Corporate tax relief: Tax rates in India now comparable to those of other Asian countries

Ahmedabad. September 20, 2019, Friday

Corporate growth has been reduced as part of a series of steps taken today by the government to boost demand and investments after the growth rate dropped to five percent at the end of the June quarter. The move has now made India's tax rate comparable to that of other Asian countries, and it will spur efforts to attract investment. Companies are looking to alternative countries to address the problems that arise in the supply chain caused by the US and China trade wars. The reduction in taxation has eliminated this problem of the corporate.

The government has taken bold and proactive measures for the much-needed tax reform, which will attract investment and also help with capital expenditure on a private basis, said Jignesh Madhwani of Torin Wealth Management, adding that the reduction in corporate tax rates will make the tax net more comprehensive and the government revenue. Overall this step will increase the overall competitiveness of Indian companies globally. The move to tackle the recession and lift market sentiment will prove to be very important. If we look at the key points of the advertisement made by the Minister of Finance,

Production companies established after October 1st will have the option to pay 5% tax. For new product companies, the applicable tax rate will be 8.5% which includes surcharges and taxes.

A new provision has been introduced in the Income Tax Act which has been implemented from fiscal year 1-9. Under this provision, if a local company does not receive any incentives or rebates, it is allowed to pay income tax at the rate of 5%.

Listed companies announcing buyback before 5th July will not have to pay tax on shares buyback.

Higher surcharge will not be applicable on capital gains on the sale of securities, including derivatives of FPI-owned derivatives. No surcharge will be applied to capital gains raised on the sale of equity or affiliate funds eligible for filing equity or STT, thereby stabilizing the flow of capital markets.

The concession and relief companies have been reduced from 5% to 5%.

Among other important advertisements, two percent of CSR costs can now be incurred by government, PSUs, incubators and public funded educational institutions and IITs.