1. 15% Tax rate in case of certain domestic manufacturing Company.
2. Surcharge of 10% is applicable irrespective of the amount of total income.
3. Effective Tax Rate is 17.16%(15%+10%+4%).
4. Company is not Required to Pay MAT
5. Tax on Special rate of Income is Taxable as per their applicable tax Rate (like 112A ) Plus Mandatory surcharge of 10% & HEC 4%.
6. Company Can not claim benefit of deduction under:-
- u/s 10AA- Deduction to newly established Units in Special Economic Zones
- u/s 32(1)(iia)-Additional depreciation @20% on P & M
- u/s 32AD-Deduction related to Investment in new plant or machinery in notified backward areas in certain States
- u/s 33AB-Deposit in Tea development account, coffee development account and rubber development account
- u/s 33ABA- Deposit in Site Restoration Fund (entity engage in extraction or production of, petroleum or natural gas)
- u/s 35(1)(ii)-Deduction in respect of expenditure related to Scientific Research (Payment made to university, college or other institution)
- u/s 35(1)(iia)-Deduction in respect of expenditure related to Scientific Research (Payment made to Company)
- u/s 35(1)(iii)-Deduction in respect amount paid to a research association which has as its object the undertaking of research in social science or statistical research or to a university, college or other institution)
- u/s 35(2AA)-Deduction in respect of amount paid to a National Laboratory or a University or an Indian Institute of Technology or a specified person with specific direction that the said sum shall be used for scientific research undertaken under a programme approved in this behalf by the prescribed authority,
- u/s 35(2AB)-Amount paid by company to company engaged in the business of bio-technology
- u/s 35AD-Deduction in respect of expenditure on specified business.
- u/s 35CCC-Expenditure on agricultural extension project.
- u/s 35CCD-Expenditure on skill development project.
- Under any provision of Chapter VI-A
7. Company Cannot Setoff any loss carried forward from any earlier AY and no further deduction for such loss shall be allowed for any subsequent year
8. Following condition must be satisfied
- the company has been set-up and registered on or after the 01/10/2019, and has commenced manufacturing/ production of an article on or before the 31/03/2023 (last date of commencement has been increased to 31/03/2024 in this finance act).
- It should not be formed by Splitting up, or the reconstruction, of existing business.
- Plant and Machinery should be New.
Exception
* 20% of total Plant & Machinery can be Second Hand
* Import of P & M shall be treated as new P & M
- It Should not use any building previously used as a hotel or a convention center, in respect of which deduction u/s 80-ID has been claimed and allowed.
- He 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 manufactured or produced by it.
9. Manufacturing activity doesn’t Include
- development of computer software in any form or in any media
- Mining
- Conversion of marble blocks or similar items into slabs
- Bottling of gas into cylinder
- Printing of books or production of cinematograph film
* Business of Generation of electricity is treated as manufacturing activity
** Where it appears to the Assessing Officer that, owing to the close connection between the person to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to the person more than the ordinary profits which might be expected to arise in such business, the Assessing Officer shall, in computing the profits and gains of such business for the purposes of this section, take the amount of profits as may be reasonably deemed to have been derived therefrom
Author Bio
u/s 115BAB. Is Machinary Criteria Compl. or Outsourcing is also Covered