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 | |
|
25.17% | 31.20% | 15.6% | |
|
25.17% | 33.38% | 16.69% | |
|
25.17% | 34.94% | 17.17% | |
| 2 | Other domestic companies ( in existence on or before 30-Sep- 2019) | |||
|
25.17% | 26% | 15.6% | |
|
25.17% | 27.82% | 16.69% | |
|
25.17% | 29.12% | 17.47% | |
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