Jaitley reduces corporate tax rate to 25 p.c. for ₹ 250 cr. turnover

However, for businesses with over ₹ 250 crore turnover 30 per cent tax remains.

Union Finance Minister Arun Jaitley presents the Union Budget at Parliament, in New Delhi on Thursday.

Union Finance Minister Arun Jaitley on Thursday proposed to lower corporate tax rate to 25 per cent for businesses with turnover up to ₹ 250 crore.

“This will benefit entire MSME sector which accounts for 99 per cent of companies filing taxes,” Mr. Jaitley said while announcing the 2018-19 Budget.

The estimates of revenue foregone due to this measure is ₹ 7,000 crore in 2018-19.

However, for businesses with over ₹ 250 crore turnover 30 per cent tax remains.

“The lower corporate tax will leave businesses with investable surplus and create more jobs,” Jaitley said.

Lowering of corporate tax is in tune with Mr. Jaitley’s promise in 2015-16 Budget.

In the 2015-16 Budget, Mr. Jaitley had announced that the corporate tax rate would be gradually lowered to 25 per cent from existing 30 per cent over the next four years.