From April 2020, a domestic company can opt to pay income tax at a concessional tax rate of 22% p.a. under Section 115BAA of the IT Act, 1961. To avail of this benefit, the company must submit Form 10-IC before filing its Income Tax Returns (ITR).
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Let us learn more about Form 10-IC of the Income Tax Act.
Rule 21AE (1) of the Income Tax Rules provides a way for a domestic company to avail of lower tax rates. As per the rule, a company can file Form 10-IC to get charged 22% under the Income Tax Act, 1961.
Other details of Form 10-IC:
Upon filing Form 10-IC, the company will get all the benefits available under Section 115BAA.
Under Sec 115BAA, a company will not be charged with the Minimum Alternate Tax (MAT) of a 15% tax rate.
Form no. 10-IC is to be submitted before or by the due date of furnishing the ITR returns of the previous year.
Once opting for Section 115BAA, the company cannot switch back to the normal tax slab rates in subsequent assessment years.
An individual can easily access Form 10-IC online through the income tax e-filing portal.
Let us go through the steps below to get Form no. 10-IC of the IT Act, 1961:
Step 1: Log in to the Income Tax Department portal using the credentials of the assessee
Step 2: Click on “e-File” from the top bar menu
Step 3: Choose “Income Tax Forms” from the drop-down options and then click on “File Income Tax Forms”
Step 4: Click on “Form 10-IC”. The page “Application for the exercise of option under section 115BAA (5) of the Income Tax Act, 1961” will open.
Step 5: Select the appropriate assessment year and click on “Continue” to download the file and submit it with due information.
Note: Form 10-IC cannot be filed in physical/ offline mode. The digitally signed Form 10-IC of the Income Tax Act must be only submitted through the income tax portal.
The Principal Officer of the company is the authority to duly verify and submit Form 10-IC to the IT Department.
Let us learn the process of filing Form 10-IC with the Income Tax Portal:
Step 1: Form 10-IC consists of the following four major sections:
Step 2: Fill in the details of the Assessing Officer in the first section:
Name & Address of the company
The PAN card number of the company
Assessment Year in which opting for benefits under Sec 115BAA
Step 3: In the second section, fill in the basic information about the company:
Name of the company
Whether a domestic company or not
PAN card number
Registered Address of the company
Date of incorporation of the company
Nature of business activities of the company
Step 4: Fill in the following additional details:
Details of any units in the International Financial Services Centre (IFSC) under Sec 80LA(1A)
If option under Sec 115BA(4) is exercised in form 10-IB
Step 5: At last, fill in all the relevant details, and agree to the terms and conditions
Step 6: Verify all the details by clicking the preview
Step 7: Click on “Proceed to e-verify” the Form 10-IC and press “Yes”
Step 8: The Principal Officer must digitally sign Form 10-IC to complete the form submission.
Note: Upon submission of the form, save the message with Transaction ID and Acknowledgement Receipt Number for your future reference.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
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