The Centre today slashed domestic corporate tax to an effective 25.17%, inclusive of all surcharges and cess.
Prime Minister Narendra Modi on Friday termed as a "historic step" the government's decision to slash corporate tax rates for domestic companies to spur growth and investment in the country and said it will give a "great stimulus" to the 'Make in India' initiative.
"The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve the competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians," he said in a tweet.
The Prime Minister stressed the recent announcements show that the government is "leaving no stones unturned" to make India more business-friendly and to achieve a USD 5 trillion economy in the next few years.
"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," Modi said in a follow-up tweet.
Bringing in tax cuts and fiscal reliefs through an Ordinance, the Centre today slashed domestic corporate tax to an effective 25.17%, inclusive of all surcharges and cess, in a bid to promote growth and investments amid an economic slowdown that would cost the exchequer Rs 1.45 lakh crore.
The effective corporate tax rate earlier was 30%.
Addressing a presser in Goa, Finance Minister Nirmala Sitharaman said that manufacturing companies set up after October 1 will have the option to pay 15% tax. "The effective tax rate for new manufacturing firms will be 17.01% inclusive of surcharge and tax," she said.
The government has also decided to expand the scope of corporate social responsibility (CSR) 2% spending.
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