Shift From 115BAB to 115BAA of Income tax act

[anand vaidyanathan]

Dear Learned members,

1. A Pvt Ltd company opted for 115BAB lower taxation (15% TAX+ S.C + Cess) having accumulated loss. Incorporated on JAN-2021 they have duly filed 10-ID and commenced manufacturing before 31/03/2023.

2. Now due to circumstances they will have to do trading also thereby 115BAB advantage shall be not there in future and they are ready to give up lower tax rate

Now the query is

1. Whether they can opt/ shift for 115BAA (22% TAX+ S.C + Cess) from present 115BAB if they are doing trading in the same company? Is it valid? Are they eligible for 115BAA tax rate when they opt for the same it since it is mentioned that 115BAB is irrevocable.

2. What will be the procedure for opting 115BAA other than filing form 10-IC?

3. Whether the loss accumulated during 115BAB period (normal business loss) shall be carried forward in 115BAA?

5. Whether is it enough to file form 10-IC before 139(1) due date or should we file well before.

Any other relevant compliances wrt this

Kindly request your advice in the above points and thankyou in advance for your clarification.

AI Summary

Tax regime migration: shifting from a concessional manufacturing regime to an alternate corporate tax raises eligibility and compliance questions. Whether a private limited company that elected the concessional manufacturing tax regime and commenced manufacturing can discontinue that election and opt for the alternate corporate tax regime upon adding trading activities; the procedural requirements for making the alternate election beyond filing the prescribed form; whether accumulated business losses incurred under the concessional regime may be carried forward after migration; and the appropriate timing for filing the election form and any other compliance obligations arising from the regime change.