On Friday, Nirmala Sitharaman, Union Finance Minister, has announced a slew of tax exemptions at GST council meeting. She proposed to cut corporate tax for domestic companies and new local manufacturing companies through an ordinance. The government slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
The new tax rate will be applicable from the current financial year which began on 1st April, said Nirmala Sitharaman. The revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually, she added. This is being done to promote investment and growth.
“Tax concessions will bring investments in Make in India, boost employment and economic activity, leading to more revenue,” the finance minister said in Goa.
For domestic companies, the corporate tax will be 22 per cent, if they do not avail any incentive or concession. The companies opting for 22 per cent income tax slab would not have to pay minimum alternate tax (MAT), also said.