Corporate tax rates for domestic companies and new manufacturing companies have been slashed, Finance Minister Nirmala Sitharaman announced on Friday. The changes will cost the government about ₹1,45,000 crore in revenue foregone. Sitharaman said the economic buoyancy would generate more revenue and widen the tax basket.
Union Finance Minister Nirmala Sitharaman (ANI photo)
{{^htLoading}} {{/htLoading}}
The change gives a domestic company an option to pay income tax at 22 per cent (down from 30 per cent) while new domestic manufacturing companies can pay corporate tax at 15 per cent (instead of existing 25 per cent) provided they do not claim any exemption. This means that the effective tax rate would 25.17 per cent and 17.01 per cent, respectively.
{{^usCountry}}{{/usCountry}}
“This is a major tax reduction that has happened,” she said
Watch: Big boost for Make in India, corporate tax for domestic firms slashed
Sitharaman said the changes were part of the continuing efforts to respond to points made during consultations with the government. This set of amendments was brought about in the taxation laws through an ordinance which was passed a couple of minutes ago, Sitharaman said at a media conference before heading into the Goods and Services Tax Council meeting.
“Now, India’s corporate tax rates are almost at par with many Asian and South-East Asian countries and lower than many countries,” she said listing seven changes in the tax regime.
A company which does not opt for the concessional tax regime and avails the tax exemption or incentive shall continue to pay tax at the pre-amended rate but can switch to the concessional regime at a later date.
{{^htLoading}} {{/htLoading}}
{{^usCountry}}
“Further, in order to provide relief to companies which continue to avail exemptions or incentives, the rate of Minimum Alternate Tax has been reduced from the existing 18.5 per cent to 15 per cent,” she said.
{{/usCountry}}
{{#usCountry}}
“Further, in order to provide relief to companies which continue to avail exemptions or incentives, the rate of Minimum Alternate Tax has been reduced from the existing 18.5 per cent to 15 per cent,” she said.
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.
Get Latest News, breaking headlines, and top India News, and today real-time updates from across the nation. Stay informed on politics, government policies, crime, Today Weather, and major developments on Hindustan Times
Get Latest News, breaking headlines, and top India News, and today real-time updates from across the nation. Stay informed on politics, government policies, crime, Today Weather, and major developments on Hindustan Times
