Forms To Be Filed By Companies to Avail Lower Rate of Income Tax

• February 17, 2020
• CA Chandan Agarwal's Office

FORMS TO BE FILED BY COMPANIES TO AVAIL LOWER RATE OF INCOME TAX

The Central Board of Direct Taxes (CBDT) has notified Forms 10-IC and 10-ID vide Notification No. 10/2020 dated 12-02-2020 for existing companies that want to avail lower Income tax rate and new manufacturing firms incorporated after October 1, 2019, respectively.

The effective tax rate for existing units, after considering surcharges and cess will be 25.17 per cent as compared to 34.94 per cent previously. For new units incorporated after October 1, 2019, it will be 17.01 per cent as against 29.12 per cent previously. However, with opting to lower rate of taxation, companies have to forego certain deductions and exemptions. One of the conditions is that such a company cannot claim any deduction under Chapter VI-A of the Income Tax Act, 1961 except deduction under section 80JJA and section 80M (incorporated by Finance Bill 2020).

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