Concessional Tax Regime Advisor — Companies & Co-operatives
Find the right section (115BAA / 115BAB / 115BAD / 115BAE), the form to file, the due date and the lock-in rules — and compare the normal vs concessional tax.
The concessional company and co-operative regimes, in plain English
Unlike individuals, a domestic company or a resident co-operative society is not automatically placed in a new default regime. Its income is taxed under the normal provisions — 25% or 30% for companies, or the 10%/20%/30% slab for co-operatives, plus surcharge, cess and (importantly) Minimum Alternate Tax or Alternate Minimum Tax. A concessional flat rate is available only if the assessee positively opts in by filing the prescribed form. Four sections offer this:
| Section | Who | Rate* | Form (Rule) | The catch |
|---|---|---|---|---|
| 115BAA | Any domestic company (new or existing) | 22% → 25.17% effective | 10-IC (21AE) | Give up specified deductions/incentives; MAT ceases; irreversible |
| 115BAB | New domestic manufacturing company | 15% → 17.16% effective | 10-ID (21AF) | Incorporated on/after 1 Oct 2019 and manufacturing began on/before 31 Mar 2024; first year only; irreversible |
| 115BAD | Any resident co-operative society | 22% → 25.17% effective | 10-IF (21AH) | Give up specified deductions; AMT ceases; irreversible |
| 115BAE | New manufacturing co-operative society | 15% → 17.16% effective | 10-IFA (21AHA) | Set up on/after 1 Apr 2023 and manufacturing began on/before 31 Mar 2024; first year only; irreversible |
*Effective rate includes the flat 10% surcharge and 4% health and education cess. Income of a 115BAB/115BAE assessee that is not from manufacturing is generally taxed at 22%, and certain excess profits from related-party arrangements at 30%.
What you give up in exchange for the lower rate
The lower rate is not free. An assessee opting into any of these sections must compute income without a long list of incentives — additional depreciation under 32(1)(iia), the SEZ deduction under 10AA, investment-linked deductions such as 35AD, and most Chapter VI-A incentive deductions (80-IA, 80-IB and similar), though 80JJAA and, for companies, 80M generally survive. Brought-forward losses attributable to those incentives cannot be set off. In return, MAT (section 115JB) or AMT (section 115JC) no longer applies, and any unused MAT/AMT credit lapses.
The one-way door: these options are irreversible
This is the single most important point. Once you exercise the option, you cannot withdraw it — for that year or any later year. A company that opts into 115BAA is locked into 22% for all future years; it cannot drift back to the 30% normal regime to use a fresh incentive later. The same is true for co-operatives under 115BAD, and for the 15% manufacturing regimes under 115BAB and 115BAE. Because the decision is permanent, it should be modelled over several years, not just the first — the comparison tool above is a starting point, not a substitute for a multi-year projection.
You also do not re-file the form each year. The form is filed once, in the first year of opting; in every later year you simply file the return under that section. 115BAA can be opted into in any assessment year by an existing company. 115BAB, 115BAD and 115BAE must be opted into in the first return the assessee files under the option, on or before the due date.
The manufacturing sunset: 115BAB and 115BAE are effectively closed
Both 15% manufacturing regimes carry a hard cut-off: manufacturing or production had to commence on or before 31 March 2024 (and the company incorporated on/after 1 October 2019, or the co-operative set up on/after 1 April 2023). This date was extended once, from 31 March 2023 to 31 March 2024, but has not been extended again by the Finance Act 2025. As a result, a genuinely new company or co-operative can no longer newly qualify for 115BAB or 115BAE — the window has closed. These sections now matter only to entities that met the commencement deadline and are still filing their first eligible return, or that opted in earlier and continue. Everyone else who wants a concessional rate uses 115BAA (companies) or 115BAD (co-operatives) at 22%.
