Newdelhi20/9/19::Union government has cut the corporate tax from nearly 35 to about 25 per cent for domestic investors.
Addressing Media ahead of 37th GST council meeting in Goa, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said the new domestic manufacturing companies will have to pay 15 per cent tax.
The Minister said a new provision has been ed in the Income-tax Act with effect from Financial Year 2019-20, which allows any domestic company an option to pay income-tax at the rate of 22 per cent if they do not avail any exemption/incentive.
Now, the corporate tax rate for domestic companies shall be 25.17 per cent inclusive of surcharge & cess, which was earlier nearly 35 per cent. Also, such companies shall not be required to pay Minimum Alternate Tax.
Under the new provision a 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 per cent.
Finance Minister has also announced the government decision to expand the scope of 2 per cent CSR spending.
The Minister also expressed confidence that the move is well studied whereby industrial growth and investment which is due to increase with this move will compensate revenue forgone for reduction.
Total revenue foregone for the reduction in corporate tax rate and other relief are estimated to be at 1.45 lakh crore rupees