The Union Minister for Finance and Corporate Affairs, Arun Jaitley has proposed a reduced rate of 25% to companies that have reported turnover up to Rs 250 crores in financial year 2016-17.
This will benefit the entire class of Micro, Small and Medium Enterprises which accounts for almost 99% of companies filing their tax returns. Accepting Rs 7,000 crores as the estimated revenue forgone due to this measure during the financial year 2018-19, the Finance Minister, while presenting the General Budget 2018-19 in Parliament here today, said, "This is towards fulfilment of my promise to reduce corporate tax rate in a phased manner." He further added, "The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs."
The Finance Minister recalled that in the Union Budget 2017, he had announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs.50 crores in financial year 2015-16. This had benefitted 96% of the total companies filing tax returns. The Finance Minister also said that after this measure, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs.250 crores will remain in 30% slab.
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