As Finance Minister Nirmala Sitharaman presented the Union Budget 2019 for the second term of Prime Minister Narendra Modi, in a massive move the Union Budget proposed to expand lower rate from companies with turnover of 250 crores to companies with turnover of 400 crores.
Saying that the tax proposal of the Government is to stimulate growth, provide affordable housing and encourage startups. She also added that the tax proposal will be geared to promoting digital economy. The Finance Minister also said that it is a step to ensure simplified tax administration and greater transparency.
Announcing the tax proposal that benefits the companies, Finance Minister Sitharaman said:
"We continue in reduction in rates, a lower rate of 25 % is only applicable to companies of turnopver upto 250 crores. The proposal is to widen it and bring all companies with turnover of 400 crore. This will cover 99.3% of all the companies. Only 0.7 % of companies will remain out of this range."
The Finance Minister in her speech said that this move by the Government will cover 99.3% of the companies and only 0.7% of companies will remain outside this rate.
"My tax proposals will aim to stimulate growth, incentivise affordable housing, and encourage start-ups by releasing entrepreneurial spirits. It will also be geared towards promoting digital economy. I aim to simplify tax administration and bring greater transparency. So far as corporate tax is concerned, we continue with phased
reduction in rates. Currently, the lower rate of 25 % is only applicable to companies having annual turnover up to 250 Crore. I propose to widen this to include all companies having annual turnover up to 400 crore. This will cover 99.3% of the companies. Now only 0.7% of companies will remain outside this rate," Sitharaman said.