TaxTMI 
TaxTMI 
Tax on income of new manufacturing domestic companies - Section (New) 201 / (Old) 115BAB
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....ure of Income Tax Rate Applicability (a) Manufacturing Income 15% Income from manufacturing/production activities (b) Non-Manufacturing Income 22% Income not derived from manufacturing and For which no specific tax rate has been provided separately under Parts A, B, E and this Part of this Chapter; (c) Short-Term Capital Gains 22% STCG from transfer of capital assets on which depreciation is not allowable. (d) Deemed Income 30% income deemed under Section 205(4) (i.e. the amount, being profits in excess of the profits determined by the Assessing Officer). After the calculating the income tax according to above rate specified such income tax has been increased by the Surcharge (i.e. 10 % of Income tax) and Health & Education Cess (i.e. 4 % of Income Tax and Surcharge). Conditions for Availing the Concessional Rate • (a) Exercise of Option - The company must formally exercise the option under sub-section (2). • (b) Date of Incorporation - The company must be set up and registered on or after 1 October 2019. • (c) Commencement of Manufacturing -....
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....y and to promote manufacturing or production of article or thing using new plant and machinery. • Such guidelines required prior approval of the Central Government Following Conditions fulfill for the opt the option under section 201(1) [ Sub Section (2) ] • (a) Prescribed Manner - The option under this section shall be exercised by the assessee in the manner prescribed. • (b) Time Limit to avail the Option - it shall be exercised on or before the due date specified under section 263(1) for furnishing first of the returns of income for any tax year; • (c) Applicability to Subsequent Years - once the option has been exercised for any tax year, it shall not be subsequently withdrawn for the same or any other tax year • (d) Consequences of Non-Compliance - where the assessee fails to fulfil the Conditions require for availing the Concessional Rate in any tax year, then • Option becomes invalid:- the option shall become invalid in respect of such tax year and subsequent tax years; and • Other provisions apply:- the other provisions of the Act apply ....
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....duction for such loss or depreciation, or both, shall be allowed for any subsequent year. Effect of Amalgamation on the Concessional Tax Option [ Sub section (5) ] • In case of an amalgamation, option under this section shall remain valid in case of the amalgamated company only, • if the Conditions require for availing the Concessional Rate are continued to be fulfilled by such company. From 01-04-2020 to 31.03.2026 Section 115BAB: 15% rate of tax on certain Domestic Companies (w.e.f. 01.04.2020) [ Read with Rule 21AF ] Conditions: - • Domestic Companies has been setup & registered on or after 1^st October, 2019. • Such Domestic company commence the manufacturing business on or before 31^st March, [2023 2024 Substituted vide Finance Act, 2022 w.e.f. 01-04-2022] • It should not be formed by splitting up or reconstruction of business already in existence as is referred in section 33B. • Company does not use Second hand Plant & Machinery. However, second hand plant & machinery which brought from outside India can be use. Also, company cannot use old plant & mach....
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.... 80JJAA, 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. Other Conditions • 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-ID. One needs to submit the form online under EVC or a digital signature. Rate of tax • Income of the company has been set-up and registered on or after the 1st day of October, 2019, and has commenced manufacturing or production of an article or thing on or before the 31st day of March, 2024, shall, at the option of such person, be computed at the @15%, if the conditions contained in section 11....