Addressing the 37th GST Council meet today in Goa, Union Finance Minister Nirmala Sitharaman proposes to reduce the corporate tax for domestic companies, new local manufacturing companies via an ordinance.
In the midst of the slowing economy, the minister announced a series of tax exemptions at the GST Council Meet on Friday.
Adding fuel to the fiscal, the centre diced the corporate tax to 25.17 percent inclusive of all cess and surcharges for domestic companies.
The new tax rate will come into effect from the current fiscal which began on April 1, said Finance Minister Nirmala Sitharaman while making the announcement.
“We today propose to slash the corporate tax rate for domestic companies and for new domestic manufacturing companies” said the finance minister at the meeting.
The revenue burden on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually, she said.
“Tax concessions will bring investments in Make in India, boost employment and economic activity, leading to more revenue,” the finance minister said in Goa.
After coming into effect, the corporate tax rate will be 22 percent for domestic companies, if they do not claim any incentive or concession.
Companies choosing 22 percent income tax slab are not required to pay minimum alternate tax (MAT), added minister.
New domestic manufacturing companies operational after October 1, can pay income tax at a rate of 15 percent without any incentives, she added.
Nirmala Sitharaman added, companies can opt for lesser tax rate after the expiry of tax holidays and concessions that they are availing now.
