Explanation
Section 115BAB was introduced by the Taxation Laws (Amendment) Ordinance 2019 to attract manufacturing investment into India. Eligible companies must be incorporated after 1 October 2019, must commence manufacturing before 31 March 2024, and must not be formed by splitting or reconstruction of an existing business. The company must not use any previously used plant and machinery beyond 20% of the total plant and machinery value. The activity must be pure manufacturing — no trading or services. The effective rate is 17.01% after the 10% surcharge and 4% cess on the 15% base rate. MAT does not apply. Deductions under §80IA and similar provisions are not available. The option is exercised via Form 10-ID and, like §115BAA, is permanent — the company cannot revert. Any violation of the conditions results in the option being treated as never having been exercised. Verify on the income-tax portal before filing.