Indian businesses may choose to pay tax at a concessional rate of 22% plus any applicable surcharge or cess under the Income Tax Act, so long as they don’t take advantage of any of the designated deductions and incentives.
On Monday, the Income Tax department claimed the benefit of a lower corporation tax rate without providing incentives for FY21, but it also excused companies for their tardiness in filing a crucial form. In a social media post, the department stated that, under certain restrictions, businesses might now file form 10-IC by January 31, 2024, after receiving petitions for relief.
As per the Income Tax Act, Indian corporations can choose to pay tax at a reduced rate of 22%, together with any relevant surcharge and cess, if they don’t utilize any certain deductions and incentives. If businesses file form 10-IC within the allotted time frame, they can choose to use this concessional rate starting in FY20. The income tax return for the relevant assessment year must have been filed on or before the due date, according to CBDT, in order for the delay to be excused.
According to experts, this ruling would help businesses that filed tax returns for the assessment year 2021–2022 and selected the 22% tax rate. These businesses were not eligible for the concessional rate since they neglected to include form 10-IC with their tax return.
Such companies now need to e-file form 10-IC for AY 2021-22 before 31 January 2024 in order to get the lower rate of tax of 22%.