Circular No: 29/2019
F. No. 142/20/2019-TPL
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
New Delhi. 2nd of October, 2019
Subject: Clarifications in respect of- option exercised under section 115HAA of the Income-tax Act, 1961 inserted through The Taxation Laws (Amendment) Ordinance, 2019- reg.
The Taxation Laws (Amendment) Ordinance. 2019 (the Ordinance) has been promulgated by the President of India on September 20. 2019, The Ordinance, inter alia, inserted a new section 115BAA in the Income Tax Act, 1961 (the Act) with effect from April 1, 2020.
2. Section 11513AA so inserted. inter alia. provides that,-
(d) a domestic company shall, at its option, pay tax at a lower rate of 22 percent for any previous year relevant to the Assessment Year beginning on or after 1st April 2020. subject to certain conditions, including that the total income should be computed without claiming any deduction or exemption;
(e) the option is required to be exercised by the company before the due date of furnishing return of income: and
(f) the option. once exercised, cannot be subsequently withdrawn and shall apply to all subsequent assessment years,
3. The Ordinance also amended section 1115111 of the Act relating to Minimum Alternate Tax (MAT) so as to, inter alia, provide that the provisions or said section shall not apply to a person who has exercised the option referred to under newly inserted section 115BAA.
4. Representations have been received from the stakeholders seeking clarification on following issues relating to the exercise of option under section 115BAA
(a) Allowability of brought forward loss on account of additional depreciation; and
(b) Allowability of brought forward MAT credit.
4,1 These issues have been examined in the Board and in order to provide clarity in the matter, the clarifications are issued in the following paras.
To read more in details, find the enclosed file