Source:
Income tax
Intro:
Section 115BA is first introduced in the Finance Act, of 2016.
Purpose is to reduce corporate-taxes of various domestic companies in India that are dealing with manufacturing process.
After satisfying required conditions.
Conditions to be satisfied:
a. set-up & registered on or after 01/03/2016
b. should engage in business of manufacture or production of
i. any article
ii. thing &
iii.research in relation to / distribution of such article or thing
Computation of total income:
Total income to be computed:
A.
without deduction under:
i. section 10AA - Deductions for Special Economic Zone.
ii. section 32(1)(iia) -
iii section 32AC
iv section 32AD - An Expenditure allotted for manufacturing machinery, and new plants in backward areas like Telangana, West Bengal, and Andhra Pradesh.
v. section 33AB - Deduction allotted on the manufacturing of tea, coffee, and rubber.
vi section 33ABA - Deposits given by the companies to the site restoration fund for the production and extraction of petrol and natural gas in India.
vii section 35CCD - Investment made in any projects of skill development.
viii. section 35CCC - Investment made in any projects of agriculture extension.
ix. section 35AD - Capital allocated by any business.
x. section 35AC
xi. section 35(1)(ii), section 35(iia), section 35(iii), section 35(2AA)/(2AB)
xii. any provisions of chapter VI-A under heading "C" other than provisions of 80JJAA
B.
without "set off" of loss or allowance for unabsorbed depreciation carried forward from any earlier A.Y if such loss is attributable to any of the deductions referred to in sub-clause (i) and
C.
depreciation under "section 32" other than "section 32(1)(iia) (additional depreciation)" is determined as may be prescribed.
d. loss under sub-section(1)(c)(ii) is not allowed as deduction for further years.
Tax rate:
@ 25%
surcharge = 10%/7%
cess = 4%
Further:
a. if option under "section 115BAA" exercised then this section may be withdrawn (not applicable).(with affect from AY 2020-2021)
b. Once exercised under this section can't be withdrawn for the same or any P.Ys
c. Can also be applicable to all those manufacturing companies whose total income does not exceed 400 crores for relevant P.Y.
d. can avail MAT (section 115JB)
FORM 10-IB:
a.Form 10-IB contains option to apply for section 115BA
b.Submit form online with an "EVC(electronic verification code) or digital signature"
c.link:
FORM-10-IB
OPTION CAN BE EXERCISED ONLY BEFORE DUE DATE FOR FILING INCOME TAX RETURN u/s 139(1)
Disclaimer:
The contents of this document are solely for informational purpose. It does not constitute professional advice or formal recommendation. While due care has been taken in preparing this document. The author does not accept any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information nor any other action taken in reliance thereon.
