(A) For Assessment Year 2020-21 and onwards, all Domestic Companies can pay Tax under any of the following two options:
Option -1
(i) Normal Rate of Tax as per newly inserted section 115BAA, 22% — Effective Rate of Tax including Surcharge @ 10% and H&EC @ 4% = 25.168%
(ii) MAT provisions not applicable
Option once exercised cannot be withdrawn
All conditions prescribed under section 115BAA (2) should be satisfied. i.e. deductions and incentives are not to be allowed
Option -2
(i) Where the Total Turnover or Gross Receipts of the previous year 2017-18 does not exceed Rs. 400 Crore.
Effective rate of tax including surcharge as applicable and H&EC 26% if total income does not exceed Rs. 1 Crore, 27.82% if the total income exceeds Rs. 1 Crore or 29.12% if the total income exceeds Rs. 10 Crore.
(ii) In any other case
Effective rate of tax including surcharge as applicable and H&EC 31.2% if total income does not exceed Rs. 1 Crore. 33.38% if the total income exceeds Rs.1 Crore or 34.944% if the total income
exceeds Rs. 10 Crore .
MAT as per the provisions of section 115JB shall be applicable 15% + Surcharge @ 7% or 12%, as the case may be.
All the deductions and incentives which are hitherto available shall be allowed.
(B) A manufacturing Domestic Company Set-Up and Registered on or after 1.10.2019, and has commenced manufacturing or production of an article or a thing on or before the 31.3.2023 can pay tax under any of the following two options:
Option -1
Normal rate of tax as per newly inserted section 115BAB (1) on income on account of manufacturing or production of an article or a thing — 15%
(i) Effective Rate of Tax including Surcharge @ 10% and H&EC @ 4% = 17.16%
(ii) MAT provisions not applicable.
Option once exercised cannot be withdrawn
All conditions prescribed under section 115BAB (2) should be satisfied i.e. deductions and incentives are not to be allowed.
Option -2
Rate of Tax as per existing normal provisions :
(i) Where the total turnover or gross receipts of the previous year 2017-18 does not exceed Rs. 400 Crore –
Effective rate of tax including surcharge as applicable and H&EC 26% if total income does not exceed Rs. 1 Crore, 27.82% if the total income exceeds Rs. 1 Crore or 29.12% if the total income exceeds Rs. 10 Crore.
(ii) In any other case Effective rate of tax including surcharge as applicable and H&EC 31.2% if total income does not exceed Rs. 1 Crore, 33.38% if the total income exceeds Rs. 1 Crore or 34.944% if the total income exceeds Rs. 10 Crore
Note.—MAT as per the provisions of section 115JB shall be applicable @ 15% + Surcharge, @ 7% or 12%, as the case may be.
All the deductions and incentives which are hitherto available shall be allowed.
Option -3
Pay income tax as the provisions of Section 115BAA (see Option 1 of para (A) above)
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