It is a very well-known fact that the domestic companies get the option to pay their corporate taxes at the concessional tax rate under section 115BAA and 115BAB of the Income Tax Act, 1961 by filing Form 10IC and F0rm 10ID pertaining to certain conditions. Moreover, the domestic companies that wish to opt for the concessional tax rates are required to exercise the option from the Assessment Year 2020-21 onwards.
A tax levied on the profits of a corporation or a company. The taxes are paid on a taxable income of the company. This taxable income includes revenue minus cost of goods sold, general and administrative expenses, also the cost of selling and marketing, research and development, depreciation and other operating costs.
In other words, the corporate tax is a direct tax applicable to all the companies incorporated and registered in India under the companies act 2013. These companies are required to pay the corporate tax as per rate decided by the ministry of corporate affairs.
After the 37th GST council meeting held in the year 2019, the Corporate Tax Rate cut came in to light. First time the corporate tax rate went down from 35% to 25.7% that also included cess and surcharge. This was a great benefit for those having huge investment in the sector as it created higher probability of profits.
These corporate tax concession rates were supposed to be applicable to only those taxpayers who avail of the same on a voluntary basis. So if a company wishes to switch to the lower corporate tax rate policies, the company needs to file Form 10-IC and Form 10-ID.
For the companies that adopt the tax rate under corporate tax concession, needs to file the form 10IC and 10ID with appropriate information before the due date of filing the Income tax return.
Suggested Read: How to save tax for your Private Limited Company?
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