Corporate tax rates slashed to 22% for domestic companies: FM
GOA / NEW DELHI / AGENCIES
The markets have reacted positivly to the relief measures announced by the governme today. The Govt has chosen to spur consumption and investment by giving reliefs in direct taxes (vs GST reliefs expected by different sectors).
The loss in terms of tax revenues will take time to be offset by the higher tax revenues gained on consumption (out of higher dividends/buybacks announced by corporates due to Corporate tax savings) or investments in new facilities by corporates out of their savings.
Finance Minister Nirmala Sithraman today said, a new provision has been ed in the Income-tax Act which allows any domestic company an option to pay income-tax at the rate of 22% if they do not avail any exemption/incentive. It will be effective from the current Financial Year.
Addressing the media ahead of 37th GST council meeting in Goa today, She announced reduction in corporate tax for domestic companies and domestic new manufacturing companies.
Another new provision allows any new domestic company incorporated on or after 1st October 2019 making fresh investment in manufacturing and commences their production on or before 31st March, 2023, will have to pay income-tax at the rate of only 15%. Finance Minister has also announced the government decision to expand the scope of 2 percent CSR spending.
Meanwhile, 37th GST council meeting, headed by Finance Minister Nirmala Sitaraman is underway in Panaji, Goa.
Prime Minister Narendra Modi has hailed the decision to cut corporate tax terming it as historic one. In a tweet, Mr Modi said, it will give a great stimulus to Make In India, attract private investment from across the globe, improve competitiveness of the private sector, create more jobs and result in a win-win for 130 crore Indians.
The Prime Minister said, the announcements in the last few weeks clearly demonstrate that the government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a 5 Trillion dollar economy.
Appreciating the efforts taken by the Finance Minister, Commerce and Industry Minister, Piyush Goyal said that these announcements will give necessary fillip to the economy. He said that government have taken series of measures to boost the economy and today’s measures are the largest one.