Tax on Domestic Companies under section 115BAA - Income Tax - Ready Reckoner - Income Tax

Section 115BAA : 22% rate of tax on certain Domestic Companies [ read with Rule 21AE ] Conditions: - All Domestic Companies can pay income tax with a 22% tax rate (with applicable cess and surcharge). Company should not claim benefit of other deductions under IT Act :- Section 10AA : Deductions from the Special Economic Zones (SEZ) unit. Section 32(1)(iia) : Additional Depreciation Section 32AD : Expenditure that is allocated on machinery and new plants manufactured in the notified backward areas in the states of Bihar, West Bengal, Telangana and Andhra Pradesh. Section 33AB : Deduction given on rubber manufacturing, tea and coffee. Section 33ABA : Deposits made to the site restoration fund by the companies producing or extracting petroleum and natural gas in India. Section 35(1)(ii) , (iia) , (iii) , 35(2AA) , 35(2AB) Scientific Research Section 35AD : Capital spent by any particular business. Section 35CCC : Investment in agriculture extension projects. Section 35CCD : Investment in projects concerning skill development. Any deduction in respect of certain income under chapter VI-A (except Section 80JJAA , 80LA , 80M ) Company cannot set-off any B/F loss or Unabsorbed depreciation which is attributable to deduction referred above. Such loss or unabsorbed depreciation shall be deemed to have been already given full effect to and no further deduction for such loss shall be allowed for any subsequent year. (If the above conditions are not satisfied in any PY, the exercise of the option will be invalid for that PY and subsequent PYs and normal provisions of the Act shall apply. Option has to be exercise upto the due date of ROI u/s 139 Once the option is exercised it can t be withdrawn for the same or any other PY. As per the rules of CBDT, this option will be present in Form 10-IC . One needs to submit the form online under EVC or a digital signature. Other Income like Income from House Property, Income from Other Sources etc shall be taxable @22%. Special Income shall be taxable as per Special Rates of Tax i.e., U/s 111A , 112 , 112A Surcharge will be applicable @10% irrespective of Total Income. Health Education Cess will be levied @ 4% always. Company opting for tax rate under section 115BAA is not required to pay MAT, Brought Forward MAT credit cannot be setoff against income u/s 115BAA . (If assessee has b/f MAT credit, it should first exhaust the MAT credit and thereafter opt for section 115BAA in subsequent PY.) Important Notifications circulars The Central Board of Direct Taxes received condonation the delay in filing of Form No. 10-IC or Form No. 10-ID as per Rule 21AE or Rule 21AF respectively of the Income-tax Rules, 1962 for Assessment Years 2020-21, 2021-22 and 2022-23. [ Circular no. 17/2024 dated 18.11.2024 ] No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Authority. [ Circular no. 17/2024 dated 18.11.2024 ]