Suppose a new manufacturing company is incorporated in Jan 21 and the setup phase (building construction and machinery installation) goes on till Dec 2023 and the company starts production in Jan 2024 and it wants to avail 115 BAB benefit. Now till this time i.e. till Jan 2024, the company must have already filed three income tax returns (for FY 20-21, FY 21-22 and FY 22-23) of NIL income since it had not started production during this period. Now if the company opts for 115BAB by filling Form 10-ID while filing its fourth ITR i.e. for FY 23-24, then would the company be eligible for availing 115BAB since it opted for 115BAB while filing its first ITR after the start of production when the income starts getting generated.
Or will the company become ineligible for availing 115BAB because it did not choose 115BAB option while filing its first ITR even though it was of NIL income?
In other words, for availing 115BAB, is it mandatory for the companies to choose 115BAB option while filing its very first ITR even though it is of NIL income, or is it okay if the company chooses the 115BAB while filing the very first ITR after the start of production when the actual income starts getting generated? Please clarify.
CAclubindia
