Section 115BAA → Section 115
Tax on income of certain domestic companies (22% Regime)
Quick Answer
Section 115BAA of the Income Tax Act, 1961 (Tax on income of certain domestic companies (22% Regime)) corresponds to Section 115 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 115BAA
Under the Income Tax Act, 1961, Section 115BAA governs tax on income of certain domestic companies (22% regime). Allows domestic companies to pay tax at a reduced flat rate of 22% (plus surcharge/cess) if they forego specified deductions and exemptions (like SEZ, additional depreciation).
From 1st April 2026, the same subject sits at Section 115 of the Income-tax Act, 2025 — retained and renumbered as Section 115 of the Income-tax Act, 2025. Retained and declared as the absolute Default Regime for all domestic companies. The old 30% rate is practically obsolete.
For Section 115BAA, the practical impact is rated Critical. The baseline of Indian Corporate Taxation.
Sec 115BAA
Provision Summary
Allows domestic companies to pay tax at a reduced flat rate of 22% (plus surcharge/cess) if they forego specified deductions and exemptions (like SEZ, additional depreciation).
Sec 115
Provision Summary
Retained and declared as the absolute Default Regime for all domestic companies. The old 30% rate is practically obsolete.
Key Changes & Highlights
- Companies no longer need to file a separate form (Form 10-IC) to opt-in; the 22% rate is applied automatically by the portal.
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Frequently Asked Questions
What is Section 115BAA of the Income Tax Act, 1961 about?
Section 115BAA of the Income Tax Act, 1961 covers tax on income of certain domestic companies (22% regime). Allows domestic companies to pay tax at a reduced flat rate of 22% (plus surcharge/cess) if they forego specified deductions and exemptions (like SEZ, additional depreciation).
Which section replaces Section 115BAA in the Income-tax Act, 2025?
Section 115BAA of the Income Tax Act, 1961 maps to Section 115 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained and declared as the absolute Default Regime for all domestic companies. The old 30% rate is practically obsolete.
What is the impact of the change to Section 115BAA under the new tax code?
The transition impact for Section 115BAA is rated Critical. The baseline of Indian Corporate Taxation.
What should I watch out for when Section 115BAA moves to the 2025 code?
Companies no longer need to file a separate form (Form 10-IC) to opt-in; the 22% rate is applied automatically by the portal. These points are specific to Section 115BAA (Tax on income of certain domestic companies (22% Regime)).
Disclaimer: This mapping of Section 115BAA (Tax on income of certain domestic companies (22% Regime)) to Section 115 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 115BAA is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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