Section 201 — Tax on income of new manufacturing domestic companies

(1) Irrespective of anything contained in this Act, but subject to the provisions
of Parts A, B, E and this Part (other than sections 199 and 200) of this Chapter, the
income-tax payable in respect of the total income of an assessee, being a domestic
company, specified in column B of the Table below, shall, at the option of such as-
sessee, be computed at the rates specified in column C, if the conditions contained
in column D thereof are fulfilled.
TABLE
Sl.
No.
Assessee Total income and
rate of tax
Conditions
A B C D
1. A domestic
company
engaged in
business of
manufac-
ture or pro-
duction of
any article
or thing.
( a) 15% on the total in -
come other than the
income mentioned in
clauses ( b), ( c) and
(d);
( b) 22% (without any
deduction or allow -
ance in respect of
any expenditure or
allowance) on such
income,—
(i) which has nei-
ther been de -
rived from nor
is incidental to
manufacturing
or production
of an article or
thing; and
(ii) in respect of
which no spe -
cific rate of
tax has been
provided sep -
arately under
Parts A, B, E
and this Part of
this Chapter;
( c) 22% on short-term
capital gains de -
rived from transfer
of a capital asset on
which no depreci -
ation is allowable
under this Act;
( d) 30% on the income
deemed so under
section 205(4).
Such domestic company—
( a) exercises the option in
the manner provided in
sub-section (2);
( b) has been set-up and reg -
istered on or after the 1st
October, 2019;
( c) has commenced manufac-
turing or production of an
article or thing on or before
the 31st March, 2024;
( d) the total income of which
is computed as per the
provisions of sub-section
(3); and
( e) fulfils all the conditions
provided in sub-section (5)
of this section and section
205(2).
(2) The option under this section shall be exercised by the assessee in the manner
prescribed subject to the following conditions:—
( a) it shall be exercised on or before the due date specified under section
263(1) for furnishing first of the returns of income for any tax year;
( b) such option, once exercised, shall apply to subsequent tax years;
( c) once the option has been exercised for any tax year, it shall not be sub-
sequently withdrawn for the same or any other tax year; and
( d) where the assessee fails to fulfil the conditions contained in sub-section
(1) (Table: Sl. No. 1.D) in any tax year,—
( i) the option shall become invalid in respect of such tax year and
subsequent tax years; and
( ii) the other provisions of this Act shall apply, as if the option had not
been exercised for that tax year and subsequent tax years.
(3) For the purposes of sub-section (1), the total income of the assessee shall be
computed,—
( a) without any deduction under—
( i) section 45(2) or 47(1)(b); or
( ii) Chapter VIII other than section 146 or 148; or
( iii) sections specified in section 205(1)(a) to (g);
( b) without set off of any loss or allowance for unabsorbed depreciation
deemed so under section 116, if such loss or depreciation is attributable
to any of the deductions referred to in clause (a).
(4) While computing the income of the assessee, the loss and depreciation, or both,
as specified in sub-section (3)(b) shall be deemed to have been given full effect to
and no further deduction for such loss or depreciation, or both, shall be allowed
for any subsequent year.
(5) In case of an amalgamation, option under this section shall remain valid in case
of the amalgamated company only and if the conditions contained in sub-section
(1) (Table: Sl. No. 1.D) are continued to be fulfilled by such company.