GOA: In a major move, Finance Minister Nirmala Sitharaman on Friday proposed to slash corporate tax for domestic companies and new local manufacturing companies at a rate of 22 per cent subject to the condition that they will not avail any incentive.
The total revenue foregone for a reduction in corporate tax rate is estimated at Rs 1.45 lakh crore per year.
“Any domestic company gets an option to pay income tax at a rate of 22 per cent subject to the condition that they will not avail any incentive,” the finance minister said at a press conference in Goa.
The government also announced to give MAT relief for those opting to continue paying surcharge and cess. MAT has been reduced to 15 per cent from 18.5 per cent for companies who continue to avail exemptions and incentives.
India Inc was demanding to reduce tax rates since long, especially in the wake of an economic slowdown.
The finance minister also waived surcharge introduced in Budget on capital gain arising on sale of equity shares in a company liable for Securities Transaction Tax.
The finance minister also said that for listed companies which made the announcement for public buyback before July 5, 2019, it is provided that tax on buyback on shares of such companies will not be charged.
She further said that super-rich tax will not to apply on capital gains arising from the sale of any security, including derivatives in hands of foreign portfolio investments (FPIs).