Company registration for Trading business

Trading
1

Can company opt sec115BAB For Trading Securites?
If not , which section is applicable.

2 Likes
2

@Quicko Can you.

3

@Rehab_Rinu , yes

Moreover @Quicko , what your opinion?

4

Hi @Rehab_Rinu,

As per section 115BAB of the Income Tax Act, the reduced tax rate benefit is available only to manufacturing and production units.
However, u/s 115BAA, of the Income Tax Act, companies can claim the benefit of the reduced base tax rate of 22%.

5

Section 115BAB of the Income Tax Act provides a concessional tax rate for new manufacturing companies and is not applicable to trading businesses, including trading in securities.

For a company engaged in trading securities, Section 115BAB cannot be opted. Instead, such companies are taxed under the regular corporate tax provisions applicable to trading or other non-manufacturing activities.

If you are registering a company for trading business, it will be treated as a regular company under the Companies Act, and income tax will be applicable as per standard corporate tax rates.

Summary

  • Section 115BAB: Only for new manufacturing companies (not trading).

  • Trading company: Taxed under normal corporate tax rules.

  • Company registration: Same process as any private limited or other company under Companies Act.

Get your company registered with online experts such as Setindiabiz, Cleartax, etc.