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**Once the company opts for section 115BAA & 115BAB in a particular financial year, it cannot be withdrawn subsequently.

Author Bio

Qualification: Post Graduate
Company: N/A
Location: Erode, Tamil Nadu, IN
Member Since: 19 Dec 2019 | Total Posts: 1
I am basically from Coimbatore, Tamilnadu, completed B.Com., in April 1987, joined as Article Assistant with M/s.Chokshi and Co, Fort, Mumbai based Chartered Accountants and completed CA-Inter. Worked in various establishments in trading, manufacturing, automobiles, diamonds, exports imports from No View Full Profile

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