Section 115BAA option exercised in Form No.10IC

[Himatlal Pandit]

One of our company clients having turnover below ₹ 400 cr. , has exercised option u/s.115BAA (22% Income tax rate) for A.Y.2020-21 in form no.10IC. Once option exercised for the particular year can it be withdrawn by the Assessee Company and to get to be assessed under First Schedule to the Finance Act as per old Provision for claiming additional depreciation and MAT Credit u/s.115JAA? Company having turnover below ₹ 400 cr. wants to pay tax under normal provision of the act i.e income tax rate @ 25% or once it exercised option u/s.115BAA then it can not pay tax under normal provisions. Please Explain.

[DR.MARIAPPAN GOVINDARAJAN]

The second proviso to section 115BAA (5) provides that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.

[CASusheel Gupta]

The option once exercised cannot be withdrawn, but the option shall automatically become invalid if you violate any of the condition mentioned in sub section (2).

See if you are able to violate any of them .

CA Susheel Gupta

AI Summary

Option under section 115BAA: once exercised, cannot be withdrawn, except by breach causing automatic invalidation. An election to be taxed under the concessional regime, once exercised in Form No.10IC, is irrevocable and cannot be withdrawn for that or any other previous year; however, the election becomes automatically invalid if the assessee breaches the statutory eligibility conditions, which may affect entitlement to benefits or obligations under the prior provisions.