Companies opting for the concessional rate of corporate tax of 22 per cent will get time till June 30 to file statutory forms to avail this option for assessment year 2020-21 (financial year 2019-20). Experts say that this will give relief to companies facing demand at the rate of 30 percent because they could not fill the above form.
The normal rate of corporate tax is 30 percent.
“Delay in filing Form 10-IC as per Rule 21AE of Income Tax Rules relating to AY 2020-21 last year is condoned,” the Central Board of Direct Taxes (CBDT) said in a circular. However, this will be subject to certain conditions such as if the tax return for AY 2020-21 is filed on or before the due date, the assessee company has opted for concessional tax by giving the option in ITR Form 6.
The new option will be available if “the required Form (10-IC) is filed electronically on or before June 30 or within 3 months from the end of the month in which this circular is issued, whichever is later,” Circular dated March 17 is mentioned.
On September 19, 2019, Finance Minister Nirmala Sitharaman had announced to promote growth and investment, a new provision has been inserted in the Income Tax Act from the financial year 2019-20, which allows any domestic company to have the option to pay income tax. gives. at the rate of 22 per cent subject to the condition that they shall not avail any exemption/incentive.
The effective tax rate for these companies will be 25.17 per cent inclusive of surcharge and cess. Further, such companies will not be required to pay Minimum Alternate Tax (MAT), he had said then. An ordinance was issued for the new provision which was later replaced by law. Accordingly, the Taxation Laws (Amendment) Act, 2019 inserted section 115BAA in the Income Tax Act with effect from 1st April, 2020.
To avail the concessional rate, a corporate assessee has to submit Form 10-IC electronically on or before the due date of filing of income return. Such option, once exercised, shall be applicable in subsequent assessment years. Failure to furnish such option in the prescribed form on or before the due date results in denial of concessional rate
As per CBDT, representations have been received stating that Form 10-IC cannot be filed with return of income for AY 2020-21, which was the first year of filing of this form. It is requested that the delay in filing Form I0-IC may be condoned. The Board said that the delay in filling the form is condoned to avoid genuine hardship to the domestic companies in exercising the option.
Chartered Accountant and former President of the Institute of Chartered Accounts in India, Ved Jain said that though many companies have opted for the new lower rate of tax of 22 per cent in AY 2020-21, but have not filed this form which is the reason to switch. was a statutory requirement. update rate. “While processing the withdrawal of the election year 2020-21, huge demands were created as a higher rate of 30 per cent was applied in processing. This will give a big relief to these companies.
Published on
March 19, 2022