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)
|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|
|2||Other domestic companies ( in existence on or before 30-Sep- 2019)|
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