Minister Of Finance and Corporate Affairs Smt Nirmala Sitaraman in a press conference in Goa today announced that corporate tax rates has been slashed to 22% for domestic companies and 15% for new domestic manufacturing companies.
“This relief in tax has been done through an ordinance to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019”, informed Smt Nirmala Sitaraman.
The effective rate for domestic companies shall be 25.17 percent inclusive surcharge and cess and for new companies (i.e companies incorporated on or after 1st October 2019 with a condition to commence production on or before 31st March 2023) is 17.01 % inclusive of surcharge and cess, she added.
Minister also said that Government has also decided to expand the scope of CSR 2 percent spending. These decisions are taken to boost ‘Make In India’ projects and to promote research in the country, minister added. 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 Rs. 1.45 lakh crore.