FM unveils $20b tax booster for India Inc; D-Street sees biggest rally in a decade

[Skull and Bones]

Finance Minister Nirmala Sitharaman on Friday delivered a major tax bonanza to domestic businesses and manufacturing firms, lowering corporate tax rates to one of the lowest levels in Southeast Asia and allowing new manufacturers to avail minimum corporate tax at 15 per cent.

Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually, which means a $20 billion booster to an economy that grew at the slowest pace in six year in June quarter.

The announcements came in the fourth round of a series of measures that the government has announced over the past month, trying to pump-prime the economy, which has been witnessing a major slowdown in growth that plunged to a six-year low of 5 per cent in June quarter.

The FM said a new provision has been inserted into the Income-Tax Act to enable these measures and the new tax structure will be effective from April 1, 2019.

Accordingly, a domestic company can opt for paying income-tax at 22 per cent subject to the condition that it does not avail any other tax incentive or exemptions. The effective corporate tax rate for them will be 25.17 per cent, including surcharges and cess against the current base rate of 30 per cent.

Any new domestic company incorporated on or after Oct 1, 2019 and making fresh investment in manufacturing will have the option of paying an income-tax at 15 per cent. The rate of Minimum Alternative Tax (MAT) has been reduced from 18.5 per cent to 15 per cent.

KEY HIGHLIGHTS

• FM proposes to slash corporate tax for domestic companies
• Lower corp tax only if no exemption availed
• Effective tax rate will now be 25.17, including surcharge and cess
• Effective tax rate for new manufacturing companies at 17.01%

https://economictimes.indiatimes.co...50-on-fm-tax-booster/articleshow/71213518.cms

 

[rajiv sharma]

Finance Minister Nirmala Sitharaman on Friday delivered a major tax bonanza to domestic businesses and manufacturing firms, lowering corporate tax rates to one of the lowest levels in Southeast Asia and allowing new manufacturers to avail minimum corporate tax at 15 per cent.

Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually, which means a $20 billion booster to an economy that grew at the slowest pace in six year in June quarter.

The announcements came in the fourth round of a series of measures that the government has announced over the past month, trying to pump-prime the economy, which has been witnessing a major slowdown in growth that plunged to a six-year low of 5 per cent in June quarter.

The FM said a new provision has been inserted into the Income-Tax Act to enable these measures and the new tax structure will be effective from April 1, 2019.

Accordingly, a domestic company can opt for paying income-tax at 22 per cent subject to the condition that it does not avail any other tax incentive or exemptions. The effective corporate tax rate for them will be 25.17 per cent, including surcharges and cess against the current base rate of 30 per cent.

Any new domestic company incorporated on or after Oct 1, 2019 and making fresh investment in manufacturing will have the option of paying an income-tax at 15 per cent. The rate of Minimum Alternative Tax (MAT) has been reduced from 18.5 per cent to 15 per cent.

KEY HIGHLIGHTS

• FM proposes to slash corporate tax for domestic companies
• Lower corp tax only if no exemption availed
• Effective tax rate will now be 25.17, including surcharge and cess
• Effective tax rate for new manufacturing companies at 17.01%

https://economictimes.indiatimes.co...50-on-fm-tax-booster/articleshow/71213518.cms

disinvestment is round the corner , and i guess there will be many trade deals signed with trump this week . lot of fdi will come in year or so , and transition period will smoothly pass by , ultimately facilitating things to get fast tracked into right direction of long term growth and development .

 

[rishav]

Need labour reforms