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25% tax rate to msmes on the basis of turnover and corporate opted section 115ba

Murugesan (Tax consultant) (43 Points)

10 October 2018

Dear All,

Kindly suggest us, whether applicability of tax rate whether 25% or 30%

Company incorporated on 16-Dec-2015

Turover (Rupees in Crore) of last three financial years are FY 2015-16 Rs.37.42, FY 2016-17 Rs.236.22 and FY 2017-18 Rs.108.55

[For the Assessment Year 2018-19, a domestic company is taxable at 30%. However, tax rate would be 25% where turnover or gross receipt of the company does not exceed Rs. 50 crore in the previous year 2015-16]

[Section 115BA has been inserted w.e.f: ASST YEAR 2017-16, to opt 25% rate, 'The Company has been set-up and registered on or after 01-March-2016]

Kindly clarrify whether we need to pay Income tax @ 25% or 30%

Thanks & Regards: Murugesan Muthuraman, Erode (+919677480111)

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3 Replies

Rakesh Joshi (CA Final) (1272 Points)
Replied 10 October 2018

If the Turnover or Gross receipts for FY 2015-16 is not above 50 Crore then the company can pay tax @ 25%.

I think Section 115BA is for Domestic Co's who are paying tax @ 30% can opt to pay tax @ 25% only if the conditions under subsection 2 are satisfied.

Since your Turnover in FY 2015-16 does not exceed 50 Crore then you can pay tax @ 25%.

Murugesan (Tax consultant) (43 Points)
Replied 11 October 2018

Thank you Sir for your reply and clearing my doubt "Corporate Tax @ 25% u/s 115BA or applicable to MSME in respect of Turnover"

Thanks & Regards:

Murugesan M

Chandravijay Shah (CA) (53 Points)
Replied 08 July 2019

In order to avail Tax Rate of 25 %, a Company qualifying u/s 115BA, though required to satisfy certain conditions, need not satisfy the condition of specified Threshold of Gross Turnover or Gross Receipts.

Whereas any Company, other than that qualifying u/s 115BA, must satisfy the condition of specified Threshold of Gross Turnover or Gross Receipts in order to avail Tax Rate of 25 %.