Section 115BAA:
Section 115BAA of the Income Tax Act pertains to the concessional tax regime for domestic companies. It allows domestic companies the option to pay income tax at a reduced rate of 22% (plus applicable surcharge and cess) if they do not claim certain deductions and exemptions. The reduced rate is applicable for companies opting for this regime from Assessment Year (AY) 2020-21 onwards. The key features of Section 115BAA include:
Reduced Tax Rate: Companies can opt for a concessional tax rate of 22% (plus surcharge and cess) on their total income.
No Deductions: Companies opting for this regime cannot claim various deductions, exemptions, and incentives provided under the Income Tax Act, except for certain specified ones.
Minimum Alternate Tax (MAT): MAT provisions do not apply to companies opting for this regime.
Section 115BAB:
Section 115BAB of the Income Tax Act provides a concessional tax regime for new manufacturing companies. It allows these companies to avail a reduced corporate tax rate of 15% (plus applicable surcharge and cess) on their total income if they commence manufacturing or production on or before March 31, 2023, and meet certain other conditions. The key features of Section 115BAB include:
Reduced Tax Rate: Eligible new manufacturing companies can opt for a concessional tax rate of 15% (plus surcharge and cess) on their total income.
Conditions: Companies must commence manufacturing or production on or before March 31, 2023, and not use any machinery or plant previously used for any purpose.
No Deductions: Similar to Section 115BAA, companies opting for this regime cannot claim various deductions, exemptions, and incentives under the Income Tax Act, except for certain specified ones.
