Reportedly Finance Minister Nirmala Seetharaman said "The current corporate tax rate has been brought down to 22% from 30%. Meanwhile the effective tax rate will be 25.17% inclusive of all surcharges and cess for such domestic companies and for new manufacturing companies the existing tax rate is 25% which has been brought down to 15%. The effective tax rate after surcharges and cess will be 17%".
Seetharaman in a press conference ahead of the GST Council meet in goa said "In order to promote growth and investment, a new provision has been included in the Income Tax act, that allows any domestic companies an option to pay income tax at the rate of 22% without exemptions. Amendments will be made through an ordinance to IT Act and these companies will not be required to pay MAT".
Moreover Seetharaman announced companies which pay income tax at 22%, without any exemption or incentives, will not be required to pay Minimum Alternative Tax. Hence making the announcement, the finance minister said the new tax rate will be applicable from the current fiscal which began on April 1. Perhaps Seetharaman said that the revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually and this, she said, is being done to promote investment and growth.
