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Circular 29/2019 – Clarifications on set off of brought forward loss due to additional depreciation & MAT credit if companies opt for new tax rate of 22% u/s 115BAA

Domestic company which wants to opt for tax @22% for the FY 2019-20 is not eligible to claim:

1. Set off of any brought forward loss due to additional depreciation. However, they can set off of the same subject to old tax @25% or revised 15% (if MAT applicable) on balance income, if any and can exercise option to for new tax @22% in the later year(s).

2. Brought forward MAT credit. However, they can claim the same subject to old tax @25% or 15% (if MAT applicable) on balance income, if any and can exercise option for new tax @22% after utilising the credit.

3. Effective tax rates schedule for FY 2019-20 (AY 2020-21)

SI
No
Particulars ETR if
option
exercised
If option not exercised & wants to set off B/F loss of additional dep or claim MAT credit
ETR Effective MAT rate
1. Turnover > Rs.400 Crore during the FY 2017-18 On balance income On book profit
  • Income < Rs.1 crore
25.17% 31.20% 15.6%
  • Income > Rs.1 crore <  Rs.10 crore
25.17% 33.38% 16.69%
  • Income > Rs. 10 crorc
25.17% 34.94% 17.17%
2 Other domestic companies ( in existence on or before 30-Sep- 2019)
  • Incomes < Rs.1 crore
25.17% 26% 15.6%
  • Income > Rs.1 core <
    Rs.10 crore
25.17% 27.82% 16.69%
  • Income > Rs.10 core
25.17% 29.12% 17.47%

Also Read relevant Press Releases and Notifications

Taxation Laws (Amendment) Ordinance, 2019

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