Insertion of new section 115BA.
49. After section 115B of the Income-tax Act, with effect from the 1st day of April, 2017, the following section shall be inserted, namely:-
Tax on income of certain domestic companies.
“115BA. (1) Notwithstanding anything contained in this Act but subject to the provisions of section 111A and section 112, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2017, shall, at the option of such person, be computed at the rate of twenty-five per cent., if the conditions contained in sub-section (2) are satisfied.
(2) For the purposes of sub-section (1), the following conditions shall apply, namely:-
(a) the company has been set-up and registered on or after the 1st day of March, 2016;
(b) the company is engaged in the business of manufacturing or production of any article or thing; and
(c) the total income of the company has been computed,-
(i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AC or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AC or section 35AD or section 35CCC or section 35CCD or under any provisions of Chapter VI-A under the heading “C.-Deductions in respect of certain incomes” other than the provisions of section 80JJAA;
(ii) without set off of any loss carried forward from any earlier assessment year if such loss is attributable to any of the deductions referred to in sub-clause (i); and
(iii) depreciation under section 32, other than clause (iia) of sub-section (1) of the said section, is determined in the manner as may be prescribed.
(3) The loss referred to in sub-clause (ii) of clause (c) of sub-section (2) shall be deemed to have been already given full effect to and no further deduction for such loss shall be allowed for any subsequent year.
(4) The option by the person referred to in sub-section (1) shall be exercised in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the relevant previous year.”.
Notes on Clauses:
Clause 49 of the Bill seeks to insert a new section 115BA in the Income-tax Act relating to tax on income of certain domestic companies.
Sub-section (1) of the proposed new section provides that the income-tax payable in respect of the total income of a person being domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2017 shall, at the option of such person, be computed at the rate of twenty-five per cent., if the conditions contained in sub-section (2) of the said section are satisfied.
Sub-section (2) of the proposed new section provides that the conditions referred to in sub-section (1) are the following, namely:–
(a) the company has been set up and registered on or after the 1st day of March, 2016;
(b) the company is engaged in the business of manufacturing or production of any article or thing; and
(c) the total income of the company has been computed, –
(i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AC or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of subsection (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AC or section 35AD or section 35CCC or section 35CCD or under any provisions of Chapter VI-A under the heading “C.– Deductions in respect of certain incomes” other than the provisions of section 80JJAA;
(ii) without set off of any loss carried forward from any earlier assessment year if such loss is attributable to any of the deductions referred to in sub-clause (i); and
(iii) depreciation under section 32, other than clause (iia) of sub-section (1) of the said section is determined in the manner as may be prescribed.
Sub-section (3) of the proposed new section provides that the loss referred to in sub-clause (ii) of clause (c) of sub-section (2) shall be deemed to have been already given full effect to and no further deduction for such loss shall be allowed for any subsequent year.
Sub-section (4) of the proposed new section provides that the option by the person referred to in sub-section (1) shall be exercised in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the relevant previous year.
These amendments will take effect from 1st April, 2017 and will, accordingly, apply in relation the assessment year 2017-2018 and subsequent years.
