Corporate tax cut to benefit nearly 4,000 companies
The latest decision of the government to enhance the coverage of the concessional 25% rate, to include those companies having revenues of less than Rs 400 crore a year, is likely to benefit around 4,000 companies. The Centre is expected to forego Rs 3,000 crores revenue annually as a consequence of this move, which covers 99.3% companies filing returns.
The corporate sector has for a long time sought an overall lowering of the corporate rate in line with the government’s promise to bring it down to ASEAN levels (20-24%). The government has so far not delivered on this. However, on the brighter side, the effective rate for quite a few companies is much lower, given that there are a number of exemptions available to companies.