Union Finance Minister Nirmala Sitharaman on Thursday said that slashing the rate of corporate tax was a good reform and the NDA government in its second term was seeking to bring better changes in the country.
"Cutting down corporate tax is not just good for headlines, not just good PR, not just good atmospherics, it is good reform. This government is now in its second term, after taking up a lot of reformatory steps in 1st term is committed to further reforms," Sitharaman said in Rajya Sabha here.
Earlier on Monday, Lok Sabha passed the bill that provides for inserting a new provision in the Income Tax Act that a company may opt to pay tax at 22 per cent if does not claim any incentive or deduction.
The Taxation Laws (Amendment) Bill, 2019 was passed after a reply by Sitharaman, who expressed confidence in the growth rate picking up after it came down to 4.5 per cent in the July- September quarter.
The bill seeks to replace an ordinance brought by the government earlier.
She had said a new provision in the I-T Act from this fiscal provides an existing domestic company to opt to pay tax at 22 per cent plus surcharge at 10 per and cess at 4 per cent if it does not claim any incentive.
The effective tax rate for these compes comes to 25.17per cent. They would also not be subjected to the Minimum Alternate Tax (MAT).
The bill provides that a domestic manufacturing company set up on or after October 1, 2019, and which commences manufacturing by March 31, 2023, may opt to pay tax at 15 per cent plus surcharge at 10 per cent and cess at 4 per cent if it does not claim any deduction. The effective rate of tax comes to 17.16 per cent for these compes.
( With inputs from ANI )