Nirmala Sitharaman, the Finance Minister of India, on the 20th of September, reduced the corporate tax from the existing 30 % to 25.17 %, including cess and surcharges for Indian companies.
Ms. Sitharaman, accompanied by several finance ministers, addressed a press conference in Panaji, Goa. During the conference, she made a new set of financial announcements, especially for corporates and domestic corporates in India.
However, the provision is applicable if the companies do not avail any other incentives or exemptions. Companies not availing any incentives or concessions will have their tax reduced to 22 % and they will not have to pay the Minimum Alternate Tax (MAT.)
Speaking about the MAT, the Finance Minister also reduced the MAT from 18 % to 15 % to stabilise the flow of funds in the capital market.
Ms. Sitharaman said, “We want to have more investments in Make In India. This will mean more investment. This will mean strengthening the economy.”
According to Ms. Sitharaman, the reduction in tax will help to save 1.45 lakh crores annually.
Besides, companies can go for lower tax rates if they do not avail tax holidays and concessions.
Apart from this, the Central Government also decided not to charge higher surcharges for the listed companies which announced buyback of shares before the 5th of July.
The Finance Minister also announced permission for companies to use their 2 % corporate social responsibility (CSR) spend on incubation, IITs, NITs and national laboratories.
Nirmala Sitharaman said she is confident the reduction in taxes will benefit the economy of India and enhance the business sector in the Country.
This will also attract investors and bring big investments to India.
Stay tuned for further updates.
