How to file Section 115BAB & From 10ID

For: Domestic Manufacturing Companies

Conditions:

Company Register on or After 01/10/2019
Company commences its production on or before 31.03.2024
Company Not using building previously used as a hotel or conventional centre
Company used only New Plant and machinery
- 20% old plant and machinery allowed
- Imported old plans and machinery treated as New.
Company Engaged only in the manufacturing business (Computer software production, film production, printing books, Packing and Repacking not included in manufacturing business)

Normal Tax Rate (Old Regime):

If turnover less than 400 Crore: 25% Basic Tax plus 10% surcharge and 4% cess
If turnover More than 400 Crore: 30% Basic Tax plus 10% surcharge and 4% cess

Reduced Tax Rate After Filing for 10ID (New Regime):

Any turnover: 15% Basic Tax plus 10% surcharge and 4% cess)

Is it mandatory for all applicable taxpayers (Manufacturing Companies) to file Form 10-ID?

No. This is optional. Form 10-ID is required to file only one time if a manufacturing Company chooses to pay tax at a concessional rate of 15%, However, once the option has been exercised in a particular assessment year, it cannot be withdrawn and must continue to be applied in subsequent assessment years.

How can I file Form 10-ID?

Can file Form 10-ID only in online mode after logging into the e-Filing portal and the form can only be submitted through Digital Signature Certificate

Due date:

CBDT issues Income Tax Circular 06/2022 Dated: 17th March 2022 Form 10-ID can now be filed till 30 June 2022

Pros:

Reduced Tax Rate
MAT provisions are Not Applicable

Cons:

Brought forward losses cannot allow to set off from current year profits
Unabsorbed depreciation cannot allow to set off from current year profits
MAT Credit Not Allowed to set off from current year tax
Certain other special expenses & deductions are also not allowed to claim

When this option is to be exercised?

The correct answer to this question can only be answered after computing and comparing the tax liability under both regimes, however, it should not be advisable to opt new regime if there are brought forward losses, unabsorbed depreciation, or MAT credit available to setoff.

27 Apr

Shivani Gupta

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