The Union finance ministry has decided to slash corporate taxes to 22%
Bengaluru: Union finance minister Nirmala Sitharaman held a presser today to announce more steps to tackle the economy slowdown. The ministry has slashed corporate tax rate for domestic companies and new domestic manufacturing companies. In fact, the minister said an ordinance in this regard had already been passed.
Here are a few announcements.
1. Corporate tax rate to be 22% without exemptions, inclusive of surcharge and cess. No Minimum Alternate Tax (MAT) applicable on such companies.
2. Effective corporate tax rate after surcharge to be 25.17 percent
3. To attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15 percent.
4. To stabilise flow of funds into the market the enhanced surcharge announced in Budget 2019 will not apply on capital gains arising on sale of any security, including derivatives by foreign portfolio investors.
5. Effective tax for new companies shall be 17.01 percent, including cess and surcharge. Companies enjoying tax holidays would be able to avail concessional rates post the exemption period.
6. MAT relief for those opting to continue paying surcharge and cess. MAT has been reduced to 15 percent from 18.5 percent for companies who continue to avail exemptions and incentives.
7. The new provision in the Income Tax Act, which will allow domestic companies to pay income tax at the rate of 22 percent, will be effective from FY19-20. It is subject to condition that they will not avail any incentive or exemptions.
8. To attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15 percent.
All the above points were taken from the website moneycontol.com
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