Updates from FM Nirmala Sitharaman’s press conference:
1) Corporate tax rate slashed to 22% from 30% | Effective tax rate for companies to be 25.7% including surcharge and CESS | Such companies not require to pay MAT.
2) New Manufacturing Co on or before from 1st Oct 2019 and where production starts before 31st Mar 2023 | Tax rate slashed to 15% | Effective tax rate would be 17.01% (including Surcharge & Tax) | No MAT required to be paid.
3) Companies not wanting to opt for option 1 or 2 can continue within the existing tax regime. Post expiry of the current regime they can choose one of the above and will have to stick to the same.
PUSH FOR CAPITAL MARKETS **
Enhanced surcharge introduced in July 2019 shall not apply to Capital Gains on sale of equity share which is subject to STT ** Enhanced surcharge introduced in July 2019 shall not apply to Capital Gains on Derivatives
** BUYBACK gets grandfather:
Relief for listed companies that have made an announcement for buyback before July 5, tax on buyback of share shall not be charge.
** Expand the scope of CSR 2% spending across various other means
• TOTAL REVENUE FOREGONE FOR THE REDUCTION OF CORPORATION TAX IS RS 1.45 TRILLION PER YEAR.
Disclaimer :Please Note that fine prints are awaited and actuals facts may vary from the above.