Budget 2019 predictions: Here is why Modi government should tweak corporate tax rate

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New Delhi | Published: January 11, 2019 4:26:50 PM

Budget 2019: At present, the companies with a turn over of Rs 250 crore pay 25 per cent corporate tax.

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Budget 2019: The Confederation of Indian Industry (CII) has sent a recommendation to the Narendra Modi government seeking reduction in corporate tax in the Union Budget 2019. Finance Minister Arun Jaitley will table the India Budget 2019 on February 1. In its pre-budget memorandum, the CII stated tax rates applied to corporates should be lowered to 25 per cent without any condition. The CII said that there should not be any turnover criteria. Apart from these, the industry body suggested that corporate tax rates should be reduced to 18 per cent in a “phased manner”, according to reports.

At present, the companies with a turn over of Rs 250 crore pay 25 per cent corporate tax. However, the companies with a turn over of Rs 250 crore do pay 30 per cent of corporate tax. In Budget 2018, the central government reduced the corporate tax rate to 25 per cent for companies which have a turnover of up to Rs 250 crore. FM Jaitley asserted that the reduction in the corporate tax rate would benefit micro, small and medium enterprises (MSMEs) sector. In Budget 2017, the central government cut the income tax of the companies that have an annual turnover of Rs 50 crore.


In the Union Budget 2015-16, FM Jaitley said that the corporate tax rate would be gradually lowered to 25 per cent from the then existing 30 per cent over the next four years. Since assuming power in 2014, the general anti-avoidance rules GAAR was implemented by the central government.

A few days ago at a CII event, Hindustan Unilever sought for a reduction of corporate tax rates. He said that the corporate tax rate should be brought down at par with the slab prevalent in the neighbouring countries. He claimed that this will ease burden for multi-national corporations.

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