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Govt plan to reduce corporate tax to 25%

Posted on 23 November 2015,    
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Government Calls for Comments on Proposed Plan of Phasing-Out Exemptions and Deductions under the Income-Tax Act in Order to Bring Down Rate of Corporate Tax from 30% to 25% 

The Union Finance Minister Shri Arun Jaitley in his Budget Speech 2015 had indicated that the rate of Corporate Tax will be reduced from 30% to 25% over the next four years along with corresponding phasing-out of exemptions and deductions. This is a step towards simplification of tax laws, which is expected to bring about transparency and clarity.

 The Government proposes to implement this decision in the following manner:

· Profit linked, investment linked and area based deductions will be phased out for both corporate and non-corporate tax payers.

· The provisions having a sunset date will not be modified to advance the sunset date. Similarly the sunset dates provided in the Act will not be extended.

· In case of tax incentives with no terminal date, a sunset date of 31.3.2017 will be provided either for commencement of the activity or for claim of benefit depending upon the structure of the relevant provisions of the Act.

·  There will be no weighted deduction with effect from 01. 04.2017.

The details of proposed phasing-out of deductions are available on the website of the Income Tax Department atwww.incometaxindia.gov.in.

Comments on this proposal may be sent within 15 days to Director (TPL-III) on mail at dirtpl3@nic.in or by post at Director (TPL III), Central Board of Direct Taxes, Room No. 147G, North Block, New Delhi- 110001.

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