What is Form 10-IC, how to file Form 10-IC on Income Tax Portal
The Indian Government introduced section 115BAA on the 20th of September 2019 through the Taxation Amendment Ordinance 2019 with the objective of allowing domestic companies with lower tax rates. Under this section, domestic companies are given the option to pay tax at the rate of 22% (instead of 25% or 30%). One of the most important aspects of section 115BAA is that Minimum Alternate Tax (MAT) @ 15% will not be applicable to the companies opting for a lower tax rate u/s 115BAA.
But do you know how a domestic company can opt for a concessional tax rate under section 115BAA? If not, this article is meant for you.
What is Form No. 10-IC?
- Referring to Rule 21AE of the Income Tax Rules, the benefit of concessional tax rate u/s 115BAA can be taken only after furnishing Form No. 10-IC.
- By filing Form 10-IC, the company shall be entitled to pay tax at the rate of 22% plus a surcharge of 10% and cess 4%. The effective tax rate will be 25.168%.
- Form No. 10-IC is required to be furnished on or before the due date of furnishing the return of income u/s 139(1) for any previous year relevant to the assessment year commencing on or after 01-04-2020.
- The option once exercised under section 115BAA shall apply to subsequent assessment years.
How to submit Form No. 10-IC?
- Form No. 10-IC shall be furnished electronically on the Income tax portal under a digital signature or electronic verification code.
- Form No. 10-IC is available on the login of the assessee on the Income Tax Portal.
- The Principal Director General of Income Tax (Systems) or the Director General of Income Tax (Systems) is the authority responsible for specifying the necessary procedure for filing Form No. 10-IC
Can Form 10-IC be submitted in physical mode to the Income Tax Department?
No, Form 10-IC can not be submitted in physical mode to the Income Tax Department. The assessee has to log in to the income tax portal and furnish the form online duly verified by digital signature.
What are the steps for filing Form 10-IC?
- Log in to the Income Tax portal using your PAN and password.
- Go to e-file> Income Tax Forms > File Income Tax Forms
- Search form 10-IC and select the option ‘Application for the exercise of option under section 115BAA (5) of the Income Tax Act
- Select the relevant assessment year and proceed for filing the four sections of the form
Section I: Confirm the details of the assessing officer in the first section
Section II: Enter Basic Details (including personal information & nature of business activities) of the domestic company. Also, select the sector as applicable to the nature of the business of the company. Mention the sub-sector applicable.
Section III: Mention the details of the IFSC unit (if any) [Generally not relevant]. If you had opted for taxation u/s 115BA, you will need to withdraw the same by selecting the check box
Section IV: Verification page where you need to enter the required details and agree to the terms and conditions.
- After filling in the details as above, preview all the details and if found correct, press submit button
- On submission, you will be asked to verify. Select ‘yes’ to proceed to e-verify using a digital signature
What is the time limit to furnish Form 10-IC?
As already discussed above, Form 10-IC is required to be furnished online on or before the due date of furnishing ITR under section 139(1). In the case of companies, the due date of furnishing ITR is generally 31st October. Therefore, if you intend to opt for section 115BAA, you need to furnish Form 10-IC before 31st October.
Is it required to file Form 10-IC every year for a company opting for section 115BAA?
Once opted for section 15BAA by filing Form 10-IC, the company is not required to again file the form in the subsequent years.
About Author: The article is contributed by Mr. Naveen Goyal who is a practicing Chartered Accountant with experience of over 16 years in direct and indirect taxes. For queries connect: admin@taxwink.com
Disclaimer: The above article is meant for educational purposes only and does not have any persuasive value. Therefore, readers are requested to act diligently and under consultation with any professional before applying the information contained in this article.
