At a press conference in Goa, Finance Minister Nirmala Sitharaman has announced slashing of corporate tax rates for existing domestic, as well as new domestic manufacturing companies.
All the measures undertaken today will result in a loss of Rs 1.45 lakh crore per year.
The corporate tax rate is going to be slashed to 22 percent if exemptions are not availed. This gives companies an effective tax rate of 25.17 percent, inclusive of all surcharges and cess. The Minimum Alternate Tax (MAT), too, will not be paid by these companies.
Nirmala Sitharaman press conference LIVE: Govt to forego Rs 1.45 lakh cr/year on reduction in corp tax, other measures
Any new domestic company incorporated on or after October 1, making fresh investments in manufacturing, will be allowed to pay a tax rate of 15 percent if the companies do not avail any exemptions. Also, the companies need to commence production before March 31, 2023. Effective tax rates for these companies will be 17.01 percent.
Companies that do not opt for the concessional tax regime and avail exemptions will have to continue to pay the pre-amended tax rates, Sitharaman also said. Such companies can, however, avail of the new tax regime after the expiry of their tax holiday.
News Source: Moneycontrol