Section -115BA of Income Tax Act, 1961 | New Tax Rate for Domestic Companies | Taxaddicters

 Howdy TaxAddicters,

       Nowadays everything will be changed day by day by making improvements to the previous versions. Like that CBDT also introduced some amendments to the Section 115BA, 115BBA, 115BAB, and 115 BAC.

Want to know about them briefly!!!

We have already discussed Section 115BAC in the previous article, you can read it by clicking here. 

Then in this article let us discuss briefly section 115BA, in an epic manner of conversation between Krishna and Arjuna(Fictional Characters).

Section 115 BA: 25%  in Case of Certain Domestic Manufacturing Companies

Arjuna(Fictional Character): Krishna, Is this section available for all types of Assessees?

Krishna(Fictional Character): No Arjuna, This section is available only to Domestic manufacturing Companies and those that too which are set up and registered on or after 1st March 2016.

Arjuna(Fictional Character): Krishna, Whether all income comes under this section, and at what rate the income will be taxed under Section 115BA?

Krishna(Fictional Character): Arjuna,

• Income that is covered under Chapter XII other than Section 115BAA and Section 115BAB are covered under this Section and that Income shall be taxable @ 25%. 
• (i.e Special Income u/s 111A, 112,112A, etc shall be taxable at special rates only.)

Arjuna(Fictional Character): Krishna, Is Surcharge and Cess will be leviable for that?

 Krishna(Fictional Character): Yes Arjuna, Surcharge shall be @7% or 12%  depending on the total income of the Company, and Cess @4% (Health & Education Cess) will be levied always.

Arjuna(Fictional Character): Krishna, by opting for this Section 115BA, MAT is applicable or not?

Krishna(Fictional Character): Arjuna, Even though opting for this Section, Company is required to pay tax as per MAT, and Company can carry forward and utilize MAT Credit as per Section 115JAA.

Arjuna(Fictional Character): Krishna, Are there any Conditions for opting for Section 115BA?

Krishna(Fictional Character): Yes Arjuna, there are some conditions, They are:

• The company has been set up & registered on or after 01-03-2016
• The Company is engaged in the business of manufacturing or production of any article or things.
• The Company should not claim the benefit of:

1. Section 10AA
2. Section 32(1)(iia), 32AD,
3. Section 33AB, 33ABA,
4. Section 35(1)(ii),(iia),(iii), 35(2AA), 35(2AB),
5. Section 35AD, 35CCC, 35CCD,
6. Any deduction in respect of Certain Income under Chapter VI-A (except section 80JJAA).

Arjuna(Fictional Character): Krishna, Whether the Section 115BA mandatory or Optional for Assessees?

Krishna(Fictional Character): Arjuna,

• As per the Income Tax Act, this Section 115BA is Optional.
• This option has to be exercised up to the due date of return of Income under Section 139(1).
• Once the option is exercised it can't be withdrawn for the same or any other previous year.
• However, Company that has opted for Section 115BAA, that case option under this section may be withdrawn. 

With this, see you in the next post !!!

#Fictional Character Credits: CA Umesh Sharma

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