What is the tax rate for domestic companies? 

The meaning of a tax rate for the domestic companies means that it is taxed at the rate of a flat 30 %, but they can reduce their tax rate with the help of section 115BAA This section allows for to reduction of the rate of tax for domestic companies, which is announced by the Income Tax Act of 1961 in India. 

The tax rate for the domestic companies helps to reduce the tax rates for the domestic companies which is started from financial year 2019-20. The tax rate for domestic companies is under section 115BAA, which helps to reduce the tax rate to 22% with Surcharge and education Cess of 10% and 4%. The companies operating under Section 115BAA are taxed at a rate of 25.17. 

What are the key features of Section 115BAA? 

Here are the major key features of the Section 115BAA according to the Income Tax Act of 1961. 

• This section is only applicable to the domestic companies that are taxable in India.
• They will get a reduced tax rate of 22% tax rate with 10% surcharges and cess, and 4 % with the effective leading rate of 25.17. 
• Those companies that pay tax under section 115BAA are not required to pay the MAT. 
• The due date of filing the Income tax return for the domestic companies under section 115BAA is October 31 for the next financial year. 

What are the conditions specified under the eligibility criteria of section 115BAA?

Here are the specified condition eligibility criteria for section 115BAA, given below:

• To get an Allowance under section 10AA for the special economic zones. 
• claiming depreciation under section 32 and investment allowance under section 32AD for the new machinery and plant in the backward areas of Andhra Pradesh, Telangana, West Bengal, and Bihar. 
• Deduction under section 33AB for coffee, tea, and rubber manufacturing companies. 
• Claiming a deduction under section 35 for the research in the national laboratory or research association. 
• Claiming deduction under section 33ABA for the site restoration and companies engaged in the petrol or natural gas extraction or production. 
• For claiming a deduction under section 35AD for any specified business. 

What are the Section 115BAA tax rates? 

Here is the tax structure of the company under section 115BAA. 

• A Base tax is taxed at the rate of flat tax rate of 22% which is irrespective of income level.
• You need to pay a surcharge of 10% on the base tax in every case, not only when the income is high. 
• Additionally, you also need to pay the cess of 4%. 

Different tax rates for the domestic companies?

Here are the different tax rates given below for the domestic companies. 

• When the annual turnover or the annual gross revenue is lower than 400 crores, then you will be taxed at the rate of 25%. 
• For the domestic manufacturing companies, the tax rate under section 115BA is 25%. 
• Many domestic companies used to pay the tax at the rate of 22% under section 115BAA. 
• The companies which are under section 115BAB are taxed at the rate of 15%. 
• Other domestic companies are taxed at the rate of 30%.