Section 115BAB

Corporate tax rate for new manufacturing companies.

According to Income Tax Act 1961 Government has introduced a new tax regime or say low corporate tax rate for new manufacturing companies a new section 115BAB inserted .

Meaning of Manufacture or Production for section 115BAB

According the provision of section 115BAB above-mentioned conditions that the company should be engaged in the business of manufacture or products.

Firstly, for the purpose of this section, the following activities are expressly excluded from being manufacture or production viz:

1. Mining

2. Software Development.

3. Conversion of marble blocks or similar materials into slabs

4. Printing of books

5. Bottling of gas into cylinders

6. Production of cinematograph films

7. Any other activities as are notified (no such activities have been notified till the date of writing this article)

The word manufacture has been defined in the Income Tax Act 1961 under section 2(29BA) as follows: –

“manufacture”, with its grammatical variations, means a change in a non-living physical object or article or thing, —

(a) resulting in transformation of the object or article or thing into a new and distinct object or article or thing having a different name, character and use; or

(b) bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure;

The word production has not been defined under the Act; however, it would be prudent to derive such meaning from the definition of ’manufacture’.