Finance Minister Nirmala Sitharman has announced major concession for companies which will be incorporated after October 1, 2019.
Finance Minister Nirmala Sitharman has announced major concession for companies which will be incorporated after October 1, 2019. These companies will be taxed at a rate of 15%, while the effective tax on them will be 17.01 per cent. Finance Minister Nirmala Sitharman said that in order to provide a boost to the government’s flagship Make in India program, the government has decided to impose the new tax regime. The finance minister also said that the effective tax rate for these firms will be 17.01% inclusive of surcharge and cess. The new tax rate will be only applicable to companies who do not take any other tax holidays. While the move is likely to provide a fillip to manufacturing in the country, the government has also proposed no minimum alternate tax for these companies. “We today propose to slash the corporate tax rate for domestic firms. These amendments are being brought about to the Income Tax Act 1961,” FM Nirmala Sitharaman said in Goa today.
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Further, the government has also proposed to bring about a tax rate change for existing domestic companies. “The effective tax rate for companies will be 25.17% inclusive of surcharges and cess. There will not be any minimum alternate tax,” FM said.
Meanwhile, the GST Council Meet is also scheduled for Friday. The auto sector and biscuit makers had pinned hopes on the Friday’s GST Council meet as both of these sectors looked to boost demand via GST relief. While both auto and biscuit industry are reeling under a slowdown, leaders from both the sectors had tried to push the government for a rate cut to provide a fillip to dwindling demand. However, merely two days before Friday’s council meet, government sources said that the demand of both auto and industry sectors have been dissed and the GST Fitment Committee ruled out rate cuts on biscuits, cookies and cars, according to several TV channels. The panel may have rejected the demand considering a rate cut of 28% to 18% for the auto industry would have cost Rs 30,000 crore in revenues to the government, according to the internal estimates of the tax department. However, the panel was reported to consider a GST cut on hotel tariff of 28% to 18% for rooms rented for Rs 7,500 and above.