Policy

CBDT notifies forms for avail lower corporate taxes

PTI New Delhi | Updated on February 14, 2020 Published on February 14, 2020

The Income Tax (I-T) Department has notified forms for companies to avail themselves of the reduced corporate tax rates that were announced in September last year.

The Central Board of Direct Taxes (CBDT) has notified Forms 10-IC and 10-ID for existing companies that want to avail lower I-T rate and new manufacturing firms, respectively.

In September last, the government announced a cut in base corporate tax for existing companies to 22 per cent from the current 30 per cent; and for new manufacturing firms, incorporated after October 1, 2019, and starting operations before March 31, 2023, to 15 per cent from the current 25 per cent. Companies opting for these new tax rates will have to forego all exemptions and incentives. The effective tax rate for existing units, after considering surcharges and cess such as Swachh Bharat cess and education cess — which are levied on top of the income and corporate tax rates, will be 25.17 per cent as compared to 34.94 per cent now. For new units, it will be 17.01 per cent as against 29.12 per cent now.

Form 10-IC will have to be filed by the companies that wish to avail the beneficial rate of 22 per cent upon relinquishment of the exemptions/incentives offered under the Income Tax Act. The e-Form 10-IC, which has to be furnished either under digital signature or electronic verification code (EVC), seeks general details of the company like name, PAN, registered address, date of incorporation and nature of business activities.

Published on February 14, 2020
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