Income Tax 4th Amendment Rules 2020

The CBDT(Central Board of Direct Taxes) has released a notification on 12th February 2020 called the Income-tax (4th Amendment) Rules, 2020. The CBDT has introduced Forms 10-IC and 10-ID to opt for reduced tax rates as declared under Section 115BAA and

Section 115BAB

respectively for domestic companies.

Background

With the introduction of

Section 115BAA

of the Income Tax Act, 1961, domestic companies now have an option to pay tax at flat 22% effective 1st April 2020. With the introduction of Section 115BAB of the Income Tax Act, 1961, new domestic manufacturing companies will have an option to pay tax at a flat 15% effective 1st April 2020 provided they satisfy some conditions.

Income Tax (4th Amendment) Rules 2020

The Income Tax (4th Amendment) Rules 2020 shall come into effect on April 1 2020. There are two new rules inserted after rule 21AD:

Rule 21AE:

This rule introduces the Form 10-IC to opt for the new taxation under subsection (5) of Section 115BAA. This is applicable for any previous year relevant to the assessment year beginning on or after the 1st April 2020. This new Form 10-IC can only be submitted electronically duly authorised/verified with a digital signature or with an electronic verification code. The procedure for filing for Form 10-IC, details on how to generate verification code, and the policies around security, archiving and retrieval need to be put in place by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems).

Rule 21AF:

This rule introduces the Form 10-ID to opt for the new taxation under subsection (7) of Section 115BAB. This is applicable for any previous year relevant to the assessment year beginning on or after the 1st April 2020. This new Form 10-ID can only be submitted electronically duly authorised/verified with a digital signature or with an electronic verification code. The procedure for filing for Form 10-ID, details on how to generate verification code, and the policies around security, archiving and retrieval need to be put in place by the Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems).

Principal Rules Appendix II:

Forms 10-IC and 10-1D to be inserted after

Form 10-IB

Form 10-IC

Here are the details of

which needs to be filled: Addressed to the Assessing Officer, the companies need to furnish the name of Principal Officer in the company who is exercising the option under sub-section (5) of Section 115BAA on behalf of the company (name, address, PAN, etc. to be filled), and specify the previous years. If the company has any units in the International Financial Services Centre (referred to in sub-section (1A) of Section 80 LA), then details of the units need to be provided. If option under sub-section (4) of Section 115BA has been exercised in Form 10-IB by the company, then it has to be declared withdrawn and also specify the previous years.

Form 10-ID

Here are the details of

Back to Learn

Frequently Asked Questions

Common questions about Income Tax 4th Amendment Rules.

Forms 10-IC and 10-ID are the newly introduced forms under the Income-tax (4th Amendment) Rules, 2020. Form 10-IC is for domestic companies to opt for the reduced tax rate of 22% under Section 115BAA. Form 10-ID is for new domestic manufacturing companies to opt for the reduced tax rate of 15% under Section 115BAB.

The Income-tax (4th Amendment) Rules, 2020 will come into effect on April 1, 2020.

No, Forms 10-IC and 10-ID can only be submitted electronically, duly authorized or verified with a digital signature or an electronic verification code.

The Principal Director General of Income-tax (Systems) or the Director-General of Income-tax (Systems) is responsible for setting up the procedures for filing Forms 10-IC and 10-ID, including details on how to generate verification codes, and policies around security, archiving, and retrieval.

In Form 10-IC, companies need to provide the name, address, and PAN of the Principal Officer exercising the option under Section 115BAA. They also need to specify the previous years for which the option is being exercised and provide details of any units in the International Financial Services Centre.

The article does not provide specific conditions for a new domestic manufacturing company to opt for the reduced tax rate under Section 115BAB. However, Form 10-ID requires companies to provide the date of commencement of manufacturing operations.

Yes, if a company has previously exercised the option under Section 115BA by filing Form 10-IB, it needs to declare the withdrawal of that option while filing Form 10-IC to opt for the reduced tax rate under Section 115BAA.

The official notification along with Forms 10-IC and 10-ID can be accessed through the PDF embedded in the article.

The article does not provide specific requirements for exercising the option under Section 115BAA or Section 115BAB, other than the need to file Forms 10-IC and 10-ID respectively.

No, the article does not mention any specific deadline for filing Forms 10-IC and 10-ID. However, it states that the forms are applicable for any previous year relevant to the assessment year beginning on or after April 1, 2020.