Dynamite News Govt slashes corporate tax to 25.17 pc for domestic companies
In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
Goa: In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1. Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually.
Provision inserted in IT Act:
A domestic company can pay income tax at 22% if they dont seek any exemption or incentives
Effective Tax Rate 25.17% inclusive of all surcharges and cess for such domestic companies
Such companies also not required to pay Minimum Alternative Tax pic.twitter.com/ojXYzwfXKxAlso Read | Key Highlights of Union Budget 2019-20
— PIB India (@PIB_India) September 20, 2019
This, she said is being done to promote investment and growth. In effect, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.
The changes in the Income Tax Act and Finance Act will be made effective through an ordinance.
BOOST TO INVESTMENT IN MANUFACTURING
New provision in IT Act
Any new domestic company incorporated on or after 1st Oct 2019 making fresh investment in manufacturing has an option to pay tax at 15% if not seeking incentives and commence production before 31st Mar 2023 pic.twitter.com/OrQXnIsnicAlso Read | Facilitate tax payers by explaining the law, Nirmala Sitharaman advises IRS officers
— PIB India (@PIB_India) September 20, 2019
The minister also said companies opting for 22 per cent income tax slab would not have to pay minimum alternative tax (MAT). Sitharaman further said, new domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives.
Meaning, effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess. Sitharaman further said companies can opt for lower tax rate after expiry of tax holidays and concessions that they are availing now.(PTI)