Corporate Tax Rate Updates for Domestic Companies in India

TAX RATE TAX RATE UPDATES UPDATES - - Corporate Corporate Prepared by pams pams & professional group & professional group Prepared by

NORMAL TAX RATE 25% (IF TUROVER / GROSS RECEIPT < Rs. 400 Cr.) OPTED FOR SEC. 115BA DOMESTIC COMPANY OPTED FOR SEC. 115BAA OPTED FOR SEC. 115BAB INDEX: TAXABLE AT 40% FOREIGN COMPANY SURCHARGE TAXABLE AT 22 % CO-OPERATE SOCIETY SURCHARGE

DOMESTIC COMPANY : Conducts it s affairs in it s Home Country. Limits it s, Vision, Mission & Operations to National political boundaries. INTRODUCTION A domestic business is often taxed differently than a non- domestic business and may be required to pay duties or fees on the products it imports.

Income-tax rates applicable in case of domestic companies for assessment year 2020-21 and 2021-22 are as follows: DOMESTIC COMPANY : Assessment Year 2020-21 Assessment Year 2021-22 Domestic Company Where its total turnover or gross receipt during the previous year 2017-18 does not exceed Rs. 400 crore 25% NA NORMAL TAX Where its total turnover or gross receipt during the previous year 2018-19 does not exceed Rs. 400 crore NA 25% Any other domestic company 30% 30%

TAX RATE 25% FORM 10 - IB DOMESTIC COMPANY : Section 80H to 80TT (Other than 80JJAA) Registered on or After 01/03/2016 any deduction u/s 10AA, Engage in Manufacturing/ Production. SEC. 115BA Not claiming any deduction 32AC, 32AD, 33AB, 33ABA. Not claiming Additional Depreciation 35(1)(ii)/(iia)/(iii)/35(2A A)/(2AB), 35AC, 35AD, 35CCC, 35CCD. Can t claim any B/F Losses https://youtu.be/boUnnh_qXe0

TAX RATE 22% From A.Y. 2020-21 DOMESTIC COMPANY : Section 80H to 80TT (Other than 80JJAA) Not claiming any deduction or B/F Losses. any deduction u/s 10AA, MAT Provisions Not applicable. SEC. 115BAA 32AC, 32AD, 33AB, 33ABA. 35(1)(ii)/(iia)/(iii)/35(2A A)/(2AB), 35AC, 35AD, 35CCC, 35CCD.

TAX RATE 15% From A.Y. 2020-21 DOMESTIC COMPANY : Section 80H to 80TT (Other than 80JJAA) Subject to conditions : any deduction u/s 10AA, SEC. 115BAB Not claiming any deduction or B/F Losses. 32AC, 32AD, 33AB, 33ABA. MAT Provisions Not applicable. 35(1)(ii)/(iia)/(iii)/35(2A A)/(2AB), 35AC, 35AD, 35CCC, 35CCD.

Registered on or After 01/11/2019 Commenced Manufacturing/ Production on or before 31/03/2023. DOMESTIC COMPANY : Not formed by Splitting up or reconstruction of business already in existence SEC. 115BAB Does not use any P&M previously used. Does not use building previously used as a Hotel, convention center. Conditions Company not engaged in any business other than :

Development of computer software; DOMESTIC COMPANY : Mining ; Conversion of marble blocks or similar items into slabs; Bottling of gas into cylinder; SEC. 115BAB Printing of books or production of cinematographic film; Businesses Any other notified by Central Govt.

Opted for Sec. 115BAA/BAB TI > Rs. 1 Cr. TI > Rs. 10 Cr. DOMESTIC COMPANY : 7 % of Income Tax 12 % of Income Tax 10% of Income Tax SURCHARGE EDUCATION CESS : 4% of Income Tax plus surcharge

DOMESTIC COMPANY : Effective Tax Rates Sec. 115BA Sec. 115BAA Sec. 115BAB Same as TURNOVER BASED <Rs. 400Cr. 15 + 1.5 + 0.66 = 17.16 % 22 + 2.2 + 0.968 = 25.168 %

Particulars Turnover based < 400 Crs. S. 115BA S. 115BAA S. 115BAB Effective Tax rate 26/27.82/29.12 26/27.82/29.12 25.168 17.16 DOMESTIC COMPANY : MAT 15 % 15 % NIL NIL Additional Dep. Allowed Not Allowed Not Allowed Not Allowed C/F Losses Allowed Not Allowed Not Allowed Not Allowed Specified Deductions Allowed Not Allowed Not Allowed Not Allowed Nature of Business Any Manufacturing Any Manufacturing COMPARATIVE CHART Year to start Any Year On or after 01/03/2016 Any Year On or after 01/10/2019 & commence mfg. by 31/03/2023 Form NIL 10-IB NA NA MAT Credit YES YES NO NO

FOREIGN COMPANY : Any Company Incorporated Outside India. has a place of business in India whether by itself or through an agent, physically or through electronic mode; and INTRODUCTION conducts any business activity in India in any other manner In order to be considered a foreign company , one has to fulfill both the abovementioned criteria.

Income-tax rates applicable in case of Foreign companies for assessment year 2020-21 and 2021-22 are as follows: FOREIGN COMPANY : Assessment Year 2020-21 Assessment Year 2021-22 Nature of Income Royalty received or Fees for technical services 50 % 50 % NORMAL TAX Any other income from Indian operations 40 % 40 %

TI > Rs. 1 Crore TI > Rs. 10 Crore FOREIGN COMPANY : 2 % of Income Tax 5 % of Income Tax SURCHARGE EDUCATION CESS : 4% of Income Tax plus surcharge

CO OPERATIVE SOCIETY : An autonomous association of person united voluntarily to meet their common Economic Social and Cultural Needs and aspirations through a jointly owned enterprise. INTRODUCTION

TAX RATE 22% Income-tax rates applicable in case of co-operative society for assessment year 2020-21 and 2021-22 are as follows: CO OPERATIVE SOCIETY : Tax Rate Tax Rate (New Scheme) Co-Operative Society (Existing Scheme) Up to Rs. 10,000 10% NA NORMAL TAX 20% Rs. 10,001 to Rs. 20,000 22% Above Rs. 20,000 30% NA

Opted at concessional Rate TI > Rs. 1 Crore CO- OPERATIVE SOCIETY: 12 % of Income Tax 10 % of Income Tax SURCHARGE EDUCATION CESS : 4% of Income Tax plus surcharge

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