September 2025

A closely held company (where the public is not substantially interested) is subject to stricter tax provisions to prevent tax avoidance and misuse of corporate structures. Below are the key special provisions under the Income Tax Act, 1961: 1. Deemed Dividend under Section 2(22)(e) Applicability: If a closely held company gives loans/advancesto: A shareholderholding ≥10% voting power or A concern(HUF, firm, AOP, etc.) […]

1. Overview Section 115BBD provided a concessional tax rate of 15% (plus surcharge and cess) on dividends received by Indian companies from specified foreign companies where the Indian company held ≥26% equity shares. Introduced in 2011 to promote foreign investments, this provision was withdrawn effective April 1, 2023 (AY 2023–24) to align tax treatment with domestic dividends. 2. Key Provisions (Before Withdrawal) Applicability: Only

1. Basic Framework Companies are taxed on their total incomecomputed under the Income Tax Act, 1961. Tax rates vary based on: Type of company (domestic/foreign) Turnover/special categories (e.g., manufacturing) Applicable tax regime (normal or concessional) 2. Computation of Total Income Step 1: Calculate Gross Total Income Aggregate income under 5 heads: Profits/gains from business/profession Capital gains

1. Overview Section 115BA provides a concessional tax rate of 22% (plus surcharge & cess) for new domestic manufacturing companies that do not claim specified exemptions/deductions. Introduced to boost the “Make in India” initiative, this provision applies from FY 2019-20 (AY 2020-21) onwards. 2. Eligibility Conditions A company can opt for Section 115BA if it meets all of the following: Type of Company: Domestic company incorporated on or after

Section 115BAA of the Income Tax Act, 1961 provides a concessional tax rate of 22% (plus surcharge & cess) for domestic companies that forgo specified exemptions and deductions. Introduced in 2019, this regime aims to simplify taxation, enhance competitiveness, and attract investment. Below is a detailed breakdown of its key provisions: 1. Applicability & Key Features (A)  Eligible Companies Domestic companies(incorporated in India). Not applicableto

Section 115BAB of the Income Tax Act, 1961 provides a concessional tax rate of 15% (plus surcharge & cess) for new domestic manufacturing companies, subject to strict eligibility conditions. Introduced in 2019, this provision aims to boost India’s manufacturing sector under the “Make in India” initiative. Below is a detailed breakdown: 1. Eligibility Criteria To avail benefits under Section 115BAB, a company must satisfy all of the following:

Section 115JB ensures that companies with substantial book profits but low or no taxable income (due to exemptions/deductions) pay a minimum tax. Below is a detailed breakdown of its key provisions: 1. Objective of MAT Prevents tax avoidanceby “zero-tax companies” that report high profits but pay little/no tax due to exemptions. Ensures equitable taxationby mandating a minimum tax contribution from profitable companies. 2. Applicability of

1. Purpose of Section 115JAA Allows companies to claim creditfor excess MAT paid (when MAT > normal tax) in subsequent years where normal tax liability exceeds MAT. Prevents double taxation and ensures fairness for companies subject to MAT. 2. Eligibility for MAT Credit Applies only if: Company has paid MAT under Section 115JBin any previous year. Normal tax liability(under regular

Section 115JB(2) mandates that the Statement of Profit & Loss (P&L) for MAT computation must be prepared as per Schedule III of the Companies Act, 2013, with specific adjustments. Below is a structured breakdown: 1. Legal Requirement Companies must compute “Book Profit”for MAT (Minimum Alternate Tax) based on: Net Profit(as per P&L prepared under Companies Act, 2013). Adjustments(additions/deductions) as prescribed in Section 115JB(2).

Section 115JB mandates that companies calculate Minimum Alternate Tax (MAT) based on book profits (derived from financial statements) rather than taxable income. Below is a step-by-step guide to computing book profit, including adjustments under Explanation 1 to Section 115JB(1) & (2). 1. Legal Basis Section 115JB(1): Defines MAT liabilityas 15% of book profit (plus surcharge & cess). Explanation 1 to Section 115JB(2): Specifies adjustmentsto net profit for computing