Rs. Companies with a met credit of Rs 75,000 crore are not in a hurry to take advantage of corporate tax deductions

Mumbai, Ta. October 17, 2019, Thursday

The leaders of the corporate world of the country are not in a hurry to move to a new tax rate system. Each of the 4 companies, including some unlisted, have a minimum of over Rs 40 million in credit on their books. Together with each of these companies, the amount goes up to Rs. 1 crore.

According to one research firm sources, as many as 2 heavyweight companies have a book credit worth over Rs 5 crore each. Some of these companies have book matte credits worth over Rs 1 crore. With the help of matte credit, many companies can bring their effective tax rate down from 5% to 8.5%. The effective tax rate in the new mattress is 8.5 percent.

If companies adopt this route, they will save 5% on their post-tax expenses. Such companies will adopt a new rate of taxation whose effective tax rate is more than 5%.

The difference between tax and regular tax paid by the company is the tax credit. Tax credits can be extended for up to 2 years. Experts estimate that companies in the infrastructure, telecom, IT and renewable energy sectors will keep their tax rate levels intact. Because his book has significant matte credits, he has also taken advantage of tax relief.

Whether or not a company adopts a new tax rate method, the Matt rate for them has been reduced. Companies that come in with a high effective tax rate bracket of 8.5 percent will naturally migrate to the new tax rate.

In particular, banks, NBFCs and FMCG companies are falling into the corporate tax bracket. Thus going into the new tax rate would give them a gain of nine per cent in taxes. In addition, companies in the auto, chemical, gems and jewelery sectors are likely to accept new rates of corporate tax.

Companies with manufacturing sectors and proprietorships will set up new companies to take advantage of the announcement made to provide tax relief to new companies. If these companies want to take advantage of the lower rate, then a new company and a new business will have to be started.