Sept. 20/2019 – In a bid to strengthen manufacturing, the Indian Government decided to reduce the corporate tax from the current 25.17% to 22% including all kinds of cess and surcharges for domestic firms.
Finance Minister Nirmala Sitharaman also announced that the new manufacturing companies to be set up after October 1 would get tax benefit. They have to pay 15% instead of the effective rate 17.01%. The new tax rate will come into effect from the ongoing financial year started on April 1.
A new provision gets added in the Income Tax Act and Finance Act effective from the beginning of 2019-20 financial year under which a domestic company has to pay 22% income tax provided it cannot not receive any incentive or exemptions. The changes in the Act will be made through an ordinance.
The move would incur a decline of revenue collection about Rs 1.45 lakh crore a year. Still the government is interested to impose the new provision with an aim to promote investment and growth, Sitharaman added.