Recently the Ministry of Corporate Finance along with a discussion with the government, made some of the latest tax rate amendments in the company of a domestic nature. The updated corporate tax rates were introduced in the Income Tax Act 1961.
Latest Update
03rd January 2023
- Businesses newly incorporated and commencing manufacturing before 31 March 2024 are eligible for 15% concessional taxation under section 115BAB of the Income Tax Act 1961. View More
Applicable tax rates for specific domestic companies (Section 115BAA) & (Section 115BAB) for particular new manufacturing companies
Some amendments to the corporate tax rates in the Income Tax Act 1961:
- The previous domestic companies are given a choice for the payment at a discounted rate of 22%.
- The building of new domestic companies on or post 1/10/2019 and starting manufacturing before 31/03/2024 which have the choice to deliver tax with a 15% rate.
- Although the latest rates for the taxes will not permit the companies for particular deductions or incentives.
- MAT would not fit in both of these options
- No newer tax rates have been chosen by the companies on which they take advantage of particular deductions & incentives and inside that, the MAT rate will also be reduced from 18.5% to 15%.
In Tabular form Section 115BA, 115BAA,115 BAB & Others
| Particulars | Section 115BA | Section 115BAA | Section 115BAB | Others |
|---|---|---|---|---|
| Applicable from | A.Y. 2017-18 | A.Y. 2020-21 | A.Y. 2020-21 | – |
| Type of Company | The domestic company engaged in manufacturing/ production | All Domestic companies | The domestic company engaged in manufacturing/ production | Any Domestic Company |
| Start Date | Set up & registered on or after 01.03.2016 | No specific requirement | Set up & registered on or after 01.10.2019 and commence manufacturing on or before 31.03.2024 | – |
| Allowability of specified deduction or loss | No | No | No | Yes |
| Basic Tax Rate | 25% | 22% | 15% | 25%/30% |
| Surcharge | 7%/12% | 10% | 10% | 7%/12% |
| Cess | 4% | 4% | 4% | 4% |
| Applicability of MAT | Yes (15%) | NA | NA | Yes (15%) |
| Specified domestic transaction provisions | NA | NA | Applicable | Applicable |
| Restriction for entities formed by restructuring /use of plant & machinery/use of building earlier use as hotel or convention centre | NO | NO | Yes | – |
