Tax on income of new manufacturing domestic companies - Section (New) 201 / (Old) 115BAB

Concessional tax rate for new manufacturing companies: option-based regime with strict eligibility, computation and disallowance rules.

Section 201 establishes an option-based concessional tax regime for domestic companies set up on or after 1 October 2019 that commence manufacture or production by the prescribed date; eligible companies must exercise the option in the prescribed manner and once exercised it cannot be withdrawn. The regime prescribes preferential tax rates by income character (manufacturing income, non-manufacturing income, short-term capital gains, and deemed excess profits), applies surcharge and cess, disallows specified deductions, precludes set-off of related carry-forward losses and unabsorbed depreciation, and conditions continuation of the option on ongoing compliance including restrictions on reconstruction, use of second-hand plant and specified buildings.