Taxation Law (Amendment) Act inserted two new sections (section 115BAA and section 115BAB) to provide domestic companies with an option to be taxed at concessional tax rates.
Various conditions are provided in these provisions to opt for the new tax regimes including non-availability of deductions under Chapter-VIA except deductions under Section 80JJAA or Section 80LA.
The Finance Bill 2020 proposes to allow the deduction, to the companies opting for the concessional rates, under section 80M as well. Section 80M is a new section which is proposed to be inserted to provide for deduction in case of inter-corporate dividends.
At present, the concessional tax rate of 15% under section 115BAB is allowed to new domestic manufacturing companies.
To attract investment in the power sector, Finance Bill proposed to extend the benefit of the concessional corporate tax rate of 15% to new domestic companies engaged in the business of generation of electricity.
Section 115BAB has been proposed to be amended to consider the generation of electricity as manufacturing or production of any article or thing. Hence, the benefit of the concessional rate under section 115BAB shall also be available to companies engaged in the business of generation of electricity.