Whether to continue with the old rate or opt for new rate: A Comparison Tax Rate chart
Taxpayer now need to do the cost profit analysis before opting for lower tax rate of 22% as Domestic company which wants to opt for tax @22% for the FY 2019-20 is not eligible for
- Set off of any brought forward loss due to additional depreciation. However, they can set off of the same subject to old tax @25% or revised 15% (if MAT applicable) on balance income, if any and can exercise option to for new tax @22% in the later years.
- Brought forward MAT credit. However, they can claim the same subject to old tax @25% or 15% if MAT applicable, on balance income, if any and can exercise option for new tax @22% after utilising the credit.
Time to check the old rate vs. new rate which are as under:
[New domestic manufacturing companies can opt for lower effective tax rate of 17.16% undisputedly. However, for other companies, one can refer below chart:
Effective tax rates schedule for FY 2019-20 (AY 2020-21)
| SI No |
Particulars | Effective Tax Rate if option for lower tax rate is exercised |
If lower tax rate option is not exercised & wants to set off B/F loss of additional depr or claim MAT credit | |
| Effective Tax Rate | Effective MAT rate | |||
| 1. | Turnover > Rs.400 Crore during the FY 2017-18 | On balance income | On book profit | |
| · Income < Rs.1 crore | 25.17% | 31.20% | 15.6% | |
| · Income > Rs.1 crore < Rs.10 crore | 25.17% | 33.38% | 16.69% | |
| · Income > Rs. 10 crorc | 25.17% | 34.94% | 17.17% | |
| 2 | Other domestic companies
(in existence on or before 30-Sep- 2019) |
|||
| · Incomes < Rs.1 crore | 25.17% | 26% | 15.6% | |
| · Income > Rs.1 core < Rs.10 crore |
25.17% | 27.82% | 16.69% | |
| · Income > Rs.10 core | 25.17% | 29.12% | 17.47% | |
