Form 10-IC

Since April 2020, Indian companies have had the option to pay a reduced income tax rate of 22% annually under Section 115BAA of the Income Tax Act 1961. To take advantage of this lower tax rate the company must fill out and submit Form 10 IC income tax before filing their Income Tax Returns or ITR.

What Is Form 10 IC?

Rule 21AE (1) of the Income Tax Rules allows a domestic company to benefit from lower tax rates by filing Form 10IC. By doing so the company will be charged a 22% tax rate under the Income Tax Act 1961 and will receive all benefits under Section 115BAA. Includes exemption from the Minimum Alternate Tax or MAT of 15%.

Form 10IC must be submitted by the due date for filing the company's ITR for the previous year. Once a company opts for the 22% tax rate under Section 115BAA it cannot revert to the normal tax slab rates in future assessment years.

Who Needs To Fill Out Form 10 IC?

Section 115BAA of the Income Tax Act, 1961 offers a reduced tax rate for domestic companies. Here are the key details:

1. Reduced Tax Rate: Eligible domestic companies can opt to pay income tax at a reduced rate of 22% plus applicable surcharge and cess. This is lower than the regular corporate tax rate.

2. Conditions to Opt: To avail of this reduced tax rate companies must fulfill certain conditions:

• Cannot claim deductions or incentives under Chapter VI of the Income Tax Act except for specific exceptions notified.
• They cannot avail themselves of tax holidays or benefits under other provisions of the Income Tax Act.
• Companies must maintain prescribed books of accounts that accurately reflect their financial position.
• They are required to file 10 IC form to exercise the option under Section 115BAA. This form must be filed within the prescribed time limit, typically by the due date for filing income tax returns for the relevant assessment year.
• There are no restrictions based on turnover for companies opting under Section 115BAA. Both newly incorporated companies and existing companies can choose to be taxable under this section.

What Are The Key Details Required In Form 10 IC?

Form 10IC required under Section 115BAA of the Income Tax Act must include essential details such as the company's name, PAN, address, date of incorporation, financial year end and the option exercised to be taxed under Section 115BAA. It also needs information on the eligibility criteria fulfillment including the maintenance of prescribed books of accounts and compliance with deduction restrictions. Additionally, the form requires the certification of the company's principal officer verifying the accuracy of the information provided. It's essential for companies opting for the concessional tax rate of 22% under Section 115BAA to file Form 10 IC income tax within the specified deadline.

How To Download Form 10 IC?

To access 10 IC form online through the income tax efiling portal follow these steps:

1. Login: Use your credentials to log in to the Income Tax Department portal.

2. Navigate to eFile: Click on eFile in the top menu bar.

3. Select Income Tax Forms: Choose Income Tax Forms from the drop down menu then click on File Income Tax Forms.

4. Choose Form 10IC: Look for Form 10 IC in the list and click on it. This will open the page titled Application for the exercise of option under section 115BAA (5) of the Income Tax Act, 1961.

5. Select Assessment Year: Pick the relevant assessment year from the options provided then click Continue.

6. Download and Submit: Download the form fill it out with the required information and submit it as instructed.

Steps To File Form 10 IC?

Step 1: Form 10 IC has four main sections

• Assessing Officer details
• Basic information about the company
• Additional details like IFSC unit information
• Verification section

Step 2: Fill in details about the Assessing Officer

• Name
• Company's name and address
• Company's PAN card number
• Assessment Year for Sec 115BAA benefits

Step 3: Provide basic information about the company

• Company name
• Domestic or not
• PAN card number
• Registered address
• Date of incorporation
• Nature of business activities

Step 4: Enter additional details if applicable

• Information about units in an International Financial Services Centre or IFSC
• Exercise of option under Sec 115BA(4) in Form 10IB

Step 5: Fill in all required information and agree to the terms and conditions.

Step 6: Review all details by clicking on preview.

Step 7: Click Proceed to everify Form 10 IC and confirm by selecting Yes.

Step 8: Principal Officer digitally signs Form 10 IC to finalize and submit it.
 

Conclusion

Form 10 IC supports eligible businesses with tax incentives, encouraging investment and economic growth through simplified compliance and reduced tax burdens.