Section 115BAA: Whether to continue or forego MAT/AMT Credit?

• January 3, 2021
• CA Chandan Agarwal's Office

Section 115BAA: Whether to continue or forego MAT/AMT Credit?

Section 115BAA states that domestic companies have the option to pay corporate tax at the reduce rate of 22% from FY 2019-20 onwards. Isn’t it a great benefit for the domestic companies to save around 3% on their tax expenses? But wait this benefit comes with its own costs. Domestic companies can avail this benefit only if they do not avail any exemptions/incentives under different provisions of Income Tax while computing their total income such as-

• Section 10AA(SEZ),
• Section 33AB(Tea, coffee, rubber),
• Section 33ABA(Prospecting or extraction or production of natural gas),
• Section 35(Scientific Research),
• Section 35AD(Specified Business),
• Section 35CCC(Agriculture extension project),
• Section 35CCD(Skill Development Project),
• Additional Depreciation in respect of New plant and machinery or in Notified Backward Areas
• Deduction under Chapter VI-A related to certain incomes except Section 80JJAA,
• Further Claiming of Set-off of any brought forward losses or depreciation attributable to the above restricted provisions will not be allowed.

Let’s discuss this last point with an example:

Read more on: https://taxguru.in/income-tax/section-115baa-continue-forego-mat-amt-credit.html