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Budget 2018
Last Updated : Feb 01, 2018 04:35 PM IST | Source: Moneycontrol.com

Budget 2018: 25% tax rate to apply to companies with turnover of up to Rs 250 crore, a five-fold increase

Union Budget 2017 announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs 50 crore in financial year 2015-16.


Reduced rate of tax on profits comes at a big gift for the businessmen in India. The Finance Minister Arun Jaitley in his speech delivering budget 2018 proposed to extend the benefit of reduced rate of tax at 25% to companies who have reported turnover up to Rs 250 crore in the financial year 2016-17.

Union Budget 2017 announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs 50 crore in financial year 2015-16. This benefitted 96% of the total companies filing tax returns. Today by changing the qualifying norm to turnover of Rs 250 crore the Finance Minister extended it to almost 99% of companies filing their tax returns.

There was a fear that the government will turn populist ahead of the general elections in CY2019. However, the government choose to tread the path carefully. Though the fiscal deficit number has gone up, it will not hurt the interest rates. The target for fiscal deficit for Fy2018-2019 is at 3.3% as compared to 3% expected earlier. Increased fiscal deficit mean increased government borrowings, leading to higher interest rates. However, the numbers do not look that bad. The benchmark 10 year G-sec yield however inched up slightly to 7.58%.

To improve the traceability and trackability the Budget 2018 also proposes a unique identity for the businesses, on the lines of AADHAR.

The government has already identified 372 business reforms with a view to improve the ‘ease of doing business’. States are already working on these, said Arun Jaitley in his budget speech.

The Finance Minister did not tinker with GST rates, indicating that the new tax regime is stabilising. This will be seen positively by the businessmen.Overall, the budget 2018 did not bring in major changes for the businessmen.

India Union Budget 2018: What does Finance Minister Arun Jaitley have up his sleeve? Click here for live Budget 2018 news, views and analyses.
First Published on Feb 1, 2018 03:28 pm
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