This is a pvt company will go for strike off in next FY due to loss. It has unpaid director loan of 22L that will be waived off by directors. This director loan was used for revenue purpose hence it becomes income for company after waive off. It's found the company is having profit around 18L in FY 25-26 due to loan waiver. The company has 32L brought forward loss in ITR. The company has not adopted 115BAA in ITR filing of previous years. These are some queries I have in this regard. 1) Whether MAT will be applicable for the profit in FY 25-26? 2) Can the company adopt 115BAA while filing FY 25-26 ITR to avoid MAT? 3) What compliance be done for adopting 115BAA and what is the due date? 4) Will there be any income tax liability after adopting 115BAA in ITR of FY 25-26? Looking forward to your reply. Thank you.
MAT applicability:
Yes, MAT may apply if the company does not opt for Sec 115BAA, because MAT is based on book profit, not ITR loss.
Opt for 115BAA:
Yes, the company can opt for Sec 115BAA in FY 2025-26. After opting, MAT will not apply.
Compliance & due date:
File Form 10-IC online before the ITR due date (generally 31 Oct 2026) for AY 2026-27.
Tax liability:
If the ₹32L brought-forward business loss is eligible for set-off, the ₹18L profit will be fully adjusted → tax liability NIL.
Thanks for the reply. It was a food manufacturing business incorporated in 2021. These are some follow up queries in this regard. 1) Whether section 115BAA or 115BAB will be applicable to avoid MAT in this case? (If 115BAB then suggest the corresponding compliance requirement) 2) Whether the form 10-IC gets processed instantly or takes time? 3) Can they ask for any document after filing form 10-IC? 4) Can ITR be filled if 10-IC not processed and takes time?
115BAA will apply, not 115BAB.
115BAB is only for certain new manufacturing domestic companies that satisfy specific conditions and file Form 10-ID for the first eligible year. In your case, since the company has already been filing returns, 115BAA is the practical option.
Form 10-IC does not require a separate approval process.
Once it is filed online and e-verified with DSC, an acknowledgement / transaction ID is generated. So, practically, it is treated as filed immediately.
Normally no document is attached with Form 10-IC.
It is an online statutory form. However, the department may later ask for supporting details during assessment or scrutiny, so keep the computation and eligibility working ready.
ITR should be filed after filing Form 10-IC.
There is no need to wait for separate “processing” of 10-IC. First file and e-verify Form 10-IC, then file the ITR claiming 115BAA. The option must be exercised within the prescribed due date for the return.