CBDT vide an Order issued under section 119(2)(b) of the Income-tax Act, 1961 (‘Act’) through Circular No. 6/2022 dated 17.03.2022 condones the delay in filing of Form 10-IC by a domestic company for exercising the concessional rate of tax regime under section 115BAA if the same is filed by 30th June 2022 for the Assessment Year 2020-21.
CBDT vide Notification No. 10/2020 dated 12-02-2020 notified Form No. 10-IC for exercising the option for opting lower or concession rate of income tax by a domestic company under section 115BAA.
The provisions of section 115BAA and the option to pay tax as per section 115BAA is applicable from the assessment year 2020-21.
The Taxation Laws (Amendment) Act, 2019 has introduced a new optional scheme of taxation for domestic companies under which they can avail lower or concessional rate of income tax at 22 percent as against 25 percent or 30 percent of income tax rate. However, to avail the benefit it has to forego certain deductions and exemptions.
The flat rate of income tax is subject to a flat surcharge of 10 percent and irrespective of any turnover limit. Health and Education Cess of 4 percent shall also apply. Such a domestic company is also not required to pay MAT on their Book Profit since section 115JB does not apply to a domestic company which opts for section 115BAA taxation regime.
One of the conditions is that such a company cannot claim any deduction under Chapter VI-A of the Income Tax Act, 1961 except deduction under section 80JJA and section 80M.
Section 115BAA(5) provides that the option shall be exercised by a domestic company in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2020 and such option once exercised shall apply to subsequent assessment years.
The due date for filing of Income-tax return for company assessees was extended to 15th February 2021 by Notification No. 93/2020 dated 31.12.2020. Hence, the option to pay tax under concessional tax regime as per section 115BAA was required to be exercised by a domestic company by 15th February 2021 by filing the Form 10-IC.
The Order states that representations have been received by the Board stating that Form 10-IC could not be filed along with the return of income for A Y 2020-21, which was the first year of filing of this form. It has been requested that the delay in filing of Form 10-IC may be condoned.
The matter was considered by the Board and in order to avoid genuine hardship to the domestic companies in exercising the option under section 115BAA of the Act, the Board condones the delay in filing of Form 10-IC for the AY 2020-21 if-
1. The return of income for AY 2020-21 has been filed on or before the due date specified under section 139(1) of the Act,
2. The taxpayer has opted the option to pay tax under section 115BAA in the Schedule-General of the ITR-6, and
3. Form 10-IC is filed electronically on or before 30.06.2022.
This Order is issued by the Central Board of Direct Taxes in exercise of the powers conferred to it under section 119(2)(b) of the Act.
Read the full text of the CBDT Order u/s 119 on Condoning the delay in filing of Form 10-IC for AY 2020-21 vide Circular No. 6/2022 dated 17.03.2022
Circular No. 6/2022
F.No.173/32/2022-lTA-1
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi , the 17th March, 2022
Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form 10-IC for Asscssmcnt Year 2020-21- Reg.
Section 115BAA of the Income-tax Act, 1961 (the Act) was inserted by the Taxation Laws (Amendment) Act, 2019 w.e. f. 01.04.2020. As per the Section, the income-tax payable in respect of the total income of a person, bcing a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person be computed at the rate of twenty-two per cent subject to satisfaction of conditions contained in sub-section (2) of the Section.
1.2 As per subsection (5) of section 115BAA of the Act read with Rule 21AE of the Income-tax Rules, 1962 (the Rules), the assessee company is required to submit Form 10-IC electronically on or before the due date of filing of return of income u/s 139(1) of the Act and such option once exercised shall apply to subscquent assessment years.
1.3 Failure to furnish such option in the prescribed form on or before the due date specified uls 139(1) of the Act results in denial of concessional rate of tax of twenty-two per cent to such person.
2. Representations have been received by the Board stating that Form 10-IC could not be filed along with the return of income for AY 2020-21, which was the first year of filing of this form. It has been requested that the delay in filing of Form 10-IC may be condoned.
3. On consideration of thc matter, with a view to avoid genuine hardship to the domestic companies in exercising the option uls 115BAA of the Act, the Central Board of Direct Taxes, in exercise of the powers conferred under section 119(2)(b) of the Act, hereby directs that:-
The delay in filing of Form 10-IC as per Rule 21AE of the Rules for the previous year relevant to A.Y 2020-21 is condoned in cases where the following conditions are satisfied:
i) The return of income for AY 2020-21 has been filed on or before the due date specified under section 139(1) of the Act;
ii) The assessee company has opted for taxation uls 115BAA of the Act in (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6 and
iii) Form 10-IC is filed electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.
(Sourabh Jain)
Under Secretary (ITA-I)
Download CBDT Order u/s 119 on Condoning the delay in filing of Form 10-IC for AY 2020-21 vide Circular No. 6/2022 dated 17.03.2022 in pdf format
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