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CA Final · Direct Tax Laws & International Taxation

Taxation of Companies & MAT

Chapter 1 · 3 formulas · 4 exam-critical pointers

Core concepts

  1. 01Domestic company tax rates: 25% (turnover ≤ ₹400 cr in 2 PYs back) / 30% (others) + surcharge + cess.
  2. 02Section 115BAA: 22% optional regime; surcharge 10%, effective ~25.17%.
  3. 03Section 115BAB: 15% for new manufacturing cos (incorp Oct 2019 to Mar 2024 — extended).
  4. 04MAT (Sec 115JB): 15% of book profit if normal tax lower — for non-115BAA/BAB companies.
  5. 05MAT credit carry-forward 15 AYs.

Flowchart

Company Tax Regimes | Normal (25%/30%) + MAT 15% | 115BAA (22%) — no MAT, surrender certain deductions | 115BAB (15%) — new mfg, no MAT, strict conditions | Foreign Co — 35% on Indian source income

Exam-critical pointers

  • ⭐Once opted for 115BAA/BAB — cannot withdraw subsequently.
  • ⭐MAT credit not available if opted for 115BAA/BAB.
  • ⭐Buy-back tax (Sec 115QA) — 20% (plus SC + cess); not in hands of shareholder.
  • ⭐Dividend taxation post-FY 2020-21: in hands of shareholder + TDS u/s 194 @ 10%.

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