Key points of Section 115BAB of the Income Tax Act, 1961

 
1.     This section is applicable to domestic companies
 
2.     This section is applicable from the AY 2020-21
 
3.     Effective Tax rate under this section is 17.16% (Tax 15% plus, Surcharge 10%, and Cess 4%)
 
4.     The company should be incorporated and registered in India on or after 1st October 2019
 
5.     The company should commenced manufacturing or production of an article of thing on or before 31st March 2024
 
6.     The company should not be formed by virtue of splitting up, reconstruction
 
7.   It should not use Plant & Machinery previously used for any purpose, however the company can use old plant and machinery, the value of which does not exceed 20% of the total value of the plant and machinery used by the company
 
8.     It should not use Building previously used for hotel or convention centre
 
9.     It should not engaged in any business other than the business of manufacturing or production of an article of thing
 
10.  Deprecation can be claimed
 
11.  Company opting section 115BAB should exercise this option at the time of filing it first return and should file Form 10ID with the department online.
 
12.  Once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.
 
13.   Provisions of MAT under section 115JB shall not be applied on companies opting for new regime.
 
Vijay Shankar Vyas
+91 9748365000
vijayvyas.kol@gmail.com

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