The Central Board of Direct Taxes (CBDT) has issued Circular No. 17/2024, dated 29th June 2024, providing significant relief to taxpayers who faced delays in filing crucial income tax forms—Form 10-IC and Form 10-ID. This circular offers a framework for condoning delays in submitting these forms, which are essential for claiming the beneficial tax rates under sections 115BAA and 115BAB of the Income Tax Act, 1961. This move aims to mitigate the hardships faced by taxpayers during Assessment Years (AYs) 2020-21 to 2023-24.
What are Form 10-IC and Form 10-ID?
- Form 10-IC: This form is used by domestic companies to opt for the concessional tax rate of 22% under Section 115BAA of the Income Tax Act, 1961.
- Form 10-ID: This form allows new manufacturing domestic companies to choose the lower tax rate of 15% under Section 115BAB.
Key Provisions of CBDT Circular 17/2024
- Scope of Condonation:
- The circular covers delays in filing Forms 10-IC and 10-ID for AYs 2020-21 to 2023-24.
- Taxpayers who failed to file these forms within the due date specified under section 139(1) can now seek condonation.
- Process for Condonation:
- Taxpayers must submit a formal application to the jurisdictional Principal Commissioner or Commissioner of Income Tax (CIT).
- The application should include valid reasons for the delay and supporting documentation.
- Conditions for Approval:
- The condonation will be granted only if the taxpayer demonstrates that the delay was due to genuine hardship or circumstances beyond their control.
- The tax returns for the relevant AYs must have been filed within the stipulated timeline.
- Timeframe for Application:
- Taxpayers are required to apply for condonation within a specified period from the date of the circular (e.g., within six months).
Impact on Taxpayers
This circular provides a significant opportunity for companies that missed the deadlines for opting into concessional tax regimes due to administrative or procedural lapses. Without this condonation, companies would have been taxed at higher rates, leading to substantial financial implications.
How to Apply for Condonation of Delay?
- Prepare Application: Draft a condonation request letter explaining the reasons for the delay and attach supporting documents.
- Submission: Submit the application to the jurisdictional CIT/PCIT.
- Verification: The tax authorities will review the application, and if satisfied, condonation will be granted.
Comparison of Tax Rates Under Sections 115BAA and 115BAB
| Parameter | Section 115BAA | Section 115BAB |
|---|---|---|
| Applicable Form | Form 10-IC | Form 10-ID |
| Tax Rate | 22% (plus surcharge and cess) | 15% (plus surcharge and cess) |
| Applicability | All domestic companies | New manufacturing domestic companies |
| Conditions | Companies should not claim specified deductions | Should commence production by a specified date |
| Deadline for Filing | On or before the due date of ITR | On or before the due date of ITR |
The issuance of CBDT Circular 17/2024 is a welcome relief for taxpayers who faced challenges in timely filing Forms 10-IC and 10-ID. By allowing condonation of delay, the CBDT ensures that genuine cases are not penalized due to procedural lapses. Companies should take immediate action to assess their eligibility for condonation and submit applications within the stipulated timeframe to benefit from the concessional tax regimes.
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