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  • Writer's pictureArpita Maharana

Section -115BA Tax on Income of certain(manufacturing ) domestic companies

Updated: Oct 7, 2022

#taxationlaw #sec115BA #Tax #taxondomesticompanies #domestic #companies #manufacturingcompanies #ITAct #incometax #businesstax #domestictax #taxoncompany Sec 115BA

Tax on income of certain domestic companies.

What is Sec -115BA?

This section of the IT Act deals with applicable tax rates for manufacturing companies in India under certain circumstances. For productive businesses that fulfill all the provisions of Chapter XII (excluding Section 115BAAA & Sec 115 BAB), the tax rate is 25%.

One of the provisions of Section 115BA states that there is no time limit for manufacturing companies in the country by choosing low income taxes. They can use the benefits of Section 115 BAB whenever they have repaired the losses brought forward.

Note that in order to ensure that the tax rate remains at 25%, there are certain conditions that you must meet.

Applicability of sec- 115BA

Section 115BA of the Income Tax Act, 1961 is applicable from the Assessment Year 2017-2018. However, other subsections of Section 115, such as Section 115BAA and Section 115BAB, have come into effect from Assessment Year 2020-2021.

Terms and conditions to fulfil to qualify for sec-115BA.

Here is a list of conditions that you must consider in order to qualify for and apply the benefits of Section 115BA of the Income Tax Act:

1.Both the registration and establishment of a manufacturing company must be completed by or after 1 March 2016.

2.An organization should only be associated with a production business that produces articles or articles. This should include research on those topics and their distribution.

3.Ensure that the company has not yet claimed the benefits of other deductions under IT Act. This covers everything from Section 10AA to Section 80TT (including Section 32AD, Section 33ABA, Section 35 etc.

4.In addition, companies may not claim a deduction under the provisions of Chapter VI-A, under the heading “C. —Consolidation in respect of a particular income”.

5.The Company may use this option up to the deadline for ITR implementation.

6.If the company wants to opt out of the benefits s / s 115 BAA, then only then can it out of the benefits of Section 115BA.

7.As per the CBD rules, this option will be available on Form 10-IB. One needs to submit the form online under EVC or digital signature.

Manufacturing business that are not eligible for sec-115BA

Here are some manufacturing businesses that will not apply under Section 115BA:


2.Books printing or cinematograph film production .

3.Any company that bottles gas into cylinders.

4.Conversion of marble blocks or items of the same kind into polished slabs.

5.Other businesses that the Central Government has notified on this behalf.

Few things to know abt sec -115BA

Surcharge rate as per sec 115BA

According to Section 115BA of the Income Tax Act, the surcharge for any domestic manufacturing company with a net income below Rs. 10 crore is 7%. For domestic companies with a total income above Rs. 10 crores, a surcharge of 12% is applicable.

MAT under sec 115BA

Minimum alternate tax is applicable u/s 115BA, and all manufacturing businesses must bear this liability. As per the Income Tax Act, MAT is charged at 15% for such enterprises. Under Section 115BAA and Section 115BAB, MAT is not applicable.

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