The deadline trap
The form must be filed on or before the section 139(1) due date, with (or before) the return. A form filed after the due date — or a belated return — makes the option invalid for that year. For AY 2026-27 the standard due dates are 31 October 2026 for audit cases (which covers almost all companies), 30 November 2026 for transfer-pricing cases, and 31 July 2026 for the rare non-audit case, all subject to any CBDT extension. Missing the date does not merely delay the benefit; for the first year it can deny the concessional rate entirely.
Frequently asked questions
Which form do I file for each section?
Form 10-IC for section 115BAA (domestic companies, Rule 21AE), Form 10-ID for section 115BAB (new manufacturing companies, Rule 21AF), Form 10-IF for section 115BAD (resident co-operative societies, Rule 21AH), and Form 10-IFA for section 115BAE (new manufacturing co-operative societies, Rule 21AHA). Each is filed electronically on the income-tax e-filing portal.
Can section 115BAA be chosen in any year, or only the first?
Section 115BAA (Form 10-IC) can be exercised by an existing domestic company in any assessment year, on or before that year’s section 139(1) due date. Sections 115BAB, 115BAD and 115BAE, by contrast, must be opted into in the first return filed under the option. In every case the option, once made, is irreversible.
Is the option reversible if the concessional regime later becomes unfavourable?
No. Once exercised, the option under 115BAA, 115BAB, 115BAD or 115BAE cannot be withdrawn for that or any subsequent year. This is why the decision should be evaluated over a multi-year horizon rather than on the first year’s numbers alone.
Do I have to file the form every year?
No. The form is filed once, in the first year you opt in. For all later years you simply file the return under that section; there is no annual re-filing. Filing the form again is unnecessary and can create confusion.
Is section 115BAB still open for a new manufacturing company?
Only in limited cases. The law requires manufacturing to have commenced on or before 31 March 2024. That date was not extended by the Finance Act 2025, so a company that starts manufacturing now cannot qualify. 115BAB remains relevant only to companies that met the commencement deadline and are filing their first eligible return, or that opted in earlier. A new company seeking a concessional rate would use 115BAA at 22%.
Does MAT or AMT still apply after opting in?
No. A company opting into 115BAA or 115BAB is not liable to Minimum Alternate Tax under section 115JB, and a co-operative society opting into 115BAD or 115BAE is not liable to Alternate Minimum Tax under section 115JC. Any unused MAT or AMT credit lapses on opting in.
What deductions and incentives do I give up?
Broadly the incentive deductions: additional depreciation (32(1)(iia)), SEZ deduction (10AA), investment-linked deductions (33AB, 35AD, 35(2AA) and similar) and most Chapter VI-A profit-linked deductions such as 80-IA and 80-IB. Employment-linked deduction 80JJAA, and 80M for companies, generally continue. Losses and depreciation attributable to the disallowed items cannot be carried forward or set off.
What is the difference between 115BAD and 115BAE for a co-operative?
115BAD is the general 22% concessional regime open to any resident co-operative society (from AY 2021-22). 115BAE is a narrower 15% regime only for new manufacturing co-operatives set up on or after 1 April 2023 that began manufacturing on or before 31 March 2024. Because of that commencement cut-off, 115BAE is effectively closed to co-operatives set up now; most co-operatives choosing a concessional rate use 115BAD.
What is the due date to file the form for AY 2026-27?
On or before the section 139(1) due date for the return — 31 October 2026 for audit cases (most companies and audited co-operatives), 30 November 2026 for transfer-pricing cases, and 31 July 2026 for non-audit cases, subject to any CBDT extension. A form or return filed after the due date makes a first-year option invalid.
Do the Income-tax Act 2025 changes affect these concessional regimes?
Under the Income-tax Act 2025 the concessional regimes are renumbered: 115BAA becomes Section 200, 115BAB Section 201, 115BAD Section 203 and 115BAE Section 204. The option forms (10-IC, 10-ID, 10-IF, 10-IFA) continue and are re-notified under the Income-tax Rules 2026 (confirm the new form numbers on the portal). These apply from the tax year 2026-27; your FY 2025-26 return, filed in 2026, still uses the existing sections and forms. The rates, conditions and irreversibility are unchanged.