Section 115BAA → Section 115
Tax on income of certain domestic companies (22% Regime)
Quick Answer
Section 115BAA of the Income Tax Act, 1961 (Tax on income of certain domestic companies (22% Regime)) corresponds to Section 115 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective 1st April 2026. Status: Retained.
Sec 115BAA
Provision Summary
Allows domestic companies to pay tax at a reduced flat rate of 22% (plus surcharge/cess) if they forego specified deductions and exemptions (like SEZ, additional depreciation).
Sec 115
Provision Summary
Retained and declared as the absolute Default Regime for all domestic companies. The old 30% rate is practically obsolete.
Key Changes & Highlights
- Companies no longer need to file a separate form (Form 10-IC) to opt-in; the 22% rate is applied automatically by the portal.
Related Sections
Related Articles from the Tax Academy
corporate compliance
Section 115BAA vs 115BAB: A 2026 Corporate Tax Guide
Expert CA analysis on choosing the right corporate tax regime in 2026. Compare tax rates, MAT, and deductions under Section 115BAA vs 115BAB vs the standard slab.
old vs new scheme
Corporate Tax Slabs 2026: Old Rates vs New 22% Regime (Sec 115BAA)
A professional guide for corporations on transitioning from the old tax slab to the new 22% rate under Section 115BAA for FY 2025-26. Analysis includes MAT impact and break-even points.
Frequently Asked Questions
What does Section 115BAA of the Income Tax Act 1961 deal with?
Section 115BAA (Tax on income of certain domestic companies (22% Regime)) Allows domestic companies to pay tax at a reduced flat rate of 22% (plus surcharge/cess) if they forego specified deductions and exemptions (like SEZ, additional depreciation).
What is the new section number for Section 115BAA under the Direct Tax Code 2025?
Section 115BAA of the ITA 1961 maps to Section 115 of the Direct Tax Code 2025 (Income-tax Act, 2025), effective from 1st April 2026.
What is the status of Section 115BAA under the new tax code?
Section 115BAA is marked as "Retained" with status "Modified". Impact: Critical - The baseline of Indian Corporate Taxation.
What are the key changes to Section 115BAA under DTC 2025?
Companies no longer need to file a separate form (Form 10-IC) to opt-in; the 22% rate is applied automatically by the portal.
Disclaimer: This page is for educational and reference purposes only. Section mappings are based on publicly available drafts and circulars. Always consult a qualified Chartered Accountant before filing or making compliance decisions under the Direct Tax Code 2025.
Need professional help on Section 115BAA?
Compare trusted providers — both offer DTC 2025-ready CA services.
*Affiliate links — we may earn a small commission at no extra cost to you. Disclosure.
Want to calculate tax on this section?