SD Ltd., a pharmaceutical company incorporated in year 2000-01, purchased a new plant and machinery for 12 lakhs on 01-04-2023. The total income of…

Computation of tax liability of SD Ltd. for A.Y. 2024-25 under regular provisions of the Act Particulars ₹ Total Income before allowing additional depreciation 22,00,000 Less: Additional Depreciation u/s section 32(1)(iia)[12lakh x 20%] 2,40,000 Total Income 19,60,000 Applicable Tax Rate (since turnover of P.Y. 2021-22 < 400crores) 25% Tax payable 4,90,000 Add: Health & Education cess@4% 19,600 Tax Liability 5,09,600 Computation of tax liability of SD Ltd. for A.Y. 2024-25 under section 115BAA Particulars ₹ Total Income before allowing additional depreciation 22,00,000 Less: Additional Depreciation u/s section 32(1)(iia) [not allowable as deduction while computing income u/s 115BAA] - Total Income 22,00,000 Applicable Tax Rate 22% Tax payable 4,84,000 Add: Surcharge@10% 48,400 5,32,400 Add: Health & Education cess@4% 21,296 Tax Liability 5,53,696 Tax Liability (rounded off) 5,53,700 Since tax payable as per the regular provisions of the Act is lower than the tax payable under the provisions of section 115BAA, it would be beneficial for SD Ltd. not to opt for section 115BAA.