Form 10-ID : Format & How to Fill Income Tax Form 10-ID

As per income tax rules, the domestic companies should file Form 10-ID to exercise the option as per Section 115BAB. The Form 10-ID should be submitted before the due date of filing the income tax return specified in the Income Tax Act of the financial year commencing on or after 1st April 2020. By filing Form 10-ID, the domestic company can pay income tax at reduced rates of 15% (plus surcharge and cess), subject to fulfilling specified conditions.

What is Form 10-ID?

Introduced in 2020, Form 10-ID allows eligible domestic manufacturing companies to opt for a reduced corporate tax rate of 15% (plus surcharge and cess) under Section 115BAB of the Income Tax Act. This is significantly lower than the standard rate of 30%, making it a game-changer for newly established manufacturing companies.

Who can File Form 10-ID?

Not every company qualifies. To be eligible, you must:

• Be a domestic company incorporated on or after October 1, 2019.
• Have commenced manufacturing or production of goods on or before March 31, 2024.
• Not be formed by splitting up or reconstructing an existing business.
• The company does not use any machinery or plant previously used for any purpose, except for imported machinery or plants that have not been used in India before.
• Company  does not use any building previously used as a hotel or a convention centre
• The total income of the company should be computed without claiming any deduction under Chapter VI-A (except section 80JJAA & 80M) or section 10AA related to SEZ.
• Meet all the conditions stipulated in Section 115BAB.

What is the Tax Rate under section 115BAB?

The effective tax rate for the domestic company that opted for section 115BAB is 17.16%. The base tax rate is 15% plus a 10% surcharge and a 4% cess.

Key Points about Form 10-ID

• Filing Form 10-ID is optional. You can choose to take advantage of the lower tax rate or stick to the standard rate.
• Once you exercise the option, it applies to subsequent assessment years and cannot be withdrawn.
• You must submit the form electronically through the Income Tax e-filing portal before the due date for filing your income tax return.
• Ensure you have a valid Digital Signature Certificate for online submission.

How to Submit Form 10-ID?

Form 10-ID should be submitted electronically via the income tax e-filing portal. Login to your e-filing account and follow the below steps:

• Go to E-file > Income Tax Forms > File Income Tax Forms. 
• Select ‘Application for the exercise of option under Section 115BAB(7) of the Income Tax Act, 1961 (Form No. 10-ID)’.
• Select the relevant assessment year and continue to start filling out the application.

Steps to Fill Form 10-ID

There are broadly three sections of Form 10-ID

• In the first section, confirm the details of the assessing officer.
• In the next section, basic information needs to be filled.
• In the final section, fill out the self-declaration form containing criteria as per Section 115BAB of the Income Tax Act. Select the check box and agree to the terms and conditions displayed on the Verification page.
• After verification, preview all the details filled in.
• Verify the details and proceed to e-verify. 
• You can e-verify using a Digital Signature Certificate.
• After successful e-verification, the Form 10-ID will be successfully submitted to the income tax department.

Tax Rate for Income from Other than Manufacturing Activities

Companies opting under this section 115BAB shall be required to pay tax at the rate of 22% on the income which has not been derived or incidental to the manufacturing or production of article or thing and no deduction or allowance shall be allowed on such income.

Related Articles

1. How to E-file ITR?
2. Section 115BAA : Tax rate for Domestic Companies