Finance Minister Nirmala Sitharaman on Monday introduced the Taxation Laws (Amendment) Bill, 2019, in Lok Sabha to replace the Ordinance used for reducing the corporate tax rate to promote growth rate in the sluggish economy.
The Taxation Laws (Amendment) Bill, 2019 will replace the Taxation Laws (Amendment) Ordinance, 2019, promulgated on September 20, 2019, to slash the base corporate tax rate to 22% from 30%.
The Bill was introduced just before the Lok Sabha was adjourned for the day following uproar over political developments in Maharashtra that even led to clashes between Congress members and Lok Sabha Marshals.
The International Financial Services Centres (IFSCs) Authority Bill, 2019, that provides for the creation of a unified financial regulator for IFSCs was introduced, was also introduced alongside.
On September 20, Sitharaman had announced the reduction of the effective corporate tax rates to 25.17% (inclusive of all cess and surcharges) from 30 percent for all domestic companies. For the new manufacturing firms, the tax was slashed to 17.01%.
The tax slashing is one of the many measures that the Centre has taken to revive the economy.
The International Monetary Fund (IMF) last month supported India’s decision to cut corporate income tax, saying that it has a positive impact on investment. It, however, advised India to address the continued fiscal consolidation and secure long-term stability of the fiscal conditions.