Tax Rate of New Company

[KrishnaKumar A]

Hi Experts,

One of my client is a new company, incorporated in FY 2018-19. It's turnover is less than 5 crore during the FY. The company was not in existence during the FY 2016-17 and turnover criteria of 250 Crore may not be applicable here. Its a service sector company and section 115BA is not applicable also. It would be great if anyone can clarify what is the tax rate for this company? 25% or 30%?

Thank you.

[Guest]

Hello Dear

Since Sec 115BA is not applicable to your client, tax rate for your client is 30%.

[CASusheel Gupta]

Section 115BA is special section.

Tax rate for all companies, except covered under section 115BA, having turnover less than 250 crore is 25%.

Refer to Section 2 of Finance Act (No. 2) 2019 for tax rate.

CA Susheel Gupta

AI Summary

Reduced corporate tax rate for eligible companies with lower turnover depends on applicability of the concessional corporate tax option and Finance Act provisions. For a newly incorporated domestic company whose concessional corporate tax option is not applicable, one view asserted the general higher statutory rate applies; an alternative view cited the Finance Act rate provision that domestic companies not covered by the concessional option but meeting the turnover threshold are subject to the reduced corporate tax rate.