The new Section 115BAA and 115BAB has been inserted in the Income tax Act vide Taxation Laws (Amendment) Ordinance, 2019 to give the benefit of a lower corporate tax rate for all the domestic companies. They have the option to pay tax at a rate of 22% and 15% respectively from the FY 2019-20 onward. Also Read-Corporate tax rates slashed to 22% and 15% for domestic companies
| Concessional tax rates for Domestic Companies for the FY 2019-20 | ||
| Concessional rate of tax for domestic company, if total turnover or gross receipt in the previous year. | First Schedule of Finance Act, 2018 | |
| 2014-15 does not exceed Rs. 5 Crores | FY 2016-17 | Rate of income tax shall be 25% of total income. |
| 2015-16 does not exceed Rs. 50 Crores | FY 2017-18 | |
| 2016-17 does not exceed Rs. 250 Crores. | FY 2018-19 | |
| 2017-18 does not exceed Rs. 400 Crores | FY 2019-20 | |
| Concessional rate of tax for domestic company if –
(i) Such company has been set-up and registered on or after March 1, 2016; and (ii) It is engaged in business of manufacturing or production of any article or thing (Subject to certain other conditions)
|
115BA | Income shall, at the option of such company, be computed at concessional tax rate of 25%. |
| Concessional rate of tax for All Domestic company –
(i) It is applicable to all manufacturing and service companies. (Subject to certain other conditions*) |
115BAA | Income shall, at the option of such company, be computed at concessional tax rate of 22%. ** |
| Concessional rate of tax for domestic company if –
(i) Such company has been set-up and registered on or after October 1, 2019; and (ii) It is engaged in business of manufacturing or production of any article or thing (Subject to certain other conditions*) |
115BAB | Income shall, at the option of such company, be computed at concessional tax rate of 15%. ** |
*Without claiming specified deductions (Sec.80H – 80TT), incentives (sec.32AC, 32AD), exemptions (Sec-10A, 10AA), additional depreciation u/s.32(1)(iia) and un-absorbed losses, set-off of carried forward losses if any.
**Once the company opts for section 115BAA & 115BAB in a particular financial year, it cannot be withdrawn subsequently.
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