DIRECT TAXES PROFESSIONALS’ ASSOCIATION
(Registered under Societies Registration Act, 1961. Registration No. S/60583 of 1988-89)

Ref. No. DTPA/Rep/20-21/20

Date: 19th April, 2021

To,
Shri P. C. Mody,
Chairman, Central Board of Direct Taxes
Government of India,
North Block,
New Delhi – 110001

Respected Sir,

Sub: Representation with regard to application of old tax rates due to filing form 10IC after submitting ITR but before due date filing ITR as per provisions of section 115BAA

Section 115BAA was inserted in the Income Tax Act,1961 to give benefit of a reduced corporate tax rate for the domestic companies. Section 115BAA states that domestic companies have the option to pay Tax at a rate of 22% plus Surcharge of 10% and Cess of 4%. The Effective Tax rate being 25.17% from the FY 2019-20 (AY 2020-21) and onwards if such domestic companies adhere to certain conditions specified.

As per sub-section 5 of section 115BAA, such companies had to exercise this option of being  taxed under the section 115BAA on or before the due date of filing income tax returns i.e usually 30th September of the assessment year. For the AY 2020-21, the due date was extended to 15th February 2021. Another condition is that the company opts for section 115BAA in a particular financial year, it cannot be withdrawn subsequently. The option should be in Form 10-IC, as notified by the CBDT. The form should be submitted online under a digital signature or under an electronic verification code. Therefore, It is clear from provision of section 115BAA that Form 10-IC has to be filed before due date and not before filing the Return of Income.

In line with the provisions announced, many assessee submitted Form 10-IC after filing the Return but before the due date of filing Return. Now while processing the returns, CPC is charging tax rate @25% + 4% Cess instead of 22%+10% surcharge +4% cess and it appears that they are not considering the filing Form 10-IC after the filing of Returns.

Under this situation most of the Assessees are hit by this delay in submitting Form 10IC, which in fact is not a delay as per the provisions of the section.

May we therefore request you to issue necessary clarification on this issue and even if the spirit be to file form before the ITR , we request you to relax the situation at least for AY 2020-21 so that there is no default on a mass level .

Yours Faithfully,

Thanking you,

Yours faithfully,

CA N K Goyal
President

Adv Narayan Jain
Chairman- Representation Committee

CC to:

1 Mrs. Nirmala Sitharaman,
Hon’ble Finance Minister
,
Ministry of Finance,
Government of India,

2 Shri Anurag Singh Thakur
The Hon’ble Minister of State for Finance

Download Representation with regard to application of old tax rates due to filing form 10IC after submitting ITR but before due date filing ITR as per provisions of section 115BAA

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