Exercise of Option us 115BA-Rule 21AD Form 10-IB. Option by domestic company to be exercised electronically either under DSC or EVC

Exercise of Option us 115BA-Rule 21AD Form 10-IB. Option by domestic company to be exercised electronically either under DSC or EVC

Under the newly inserted section 115BA (by Finance Act, 2016) w.e.f 01/04/2017, every domestic company has the option of paying income tax at the rate of 25% on fulfilment of certain conditions. The company willing to opt for such rate of tax is required to exercise such option in the prescribed manner on and before the due date for furnishing of its return of income u/s 139(1).

The CBDT has notified new Rule 21AD for prescibing procedures for exercise of option u/s 115BA along with Form 10-IA as Application for exercise of option under sub-section (4) of section 115BA.

MINISTRY OF FINANCE
Department of Revenue
(CENTRAL BOARD OF DIRECT TAXES)

Notification No. 36/2017

New Delhi, the 2nd May, 2017

INCOME-TAX

S.O. 1381(E).—In exercise of the powers conferred by section 295 read with section 115BA of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely: –

1. (1) These rules may be called the Income-tax (9th Amendment) Rules, 2017.
    (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income-tax Rules, 1962 (hereafter referred to as the principal rules), after rule 21AC, the following rule shall be inserted, namely:-

“21AD. Exercise of option under sub-section (4) of section 115BA. (1) The option to be exercised in accordance with the provisions of sub-section (4) of section 115BA by a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2017, shall be in Form No. 10-IB.

(2) The option in Form No. 10-IB referred to in sub-rule (1) shall be furnished electronically either under digital signature or electronic verification code.

(3) The Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems), as the case may be, shall‑

(i) specify the procedure for filing of Form referred to in sub-rule (2);

(ii) specify the data structure, standards and manner of generation of electronic verification code, referred to in sub-rule(2), for purpose of verification of the person furnishing the form referred to in the said sub- rule; and

(iii) be responsible for formulating and implementing appropriate security, archival and retrieval policies in relation to Form so furnished.”;

3. In the principal rules, after Form No. 10-IA, the following Form shall be inserted, namely:‑

“FORM No. 10-IB

[See sub-rule (1) of rule 21AD]

Application for exercise of option under sub-section (4) of section 115BA of the Income – tax Act, 1961

To,
The Assessing Officer,

Sir/Madam,

I, ………………………………………………. , on behalf of [name and registered address of the company exercising the option under

sub-section (4) of section 115BA] having
Permanent Account Number (PAN)…………………………… ….. do hereby exercise the option referred to in sub-section (4) of section 115BA of the Income-tax Act, 1961 (the Act) for previous year 20…- …… and subsequent years.

2. The details of the company is given below

(i) Name of the Company exercising the option under sub-section (4) of section 115BA :

(ii) Whether it is a Domestic company or not :

(iii) PAN :

(iv) Registered Address :

(v) Date of Incorporation :

(vi) Nature of business or activities of the Company:

3. I understand that the above option once exercised for any previous year, cannot be subsequently withdrawn for
the same or any other previous year.

4. I do hereby further affirm that the conditions stipulated in section 115BA of the Act are and shall be satisfied by
the aforesaid company.

Place:
Date:

Yours faithfully,

Signature of Principal Officer……………………………..

Name……………………………………

Designation ………………………….

Address………………………………..

Note 1:

1. This option form should be signed by the principal officer.”

[Notification No. 36/2017/F. No. 370142/7/2017-TPL]

NIRAJ KUMAR, Under Secy. (Tax Policy and Legislation)

Note 2: The principal rules were published in the Gazette of India Extraordinary, Part III, section 3, sub-section (i), vide notification number S.O. 969(E), dated the, 26th March, 1962 and were last amended vide notification number G.S.R. 399(E) dated the 21st April, 2017