CBDT condones delay in filing of Form 10-IC
CBDT Condones Delay in Filing of Form 10-IC
CBDT has received various representations stating that Form 10-IC could not be filed along with the return of income for A Y 2020-21, which was the first year of the filing of this form. It has been requested that the delay in filing Form 10-IC may be condoned.
Because of the representations received for relief and to avoid genuine hardship to the domestic companies in exercising the option of the lower tax rate, The CBDT has condoned the delay in filing Form 10-IC for Assessment Year 2020-21, which was required to be filed for Companies opting for the concessional corporate tax rate of 22% under section 115BAA
CBDT gives extra time till June end for businesses to claim lower tax rates subject to fulfillment of certain conditions.
The Gist of CBDT Circular
The synopsis of the Central Board of Direct Taxes (CBDT) Circular No. 06/2022 Dated 17th March 2022 is as follows:
- CBDT has directed that the delay in filing this form for 2020-21 assessment years is condoned in cases where certain conditions are met.
- The deadline to file the Form which is required to be submitted with the Income Tax Returns to get the concessional corporate tax rate has been extended to 30 June 2022.
- Businesses can submit this form electronically before the due date.
- CBDT also announced that failure to submit this form would lead to denial of the concessional 22% tax rate
Section 115BAA of the Income-tax Act, 1961
Section 115BAA of the Income-tax Act, 1961 was inserted by the Taxation Laws (Amendment) Act, 201 9 with effect from 01.04.2020. As per the Section, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April 2020, shall, at the option of such person be computed at the rate of twenty-two percent subject to satisfaction of conditions contained in sub-section (2) of the Section.
As per subsection (5) of section 115 BAA of the Income Tax Act read with Rule 21 AE, of the Income-tax Rules, 1962, the assessee company is required to submit Form 10- IC electronically on or before the due date of filing of return of income under section 139(I) of the Act and such option once exercised shall apply to subsequent assessment years.
Purpose of filing Form 10-IC
As stated above, As per Section 115BAA of the Income Tax Act, Domestic Companies have the option to pay tax at a concessional rate of 22% (plus applicable surcharge and cess) provided they do not avail of specified deductions and incentives. Companies can opt for the concessional rate from the Assessment Year 2020 – 21 onwards only if they file Form 10-IC within the prescribed time limit.
Form 10-ICBy filing Form 10-IC, the domestic company can pay income tax at reduced rates of 22% (plus surcharge and cess), subject to fulfilling specified conditions.
Due Date to File form 10-IC
The taxpayer will be required to file Form 10-IC on or before the due date specified under sub-section (1) of Section 139 for furnishing the returns of the income for the previous year to avail the benefit.
In simple words, Form 10-IC should be submitted before the due date of ITR filing (specified in the Income Tax Act) of the financial year commencing on or after 1st April 2020.
New Due Date for Submitting Form 10-IC
Form 10-IC can now be filed till 30 June 2022, if the Income Tax return was originally filed within due date and the option to avail lower rate has opted in ITR 6.
Applicable taxpayers
Form 10-IC is required to file only if a Domestic Company chooses to pay tax at a concessional rate of 22% under Section 115BAA of the Income Tax Act, 1961.
Note: If the taxpayer has opted for concessional tax rates once, it shall apply to subsequent assessment years and cannot be withdrawn.
Conditions to Claim Lower Tax Rate
CBDT announced that the delay in filing of Form 10-IC as per Rule 21AE for the previous year relevant to AY 2020-21 is condoned in cases where the following conditions are satisfied:
- The return of income for A Y 2020-21 has been filed on or before the due date specified under section 139( I) of the Income Tax Act
- The assessee company has opted for taxation under section 115BAA of the Act in (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6
- Form 10-IC is filed electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later
Failure to Furnish Form 10-IC
Failure to furnish such option in the prescribed form on or before the due date specified under section 139(I) of the Act results in denial of concessional rate of tax of twenty-two percent to such person.
Procedure to submit Form 10-IC
Form 10-IC can be filed online mode after logging into the Income tax e-Filing portal. The procedure to file Form 10-IC is as follows:
- The domestic company needs to access the e-file option and then select the income Tax Forms.
- Click on the File Income Tax Forms option and Search for Form 10-IC and select the option’ Application for the exercise of option under Section 115BAA (5) of the Income Tax Act, 1961
- On the next page, select the relevant assessment year and proceed further to start filling out the application.
- There are broadly four sections in the Form 10-IC.
- In the first section, confirm the details of the assessing officer.
- In the second section basic details (including personal information & nature of business activities) of the domestic company. Select Sector as per applicable nature of business.
- The next section mentions the details of IFSC units (if any) and options exercised under Section 115BA. If the taxpayer had opted for taxation u/s 115BA, the taxpayer will need to withdraw the same by selecting the check box.
- On the verification page, enter the relevant details and agree to the terms and conditions. After filling in all the details, preview all the details filled and submit.
- Verify and select ‘yes’ to proceed to e-verify. The Form should be e-verified using Digital Signature Certificate.
On successful e-verification, the process of submitting the form to the income tax department will complete. The taxpayer will receive a confirmation on the registered email ID with the e-Filing portal. Additionally, taxpayers can also view the status on your Worklist under For your Actions tab.
The official Circular of CBDT pertaining to the Condones Delay in Filing of Form 10-IC is as follows:
CBDT condones delay in filing of Form 10-IC
