The Ministry of Law and Justice vide Notification dated 12th December 2019, has published the Taxation Laws (Amendment) Act, 2019, which shall be effective retrospectively from 20th September 2019. The Taxation law amendment ordinance 2019 is thereby repealed and the action taken under the ordinance shall be deemed to have been done or taken under the New Amendment act 2019.
Key highlights of the amendment:
- The amendment is brought under Section 92BA, which defines the meaning of specified domestic transaction. Clause VA has been inserted in the section, namely:
“any business transacted between the persons referred to in sub-section (6) of Section 115BAB”
The abovesaid provision specifies tax on income of certain new domestic manufacturing companies. This provision shall be effective from 1st April 2020.
- A new provision (Section 115BAA) is inserted in the Income Tax Act, in which all domestic companies can opt to be taxed at 22 percent (plus applicable surcharge and education cess) subject to fulfillment of the prescribed conditions.
- An additional condition is proposed to be inserted in Section 115BAA(2) of the IT Act to provide that the total income of the Company shall be computed without: (i) without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (ii) without set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and (iii) by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.
- Section 115BAB has been inserted which provides new domestic manufacturing companies an option to pay income tax at the rate of 15 percent, provided they do not claim certain deductions.
- Amendment in FINANCE (NO. 2) ACT, 2019: Section 2(9) which specifies rates on Income-tax, will be substituted and it has come into force from April 01, 2019. Further, Part II of the First Schedule has been substituted.
Click here to read the Notification.
