The Union Finance Minister Smt. Nirmala Sitharaman has announced several measures to resurrect the economy.
The FM has proposed to slash the corporate tax rate for domestic firms to 25.75% (effective tax rate). There will be no minimum alternate tax on local companies. An ordinance has also been passed to amend Income Tax Act and Finance Act.
She also proposed that, new locally formed companies / firms on or after October 1, 2019 and starts manufacturing before March 31, 2023 making fresh investment into manufacturing option to pay income tax at 15% (effective tax rate will be 17.01%). The new manufacturing companies shall be required to pay Minimum Alternate Tax (MAT) as well. These companies cannot seek any other exemptions.
FM has also announced the proposal to scrap enhanced surcharge on capital gains from sale of any securities including derivatives from Foreign Portfolio Investors (FPIs).
In a reprieve to companies, the FM also proposed that there will be no tax on share buybacks announced by companies before July 5, 2019.