In order to provide relief to newly setup domestic companies engaged solely in the business of manufacture or production of article or thing, a new section 115BA has been inserted in the Income Tax Act 1962, which provide option to domestic company to pay tax @25% for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2017. Provided following conditions are fulfilled :

1. the company has been setup and registered on or after 1st day of March, 2016;
2. the company is engaged in the business of manufacture or production of any article or thing and is not engaged in any other business;
3. the company while computing its total income has not claimed any benefit under section 10AA , benefit of accelerated depreciation, benefit of additional depreciation, investment allowance, expenditure on scientific research and any deduction in respect of certain income under Part-C of Chapter-VI-A other than the provisions of section 80JJAA; and
4. the option is furnished in the prescribed manner before the due date of furnishing of income.

Note:

In a major boost to companies, finance minister Arun Jaitley extended the reduced corporate tax rate for companies with turnover of upto Rs 250 crore in his speech presenting Budget 2018-19 in Lok Sabha.

“Towards fulfilment of my promise to reduce corporate tax in a phased manner, I now propose to extend benefit of reduced corporate tax rate of 25% to companies which have reported turnover of up to Rs 250 crore in financial year 2016-17,” said Jaitley.