The Statutory Brief

IT Act 1961 → 2025 / Section 115BAA

Tax rates & regime

Section 115BAA → Section 200

Concessional 22% tax rate option for domestic companies

Section 115BAA of the old Income-tax Act, 1961 · new section 200 under the Income-tax Act, 2025

New reference Section 200 (115BAB → 201)

Income-tax Act, 1961Section 115BAA

  • 22% (plus 10% surcharge and cess) for domestic companies giving up specified deductions
  • No MAT
  • Option irrevocable once exercised
  • 115BAB: 15% for new manufacturing companies

Applies to FY 2025-26 (AY 2026-27) and earlier years.

Income-tax Act, 2025Section 200 (115BAB → 201)

  • Same option, now section 200
  • 22% without specified deductions/incentives
  • Option to be exercised by the return due date; cannot be withdrawn
  • New manufacturing companies (old 115BAB) are section 201

Applies from tax year 2026-27 (from 1 April 2026).

What changed

Renumbered; rate and conditions unchanged.

Practice notes

  • Companies that opted under 115BAA continue under section 200 without a fresh option.
  • Surcharge and cess are in the Finance Act for the year.

These are summaries, not the statutory text. Read the bare Act for both sections on the Income Tax Department's official site, which also has a side-by-side comparison utility.

Frequently asked

What is the corporate tax rate under section 200 of the new Income Tax Act 2025?

22% for domestic companies that opt for section 200 (old 115BAA) and forgo specified deductions; surcharge and cess are extra.

What is section 115BAA called in the new Income-tax Act, 2025?

Section 115BAA of the Income-tax Act, 1961 corresponds to Section 200 (115BAB → 201) of the Income-tax Act, 2025, which applies from 1 April 2026 (tax year 2026-27).

What changed in section 115BAA under the new Income Tax Act?

Renumbered; rate and conditions unchanged.

Is section 115BAA still applicable for FY 2025-26?

Yes. Income of FY 2025-26 (AY 2026-27) and earlier years is governed by section 115BAA of the 1961 Act. Section 200 (115BAB → 201) of the 2025 Act applies from tax year 2026-27.

Related sections

115BAC→202New tax regime (default) for individuals, HUFs, AOPs, BOIs and artificial juridical persons43B→37Deductions allowed only on actual payment (taxes, PF, bonus, leave encashment, MSME dues)44AB→63Tax audit of accounts for businesses and professions above turnover limits