The biggest reduction in corporate tax rates in 28 years was approved in the Lok Sabha on Monday (December 2) as it passed a bill to replace an ordinance effecting the 10 percentage point rate cut.
Taxation Laws (Amendment) Bill, 2019, will amend the Income Tax Act, 1961 and the Finance (No 2) Act 2019, and will replace an ordinance promulgated by President Ram Nath Kovind in September.
The government had in September slashed corporate tax rates up to 10 percentage points in a bid to pull the economy out of a six-year low growth with a ₹1.45 lakh crore tax break.
Base corporate tax for existing companies has been reduced to 22% from 30%, and to 15% from 25% for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.
The companies opting for lower tax rates, however, will not be entitled to claim any rebate or deductions.
(With inputs from agencies)