Short answer: the 15% rate for new manufacturing companies has lapsed. It required manufacturing to commence by 31 March 2024 and the deadline was never extended. Companies that qualified and opted in continue at 15%. A company incorporating now cannot get it, and the practical default is the 22% regime.
What the regime was
Introduced to draw manufacturing investment, the concessional rate applied to a domestic company that:
- was incorporated on or after 1 October 2019;
- commenced manufacturing on or before 31 March 2024; and
- was genuinely new — not formed by splitting up or reconstructing an existing business, and not using previously used plant beyond permitted limits.
It carried a headline rate of 15%, plus surcharge and cess, in exchange for forgoing specified deductions and incentives.
It sits at s.201 of the Income-tax Act, 2025 — the old 115BAB.
The deadline passed
The commencement deadline was extended once, from 31 March 2023 to 31 March 2024. It was not extended again.
There was sustained industry representation for a further extension, and none came. As things stand the window is closed, and renumbering under the 2025 Act did not reopen it — the regime survives in the statute for those already inside it, not as an available election.
This is the answer to the question people are actually searching. A great deal of published material still describes the 15% rate in the present tense without noting that the entry condition can no longer be satisfied. If a projection, a business plan or an investor deck for a plant being commissioned now assumes 15%, it is wrong, and the difference is seven percentage points on every rupee of profit.
Who is unaffected
Companies that commenced manufacturing within the window and validly opted in continue at the concessional rate. The lapse closes the door to new entrants; it does not evict anyone already inside.
Two things matter for those companies:
- The option, once exercised, applies to subsequent years and is generally irrevocable. It cannot be dropped because circumstances changed.
- The conditions continue to apply. Falling foul of them later — on the nature of the business, or on the deductions claimed — can put the concessional treatment at risk in a way that is worth monitoring rather than assuming settled.
What a new plant can claim instead
The realistic default is the general concessional corporate regime at 22% plus surcharge and cess — s.200 of the 2025 Act, the old 115BAA — available to domestic companies that forgo specified deductions and incentives.
It is not manufacturing-specific and it is not 15%, but it is available, and for most new manufacturers it is now the comparison to run.
| Regime | 2025 Act | Rate | Status |
|---|---|---|---|
| New manufacturing companies | s.201 | 15% | Closed — commencement deadline 31 Mar 2024 |
| Domestic companies generally | s.200 | 22% | Available |
| Older manufacturing regime | s.199 | 25% | Largely superseded |
The election is not a percentage comparison
The mistake worth avoiding is choosing on the headline rate.
These regimes are conditional on forgoing specified deductions and incentives, and the option is irrevocable for subsequent years. A company carrying substantial unabsorbed depreciation, or with access to incentive-linked deductions, can end up worse off under the lower headline rate — and cannot reverse the choice when that becomes apparent.
The comparison has to be run on projected numbers over several years, before the election is made. It is one of the few decisions in corporate tax that genuinely cannot be revisited.
Beyond the rate
For a new plant the rate is not the whole picture, and the remaining levers are mostly elsewhere:
- State industrial incentives — capital subsidy, power tariff, stamp duty relief — which are negotiated at the investment stage and vary by state and location.
- Depreciation, including the treatment of plant additions and the timing of commissioning.
- MSME classification, if applicable, which carries its own consequences — including on the paying side, where the 45-day payment rule affects anyone buying from micro and small suppliers.
None of these replaces a seven-point rate differential. All of them are still available, and all are decided early.
This is a working reference, not the statute. For anything you are relying on — and particularly the lapse itself — confirm the current section text directly.