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

1. 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.
2. 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%