/ Tax Election Checklist · Updated 2026-10-22
Form 10-IC Section 115BAA Election Checklist India 2026 - BQP, 22% tax regime one-time irrevocable opt-in.
Form 10-IC election to opt into Section 115BAA (22% concessional corporate tax regime) is a one-time irrevocable choice. Filed with first ITR of the FY of election. Forfeits specific deductions (SEZ 10AA, Chapter VI-A except 80JJAA/80M, additional depreciation, scientific research). Must verify tax impact modelling before opt-in. Here's the complete 2026 checklist.
DC
Written by CA Durgesh Chavda
Chartered Accountant (ICAI) · Founder, Bharat Quantum Prospera · US incorporation, India-US DTAA, FEMA ODI, NRI taxation, cross-border structuring · LinkedIn
/ When Form 10-IC should be filed
The core rule.
- Any Indian domestic company can opt into Section 115BAA via Form 10-IC with Indian ITR of the FY of election.
- Timing: filed on or before due date for ITR filing of the FY in which election is desired. For AY 2026-27 (FY 2025-26): 31 October 2026 (standard) / 30 November 2026 (TP cases).
- Effective: from the FY of election onwards + all future FYs. Irrevocable.
- Rate: 22% + 10% surcharge + 4% cess = effective 25.17%. No MAT applies.
/ Forfeited deductions under 115BAA
What you give up.
- Section 10AA (SEZ unit deduction).
- Section 32(1)(iia) (additional depreciation 20% in year 1).
- Section 32AD (investment allowance).
- Section 33AB (Tea / Coffee / Rubber Development Account).
- Section 33ABA (Site Restoration Fund).
- Section 35(1)(ii) / (iia) / (iii) (scientific research donations).
- Section 35(2AA) / (2AB) (in-house R&D).
- Section 35AD (investment-linked deduction).
- Section 35CCC / 35CCD (agricultural extension / skill development).
- Chapter VI-A deductions EXCEPT Section 80JJAA (new employment) and Section 80M (inter-corporate dividend).
- Carry-forward of losses attributable to above forfeited deductions.
/ When 115BAA is NOT right
Where to retain standard regime.
- Significant SEZ Section 10AA deduction active (SEZ-based company with 10AA years remaining).
- Large Section 35(2AB) in-house R&D deduction (deep-tech / pharma / biotech with substantial approved R&D).
- Large carry-forward losses attributable to forfeited deductions (would be lost on opt-in).
- Research-driven pharma / biotech with specific scientific research deductions.
- Specific sectoral deductions planned (shipping Section 115VX, hotel Section 80ID, specific business under Section 35AD).
/ Decision modelling checklist
What to verify before filing.
- Current FY expected net profit + tax at standard regime (25% / 22% / 30% depending on turnover).
- 5-year projection of profit growth + tax under both regimes.
- Current forfeited-deduction value: SEZ 10AA, additional depreciation, scientific research, Chapter VI-A.
- Carry-forward losses attributable to forfeited deductions (would be lost).
- Decision: 115BAA vs standard. Typically 115BAA wins for most mature profitable companies without SEZ / R&D intensity.
- If 115BAA chosen: file Form 10-IC with ITR of FY of election.
- Decision is irrevocable - verify before filing.
Last updated: 2026-10-22.
/ Ready when you are
Opting into Section 115BAA? Form 10-IC with ITR deadline.
Decision modelling: forfeited deductions + 5-year projection + irrevocability. BQP + Form 10-IC filing with ITR.
FAQ
Common questions, answered.
When is Form 10-IC filed?
With Indian ITR of the FY in which 115BAA election is desired. For AY 2026-27 (FY 2025-26): with ITR by 31 October 2026 (standard) or 30 November 2026 (TP cases). Form 10-IC + Form 3CA/3CB tax audit + ITR as a package.
Is Section 115BAA election irrevocable?
Yes - once Form 10-IC is filed, decision is permanent. Company remains in 22% + 10% surcharge + 4% cess regime for all future FYs (subject to meeting ongoing conditions). No reversion to standard regime possible.
Should every Indian company opt into 115BAA?
Most mature profitable companies - yes. 22% effective ~25.17% vs standard 25% / 22% / 30% + MAT. For companies with substantial SEZ / scientific research / large carry-forward losses - standard regime may be better. Decision modelling required.
What's the difference between 115BAA and 115BAB?
115BAA: 22% for any Indian domestic company. 115BAB: 15% for NEW manufacturing company (post Oct 2019 incorporation + commencing production by extended date + pure manufacturing). Both forfeit similar deductions. 115BAB more restrictive but lower rate.
Can new manufacturing company choose 115BAB and later switch to 115BAA?
No - both are irrevocable one-time elections. 115BAB election via Form 10-ID; 115BAA via Form 10-IC. Choose carefully. If 115BAB chosen but conditions not met in subsequent year, may fall back to standard regime (not 115BAA).
Does BQP handle 115BAA opt-in modelling + Form 10-IC filing?
Yes - standard scope. 5-year tax projection under standard vs 115BAA vs 115BAB (where applicable), forfeited-deduction impact assessment, carry-forward loss analysis, Form 10-IC drafting + filing. Standard engagement for medium + large Indian companies. WhatsApp +91 78018 87130.
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