Beneficial Tax Rate for Domestic Companies

1. Section 115BAA has been inserted in the Income Tax Act,1961 to give the benefit of a reduced corporate tax rate for all domestic companies. Section 115BAA states that domestic companies have the option to pay tax at a rate of 22% plus a surcharge of 10% and cess of 4%.

2. The company shall not claim deductions U/S 10A, 33AB, 35AD, 35CCC, 35CCD, Chapter VIA except for 80JJAA, additional depreciation, set off of losses in respect of above.

3. The beneficial tax rate shall be opted for by the due date of filing returns.

4. Such companies shall not be required to pay MAT.

5. Set off of brought forward depreciation and MAT credit shall not be allowed.

6. The option should be in Form 10-IC, as notified by the CBDT. The form should be submitted online under a digital signature or EVC.

Recent Post:-

Big relief for Income Taxpayers- FY 2018-19!

On 30 September, the Central Board of Direct Taxes (CBDT) extended the deadline for late filing and updated ITRs for the assessment year 2019-20 from 30 September 2020 to 30 November 2020 due to difficulties faced by citizens following the COVID-19 pandemic.

On further account of the actual challenges encountered by taxpayers as a result of the Covid-19 crisis, CBDT further extends the deadline for the furnishing of belated and revised ITRs for the assessment Year 2019-20 from 30 September 2020 to 30 November 2020.Order u / s 119(2a) issued

On 29 July, the CBDT extended the date from 31 July 2020 to 30 September 2020 for the filing of income tax returns for fiscal 2018-19 and revised ITRs.

Recent Post:-

CBDT sets March 31 deadline to complete Panama, Paradise Papers probe

CBDT is trying to complete this investigation early so that other investigative agencies can speed up their investigation. The Central Board of Direct Taxes (CBDT) is currently investigating on these cases in the Foreign Exchange Management Act, as soon as the tax department begins filing criminal cases CBDT will have the basis to convert these cases into the Money Laundering Act.

CBDT after completing the investigation may file prosecution charges against these entities,  to help other agencies to take action against those entities.

About 426 Indian companies with offshore accounts were under income tax department scrutiny in 2016. Over Rs, 1,000 crores of hidden income had been discovered by the department in Panama Papers alone, listing many famous personalities including KP Singh from DLF, Amitabh Bachhan, Aishwarya Rai, Sameer Gehlaut.

  • Around  714 companies and individuals had been identified in the case of Paradise Papers that came to light in 2017
  • Former state minister of Jharkhand Jayant Sinha is also named in this case who is a  member of the Hazaribagh parliament in Jharkhand state.

Appleby, A Bermuda-based legal services provider and Asiaciti based in Singapore, disclosed much of the data on   Paradise Papers which facilitated the establishment of low or zero tax rates on offshore firms.

Currently, CBDT is investigating these cases within the context of the Foreign Exchange Management Act. Once the tax department begins filing prosecution cases we have the basis to transform our case under the Money Laundering Prevention Act.

These cases are currently being investigated by the income tax department under the 2015 Black Money Act. Under this Act, if any person who is unable to justify the source of the funds in question will be required to pay a penalty of nearly 300 percent of the applicable tax liability on it.

These cases are not subject to domestic inquiry; the department is entirely dependent on foreign agencies for information. For the investigator as well as for the agency, therefore, setting a deadline for completing the investigation is not desirable.

Panama and the Paradise Papers mentioned only company names. Finding data from foreign agencies requires proper information that is not available to the department, thus slowing the investigation. Sometimes the department’s own machinery strikes down the request because the department has set unfulfilled SOPs.

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