In a bold move to reverse the economic downturn and make India an attractive investment destination, Finance Minister Nirmala Sitharaman on Friday Sep 20,2019 slashed corporate tax rates worth ₹1.45 trillion paid by domestic manufacturers, making the country one of the lowest tax regimes in Asia.
Manufacturing companies not availing of tax sops can now opt for a 22% corporate tax rate, while new manufacturing companies that register and start production between 1 October and March 2023 can avail an even lower tax rate of 15%.
At present, business income is taxed at 30%, exclusive of cess and surcharge, other than in the case of companies with sales of up to ₹400 crore and new manufacturing companies which are taxed at 25%.
Now, the effective tax rate, including cess and surcharges, for the existing companies comes down from 34.94% to 25.17%, while for new companies, it falls from 29.12% to 17.01%. Sitharaman also announced a reduction in the rate of minimum alternate tax (MAT) from 18.5% to 15%
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