CBDT Gift to Corporate Taxpayers – Slashing of tax rate to 22% / 15%
With an objective to promote growth & investment and to attract fresh investment in Manufacturing, to boost “Make-in-India” initiative, Finance Ministry on 20.09.2019 has given major relief to the Corporate Tax Payers by reducing the tax rates:
New tax rate regime;
Particulars#
New Rate
Effective Rate*
Conditions
Domestic Companies
22%
25.17%
No exemptions/incentives shall be claimed.
New Domestic Manufacturing Companies
15%
17.01%
– Co. to be incorporated on or after 01st Oct’2019– Commences production before 31st Mar’2023– Engaged in Manufacturing sector.– No exemptions/incentives shall be claimed.
# Provisions of Minimum Alternate Tax (MAT u/s 115JB) shall not apply.
*Inclusive of surcharge & cess.
For existing Companies not wishing to opt for Concessional Tax Regime, shall continue to avail exemptions/incentives and pay tax at existing rates with a relief that provisions of MAT (Sec 115JB) shall apply at reduced rate of @15% instead of 18.5%.
Option to Avail Concessional Tax Regime – Available to the existing companies only after expiry of tax holiday/exemption, on condition that once availed it cannot be withdrawn.
Enhanced surcharge introduced by Finance (No.2) Act, 2019 shall not apply to;
Capital Gains arising on, sale of equity shares in a company or unit of equity oriented mutual funds or a unit of Business Trust liable for STT, in the hands of Individual, HUF, AOP, BOI and AJP.
Capital Gains arising on sale of any securities including derivatives in hands of FPIs.
Amended provisions of Tax on Buy Back (Section 115QA) shall not be applicable for transactions before 5th July’2019.
CSR expenditure of 2% can now be spent on incubators funded by Central or State Government, Public Funded Universities, IITs, National Laboratories & Autonomous bodies (estd. Under ICAR, ICMR, CSIR, SAE, DRDO, DST and Ministry of Electronics & Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting SDG.
