Corporate Tax Rate Cut- Fine Print Analysis

Taxation Laws (Amendment) Ordinance promulgated by Hon. President of India

A. Reduced tax rate applicable to certain domestic companies (115BAA)

• Section 115BAA has been inserted to provide that lower tax rate of 22% (plus applicable surcharge and cess) shall be chargeable to domestic companies.
• Domestic companies have been given an option to pay income tax at the rate of 22%, provided, they do not avail any incentive/exemption (Refer Note 1) offered under the Income Tax Act.
• Such companies shall not be required to pay any Minimum Alternate Tax (MAT).
• Total income shall have to be computed without set off of any losses carried forward from earlier years, if such loss is attributable to any of the tax incentives / exemptions (Refer Note 1).