Union Budget 2019: The Finance Minister Nirmala Sitharman extended the reduced tax rate of 25 per cent from the current rate of 30 per cent for the companies having an annual turnover of up to Rs 400 crore in her maiden budget speech on Friday.
Budget 2019-20: In a bid to give a major boost to the corporates, the Finance Minister Nirmala Sitharman extended the reduced tax rate of 25 per cent from the current rate of 30 per cent for the companies having an annual turnover of up to Rs 400 crore in her maiden budget speech on Friday. The minister said now the 99.39 per cent of the companies in India will enjoy the lower tax rates and only 0.7 per cent of companies will fall into the category of higher slab rates.
“This will cover 99.39 per cent of all the cos and only 0.7 per cent of the companies will remain outside these companies,” said Sitharaman while presenting the Union Budget 2019-20 in the Lok Sabha. The experts have welcomed the government’s move and expect the extension of reduced tax rates to the companies having a turnover of up to Rs 500 crore in the next budget.
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“Government is paving the way for covering all companies in the coming years. This proves the intention of the government to move to the reduced corporate tax rate,” Chirag Nangia, Director, Nangia & Co LLP told Financial Express Online after the finance minister announced the lower tax rate. Last year, the government had extended the reduced tax rates to the companies having an annual turnover of Rs 250 crore in the Union Budget 2018-19. The government had also cut the corporate tax to 25% from 30% in the Union Budget of 2017-18 for companies with a turnover of Rs 50 crore.
Nirmala Sitharman said India will become $3 trillion economy by FY20, even as the government strives to reach $5 trillion mark by fiscal 2025. The Finance Minister also proposed changes to kickstart domestic and foreign investment. She also said that there is a need to invest heavily in infrastructure, digital economy and job creation in MSMEs. Having shown that ‘reform, perform and transform’ can succeed, the finance minister said that the country is all set to achieve new heights through its reform measures.