In good news for business owners, the Central Board of Direct Taxes, or CBDT, has given businesses some extra time to file a key form that is needed to qualify for a business tax reduction. companies without tax incentives, which was offered to them in 2019 This applied to income received from 2020. According to a statement from the CBDT, the deadline has now been extended until June 30 this year to obtain a refund of tax of up to 22%.
The form in question, Form 10-IC, only needs to be filed if a domestic corporation elects to pay tax at the preferential rate of 22% under section 115BAA of the Income Tax Act of 1961. income. Pursuant to Section 115BAA of the Income Tax Act, domestic corporations have the option of paying tax at a preferential rate of 22% (plus applicable surcharge and tax) provided they do not not benefit from the specified deductions and incentives. Businesses can opt for the prime rate starting in the 2020 – 21 assessment year only if they file Form 10-IC within the required time frame.
If companies exercise the option for one year, the rule will also apply in subsequent years. Companies must complete the form in online mode only. Tax returns for income earned in fiscal year 20 were required to be filed in the tax year beginning April 1, 2020 (AY2020-21).
However, this did not go as planned as several companies that claimed the benefit of low tax filing rates did not separately file the electronic form in this regard. This led to complications.
“Failure to provide such option in the prescribed form by the due date specified in Section 139(I) of the Act shall result in disallowance of the preferential tax rate of twenty-two percent at this person,” the CBDT said in a statement.
“Reports have been received by the Council indicating that the Form 10-IC could not be filed with the tax return for AY 2020-21, which was the first year of filing this form. It was requested that the delay in filing Form I0-IC could be tolerated,” he added.
The statement also noted that “in order to avoid real hardship for domestic corporations in exercising the option” of the tax rate reduction, the tax authority ordered that the delay in filing Form 10 -IC according to rule 21AE of the rules for the previous year concerning AY 2020-21 is tolerated in cases where the conditions are met.
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