if these limits are exceeded during such previous year.
I. Audit of accounts of certain persons carrying on business or profession u/s 44AB of Income-tax Act,1961:
(i) Every person carrying on business shall, if his total sales, turnover or gross receipts In business exceeds Rs. 1 crore In any previous year or carrying on profession, if his gross receipts in profession exceeds Rs. 50 lakh in any previous year, get his account audited of such previous year by an accountant before the specified date and furnish the same in prescribed manner.
(ii) In case of a person carrying on business, if the aggregate of all amounts received including amount received for sales, turnover or gross receipts during the previous year, in cash, does not exceed five percent of the said amount or the aggregate of all payments made including amount incurred for expenditure, in cash, during the previous year does not exceed five percent of the said payment, the audit of account would be required when the total sales or turnover exceeds Rs. 5 crore (w.e.f 1.04.2020).