Section 115BAA New tax rate for domestic companies & Section 115BAB Corporate tax rate for new manufacturing companies

• April 2, 2020
• CA Chandan Agarwal's Office

Section 115BAA – New tax rate for domestic companies

The Government of India has introduced the Taxation (Amendment) Ordinance 2019 on the 20th of September 2019. Several amendments are made to the Income Tax Act,1961 through this ordinance. Changes such as corporate tax rate cut for domestic companies and as well as for manufacturing companies was announced. Also, the MAT rate has been reduced from the current 18.5% to 15%.

New Section introduced

The new section – Section 115BAA has been inserted in the Income Tax Act,1961 to give the benefit of a reduced corporate tax rate for the domestic companies. Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% from the FY 2019-20 (AY 2020-21) onwards if such domestic companies adhere to certain conditions specified.

Conditions for eligibility criteria

Read more on: https://taxguru.in/income-tax/section-115baa-tax-rate-domestic-companies.html