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    Around 60% of tax paying firms opt for new corporate tax regime, says report

    Around 60% of tax paying firms opt for new corporate tax regime, says report

    Around 60% of tax paying firms opt for new corporate tax regime, says report
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    By CNBC-TV18  IST (Updated)

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    According to income-tax department estimates, around three lakh companies have shifted to the 22 percent rate from the earlier rate of 25 to 30 percent.

    Close to 60 percent of taxpaying companies have moved to the government’s offer of a lower corporation tax regime, reported Business Standard. According to income-tax department estimates, the report said, around three lakh companies have shifted to the 22 percent rate from the earlier rate of 25 to 30 percent.
    “While initial estimates suggest around 60 percent of taxpaying companies have moved to the new corporate tax regime, a more realistic picture will emerge in December, once we get the third instalment of advance tax,” a government official was quoted as saying in the report.
    The development, the report added, comes after the finance minister announced the option in September. The government is expecting around Rs 1 trillion of foregone revenue in 2019-20, lower than the initially estimated revenue loss of approximately Rs 1.45 trillion, according to the report.
    Last month, the ministry said that companies opting for the lower corporate tax rate of 22 percent will not be allowed to reduce their tax liability by claiming deductions towards additional depreciation and Minimum Alternative Tax (MAT) credits. Earlier, in September, the President promulgated an Ordinance reducing the rate of corporate tax to 22 percent from 30 percent with some riders. The move was aimed at boosting the Indian economy that is facing a slowdown.
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