RSM India

Key Highlights of Taxation Law Amendment Ordinance 2019 - September 2019

Newsflash on the Taxation Laws (Amendment) Ordinance 2019 promulgated by the President of India on 20th September 2019. The said ordinance has made certain amendments in the Income-tax Act 1961 (‘IT Act’) and the Finance (No. 2) Act 2019. Some salient features include:

  • A new provision (Section 115BAA) has been included in the IT Act, that allows any domestic companies an option to pay income tax at the rate of 22% without exemptions. These companies will not be required to pay MAT.
  • For new manufacturing companies set up from 1 October 2019 and operational before 31st March 2023, the existing tax rate is 25% which has been brought down to 15% (plus surcharge & cess) (Section 115BAB).
  • Further, the surcharge on the companies covered under section 115BAB has been kept at 10%
  • Companies which want to avail of the exemptions (section 10AA / Profit linked deduction under Chapter VI-A, Part C, etc) shall be taxed at the pre-amendment rates. However base MAT rate has been reduced from 18.50% to 15%.

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