Lok Sabha passes Bill to slash down corporate tax rates

During the winter session of Parliament, the Lok Sabha has passed a Bill with a view to replace an Ordinance effecting the relaxation of corporate tax rates. Taxation Laws (Amendment) Bill, 2019 shall amend the Income Tax Act 1961 and the Finance (No. 2) Act 2019 replacing the Ordinance promulgated in September.

In September when the government slashed corporate tax rates up to 10 percentage points, it was the biggest reduction in 28 years, as it looked to pull the economy out of a six-year low growth with a tax break of Rs 1.45 lakh crore.

Base corporate tax for existing companies has been reduced to 22 per cent from 30 per cent, and to 15 per cent from 25 per cent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.

However, the companies opting for lower tax rates would not be entitled to claim any rebate or deductions.