TAX RATES APPLICABLE FOR CERTAIN DOMESTIC COMPANIES (SECTION.115BAA) & FOR CERTAIN NEW MANUFACTURING COMPANIES (SECTION.115BAB)
key changes to corporate tax rates in the income tax act, 1961:
> Existing domestic companies have been provided an option to pay tax at a concessional @22%,
> New domestic companies set up on or after 01.10.2019 and commencing manufacturing before 31.03.2023 would have the option to pay tax @15%.
> However new tax rates will not allow a companies for specified deductions or incentives.
> MAT would not be applicable in either of these options
> Companies that do not opt for the new tax rates can enjoy the benefits of specified deductions & incentives and in that case MAT rate has also reduced from 18.5% to 15%
|PARTICULARS||SECTION115BA||SECTION 115BAA||SECTION 115BAB||OTHERS|
|Applicable from||A.Y. 2017-18||A.Y. 2020-21||A.Y. 2020-21||–|
|Type of Company||Domestic company enga-ged in man-ufacturing/ production||All Domestic companies||Domestic company engaged in manu-facturing/ production||Any Domestic company|
|Start Date||Set up & registered on or after 01.03.2016||No specific requi-rement||Set up & registered on or after 01.10.2019 and com-mence manu-facturing on or before 31.03.2023||–|
|Allowability of specified deduction or loss||No||No||No||Yes|
|Basic Tax Rate||25%||22%||15%||25%/30%|
|Applicability of MAT||Yes (15%)||NA||NA||Yes (15%)|
|Specified domestic transaction provisions||NA||NA||Applicable||Applicable|
|Restriction for entities formed by restructuring /use of plant & machinery/use of building earlier use as hotel or convention center||NO||NO||Yes||–|