Substantial Reduction In Corporate Tax

In an unprecedented move, with a view to boost the slowing Indian economy, the Government of India passed an ordinance substantially reducing corporate tax rates with immediate effect. The salient features and conditions of these changes are as follows:

There are two different rate structures for companies, one for the existing domestic companies and another for new domestic companies engaged in manufacturing activities.

Existing Domestic Companies – Section 115BAA:

Specific conditions:

• Any existing domestic company can exercise option to avail benefit of reduced rate of corporate tax under this section, subject to common conditions mentioned below.
• The rate of tax will be 22%. Education cess and surcharge at applicable rates will apply