Form 10-IC – Format, How to Submit Income Tax Form 10-IC & FAQ

Domestic companies should file Form 10-IC to exercise the option as per Section 115BAA of the Income Tax Act. By filing Form 10-IC, the domestic company can pay income tax at reduced rates of 22% (plus surcharge and cess), subject to fulfilling specified conditions. The said form should be submitted before the due date of ITR filing (specified in the Income Tax Act) of the financial year commencing on or after 1st April 2020.  

What is Form 10-IC?

Form 10-IC is the official application for domestic companies that wish to pay tax at a concessional rate of 22% under Section 115BAA of the Income Tax Act, 1961. It enables companies to formally inform the tax authorities of their choice to avail of the concessional tax rate.

Who is Eligible to Submit Form 10-IC?

• Domestic company
• Opting for the concessional tax rate under Section 115BAA: This section allows eligible companies to pay income tax at a reduced rate of 22% (plus applicable surcharge and cess) instead of the regular corporate tax rate.
• Meeting the conditions of Section 115BAA:  These conditions include:
  1. Not claiming deductions or incentives under Chapter VI of the Income Tax Act, except for specific exceptions.
  2. Not claiming tax holidays or benefits under other sections of the Act.
  3. Maintaining prescribed books of accounts.
  4. Filing Form 10-IC within the prescribed time limit, which is usually the due date for filing income tax returns for the relevant assessment year.
  5. There are no limitations on the turnover of a domestic company.
  6. Companies, both newly incorporated and existing companies, may choose to be taxable under Section 115BAA.

Format of Form 10-IC

What is the Tax Rate under 115BAA?

The effective tax rate for the domestic company that opted for section 115BAA is 25.168%.

How to Submit Form 10-IC?

Form 10-IC should be submitted electronically through the income tax e-filing portal. Follow the below steps to log in to your e-filing account:

• Go to e-file > Income Tax Forms > File Income Tax Forms. 
• Search for Form 10-IC and select the option’ Application for the exercise of option under Section 115BAA(5) of the Income Tax Act, 1961 (Form No. 10-IC)’.
• On the next page, select the relevant assessment year and proceed further to start filling out the application.

Steps to Fill Form 10-IC

There are broadly four sections of Form 10-IC.

• In the first section, confirm the details of the assessing officer.
• The second section requires you to enter basic details (including personal information & nature of business activities) of the domestic company. Select Sector as per applicable nature of business. You can also mention the sub-sector. 
• In the next section, mention the details of IFSC units (if any) and the options exercised under Section 115BA. If you had opted for taxation under Section 115BA, you will need to withdraw the same by selecting the check box.
• On the verification page, enter the relevant details and agree to the terms and conditions.
• After filling in all the details, preview all the details filled out and submit.
• Verify and select ‘yes’ to proceed to e-verify. 
• The Form 10-IC should be e-verified using a Digital Signature Certificate
• On successful e-verification, the process of submitting Form 10-IC to the income tax department will be completed.