Talking about the Centre's move which slashed corporate tax to 22% for domestic companies, PM Modi on Friday, shared a detailed article highlighting key issues dealt in the new tax cut. He announced that the Centre has brought in the Taxation Laws (Amendment) Ordinance 2019 to amend Finance (No. 2) Act 2019, which was passed earlier in the Finance Session of the Parliament. Calling the tax cut, historic, he has highlighted its effects. He also reiterated his government's efforts to accelerate the Indian economy's growth toward his $ 5 trillion dream.
Read | Centre bans e-cigarettes, Finance Min explains why they're not cool
PM Modi lists benefits of latest tax cut
READ |FM's corporate tax cut spikes investor wealth by Rs 2.11 lakh crore
Here are the highlights of the tax cut benefits for domestic companies mentioned in PM Modi's blog:
- Tax cut to 22% to domestic companies is subject to the condition that they will not avail any exemption/incentive, making effective tax rate for these companies shall be 25.17% inclusive of surcharge & cess, promoting growth
- To promote 'Make in India', domestic companies could avail paying income tax at 15% while investing in manufacturing. The effective tax rate for these companies shall be 17.01%
- Companies not availing the above concessional tax regime can opt into it after expiry of their tax holiday/exemption period. To provide relief to companies availing exemptions/incentives, Minimum Alternate Tax has been reduced from existing 18.5% to 15%.
- Surcharge introduced by the Finance (No.2) Act, 2019 is no more applicable on capital gains arising on sale of equity share in a company, unit of equity fund etc.
- Buy-back of shares announced before 5th July 2019, shall also not be charged
- Centre has opened the scope of CSR 2% spending to incubators funded by Central or State Government or any agency or Public Sector Undertaking e.g: ICAR, ICMR, CSIR, DAE, DRDO
- The total revenue foregone for the reduction in corporate tax rate and other relief estimated at Rs. 1,45,000 crore.
Read | Finance Minister Nirmala Sitharaman unveils reforms to boost exports
The above announcement was done by the Finance Minister Sitharaman Nirmala Sitaraman during the Press Conference in Goa on Friday.
Read | Finance Minister Sitharaman promises relief to automobile industry