Section-200: Tax on income of certain domestic companies

Section-200 : Tax on income of certain domestic companies

Section-200 provides for the (optional) concessional tax rate applicable to companies other than those covered under clauses 199 and 201, if they do not claim specific deductions. The said clause further provides for the manner of opting, method of computing the income and also implications for Unit in the International Financial Services Centre. Learn to understand the section-200 as it is, it's help and useful links to follow.

Here onwards, "Act" refers to "Income Tax Act 2025"

1. Section-200 as per act

Irrespective of anything contained in this Act but subject to the provisions of Parts A, B and this Part, other than sections 199 and 201, the income-tax payable for a tax year shall be at the rate of 22%, at the option of a person being a domestic company, in respect of the total income of such person computed in the following manner:––
1. without any deduction under––
  1. sections 45(2)(c) and 47(1)(b); or
  2. Chapter VIII other than the provisions of section 146; or
  3. sections specified in section 205(1)(a) to (g);
2. without set off of any loss carried forward or depreciation from any earlier tax year, if such loss or depreciation is attributable to any of the deductions referred to in clause (a);
3. without set off of any loss or allowance for unabsorbed depreciation deemed so under section 116(1), if such loss or depreciation is attributable to any of the deductions referred to in clause (a).
Where the person fails to satisfy the requirements contained in sub-section (1) in any tax year, the option shall become invalid in respect of the said tax year and subsequent years and other provisions of the Act shall apply, as if the option had not been exercised for such tax year and for subsequent years.
The loss and depreciation referred to in sub-section (1)(b) and (c) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year.
In case of a person, having a Unit in the International Financial Services Centre, which has exercised option under sub-section (5), the requirements contained in sub-section (1) shall be modified to the extent that the deduction under the said section shall be available to such Unit subject to fulfilment of the conditions contained in that section.
The provisions of this section shall not apply unless the option is exercised by the person in the such manner as prescribed on or before the due date specified under section 263(1) for furnishing the return of income and such option once exercised, shall apply to subsequent tax years.
Once the option under this section has been exercised for any tax year, it shall not be subsequently withdrawn for the same or any other tax year.
In case of a person, being a domestic company, where the option exercised by it under section 201, has been rendered invalid due to violation of the conditions contained in section 205(2)(b) or (c) or (d), such person may exercise the option under this section.