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Jul 29, 2024
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Govt reviewing outcome of 15% tax for new units, may reintroduce it in FY26 budget
The government is analysing the results of the 15% concessional corporate tax rate scheme–which ended on March 31–availed by new manufacturing units, to take a fresh call on its re-introduction, official sources told FE. The internal-review is being carried out, as the Centre’s prime focus is on introducing policies, which push private investments.
“We are analysing the benefits that have been given to those companies (who availed the 15% corporate tax rate)…how they have functioned…how much manufacturing activity benefited from it,” an official said. “If we feel the scheme has served its purpose, we may introduce it again…maybe during the next Budget,” the person added.
The sources said that assessing the benefits of the scheme would be part of the “comprehensive review” of the Income Tax Act, 1961, which the government is going to carry out in the next six months. The finance minsitry will soon set-up an internal committee to evaluate the Act, sources said.
The government had introduced the concessional regime, with a corporate tax rate of 15%, via an ordinance in September 2019, with effect from FY20, for domestic manufacturing companies, incorporated post October 1, 2019, and which commenced production before the extended sunset timeline of March 31, 2024.
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