Prime Minister Narendra Modi on September 20 called Finance Minister Nirmala Sitharaman's announcement to slash corporate tax as "historic" adding that it will give a"great stimulus" to the Make in India initiative.
In a couple of tweets, PM Modi said, "The step to cut corporate tax is historic. It will give a great stimulus to Make In India, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians".
"The announcements in the last few weeks clearly demonstrate that our government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a $5 trillion economy," he said.
Earlier today, FM Sitharaman slashed the effective corporate tax from 30 percent to 25.17 percent, inclusive of all cess and surcharges for domestic companies.
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However, the move, effective from April 1, is subject to the condition that they will not avail any other incentive or exemptions.
In effect, the corporate tax rate will be 22 percent for domestic companies if they do not avail any incentive or concession. The changes in the Income Tax Act and Finance Act will be made effective through an ordinance.
Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures would be Rs 1.45 lakh crore annually.
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