Amendment of section 115BAB.
52. In section 115BAB of the Income-tax Act, in sub-section (2),––
(i) in clause (c), in sub-clause (i), for the words, figures and letters ‘Chapter VI-A under the heading "C.-Deductions in respect of certain incomes" other than the provisions of section 80JJAA’, the words, figures and letters “Chapter VI-A other than the provisions of section 80JJAA or section 80M” shall be substituted;
(ii) after clause (c), the following Explanation shall be inserted, namely:––
'Explanation.––For the purposes of clause (b), the “business of manufacture or production of any article or thing” shall include the business of generation of electricity.'.
Notes on Clauses:
Clause 52 of the Bill seeks to amend section 115BAB of the Income-tax Act relating to tax on income of new manufacturing domestic companies.
It is proposed to amend said sub-clause (i) of sub-section (2) of the aforesaid section so as to modify this condition to provide that the total income by the company shall be computed without deduction under any provisions of Chapter VI-A other than the provisions of section 80JJAA or section 80M instead of computation without deduction under any provisions of Chapter VI-A under the heading "C.- Deduction in respect of certain incomes" other than the provisions of section 80JJAA.
Sub-section (1) of said section provides that the income-tax payable by a domestic company shall be at the rate of fifteen per cent. if the conditions in sub-section (2) of the said section are satisfied.
Sub-section (2) of said section specifies the conditions which a domestic company needs to satisfy to be eligible to be taxed at the rate of fifteen per cent.
It is proposed to insert an Explanation to the said sub-section (2) so as to provide that “manufacturing or production of an article or thing” for the purposes of clause (b) of the said sub-section shall include the business of generation of electricity.
These amendments will take effect from 1st April, 2020 and will, accordingly, apply in relation to the assessment year 2020-2021 and subsequent assessment years.
