What is Section 115 BAA of income tax?
Asked by: Filomena Swift | Last update: January 27, 2026Score: 4.7/5 (38 votes)
Section 115BAA of India's Income Tax Act allows eligible domestic companies to opt for a lower corporate tax rate of 22% (plus applicable surcharge and cess, making it ~25.17% effective) from the financial year 2019-20, in exchange for giving up most exemptions and deductions, and the choice, once made, is irrevocable for that company. This provision offers a simplified tax regime, exempts companies from Minimum Alternate Tax (MAT), and is designed to boost investment and economic growth.
What is Section 115 BAA of Income Tax Act?
Section 115BAA of the Income Tax Act of 1961 is a section that outlines a lower tax provision for domestic companies. Domestic companies in India can opt for tax payment under section 115BAA, where, instead of the normal corporate tax rate of 30%, they only have to pay tax at a rate of 22%.
Is section 115BBE applicable to all taxpayers?
Unreported sources of income are subject to Section 115BBE. Any income not included in the books of accounts, returns, or other documents provided under the Income Tax Act is considered such income. All taxpayers, including partnerships, corporations, and individuals, are covered by this section.
Who is eligible for Section 115BA?
Conditions to Fulfill to Qualify for Section 115BA
The organisation has to be associated only with a manufacturing business that produces articles or things. This must include research about those articles and their distribution of it as well.
What is the rule 115 of income tax rules?
For the purpose of computing the income, Rule 115 of the Income-tax Rules, 1962 says that the telegraphic buying rate on a specified date shall be applied in respect of incomes which accrue or arise in India or are deemed to accrue or arise to the assessee in India.
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How does Section 115 work?
Filing a False Document under California Penal Code Section 115 PC makes it a felony to file any forged or false document with a public office. The statute requires a prosecutor to prove the following elements: A defendant provided a document for filing, recording or registration with any public office in California.
What is Section 115 of the IRS?
Many tax laws apply differently to government entities than to other organizations and individuals. The primary tax difference from other taxpayers is the general exemption from income tax. IRC section 115 excludes from gross income any income derived from the exercise of or administration of any public function.
What is the difference between Section 115BA and 115BAB?
For Section 115BAB - The eligible domestic company has to exercise the option on or before the due date for furnishing the first of the returns of income, which the company is required to furnish under the Act. For Section 115BA - This option should be exercised by electronically furnishing Form No. 10-IB.
Is inr ₹7 lacs income tax-free in India?
With the recent changes in the Indian Income Tax Act, it's now possible to pay zero tax on a salary of up to Rs. 7 lakhs. To pay zero tax on a 7 lakh salary using the old tax regime, maximize deductions: Claim Tax Rebate under Section 87A.
Is it better to opt for old tax regime or new tax regime?
If your tax saving investments are more than Rs. 7,08,500, then the old regime is beneficial for you at an income level of Rs 20 lakhs. For any income range more than Rs 25 lakhs, the old regime would be more beneficial if the tax saving deductions are more than Rs 8 lakhs.
What is the income tax rate for 115BBE?
Tax Rates Under Section 115BBE
As per Section 115BBE, if the total income of an assessee includes income from unexplained sources referred to in Sections 68, 69, 69A, 69B, 69C, or 69D, the tax rate on such income will be 60%.
What is the penalty for 115BBE?
(b) 60% of undisclosed income of the specified previous year in any other case. 10% of tax payable under section 115BBE. b) Any entry relevant for computation of total income of such person has been omitted to evade tax liability.
What is the tax rate for 115B?
Life Insurance business - Section 115B * Where the total income of an assessee includes any profits and gains from life insurance business, then the income-tax payable shall be @12.5% of profits and....
Who is a 45% tax payer?
A "45% taxpayer" refers to someone in the highest income tax bracket (the additional rate in the UK, over ~£125k) or an individual with a very high effective tax rate (including federal, state, local, corporate shares) as some studies show the super-rich paying rates over 45% when all taxes are counted, while campaigns like #First45TaxFree advocate making the first $45,000 of income tax-free for workers, highlighting different contexts for the "45%" figure.
How can I reduce my taxable income?
To reduce taxable income, maximize contributions to pre-tax retirement accounts (401(k), IRA) and Health Savings Accounts (HSAs), strategically use itemized deductions like charitable giving or mortgage interest, claim available tax credits (education, child care), and consider strategies like tax-loss harvesting to offset gains. For businesses, deduct eligible expenses like home office or equipment depreciation.
What is the last date for company audit 2025?
The Central Board of Direct Taxes (CBDT) has decided to extend the specified date for filing various audit reports for the Previous Year 2024–25 (Assessment Year 2025–26), from September 30, 2025 to October 31, 2025, for assessees referred to in clause (a) of Explanation 2 to sub-section (1) of section 139 of the ...
Who pays 42% tax in India?
In India, the 42% income tax rate applies to high-income earners and top corporate taxpayers who fall under the highest tax bracket after adding surcharge and cess.
How to avoid 40% tax?
To avoid paying a 40% tax rate (or higher rates), focus on reducing your taxable income through tax-advantaged accounts like 401(k)s, IRAs, HSAs, and salary sacrifice, maximizing deductions and credits, using strategies like tax-loss harvesting, deferring income if self-employed, making charitable donations, and seeking professional advice to utilize tax loopholes and credits effectively, as paying taxes is legally required but managing your liability is strategic.
How much tax will I pay if my salary is 720,000 in India?
If you make ₹ 720,000 a year living in India, you will be taxed ₹ 145,160. That means that your net pay will be ₹ 574,840 per year, or ₹ 47,903 per month.
How is 12.75 lakh tax free?
For salaried individuals, the ₹75,000 standard deduction further boosts the effective tax-free limit – if your salary is ₹12.75 lakh, after the standard deduction your taxable income is ₹12 lakh, meaning you also pay zero tax.
Who is eligible for the new tax regime?
New Tax Regime is beneficial to: 0.5: Individuals who do not have significant deductions or investments in tax-saving instruments. New entrants to the workforce, who may prefer lower tax rates with few obligations for financial planning.
Who can opt for section 115BA?
Tax Rates under Section 115BA
Domestic manufacturing or production enterprises are eligible for a special 22% tax rate, provided they meet the requirements outlined in the Income Tax Act. Additionally, a 7% surcharge applies if income exceeds Rs. 1 crore. The surcharge is 12% if it exceeds Rs.
What are the drawbacks of Section 115?
Being found guilty of a felony under Penal Code 115 can increase the severity of penalties faced in subsequent legal issues. If an individual is later involved in another criminal case, the felony record might influence judicial decisions, potentially resulting in harsher sentencing.
How do I avoid 20% tcs on foreign remittance?
To avoid the 20% TCS (Tax Collected at Source) on foreign remittances, keep total transfers under the ₹7-10 lakh annual threshold (depending on purpose), use education loans for studies to get 0% TCS, remit for medical treatment (lower rates apply), split expenses across family members or financial years, use NRI accounts if applicable, or use foreign bank accounts/cards, but remember you can claim deducted TCS as a credit when filing your Income Tax Return (ITR).
How much FD interest is tax free in India?
If your interest income from all FDs is less than ₹ 50,000 in a year, the income is exempt from TDS. On the other hand, if your interest income is over ₹ 50,000, the TDS would be 10%. Besides, if you do not have a PAN card, the bank can deduct 20% of TDS.