Government Calls for Comments on Proposed Plan of
Phasing-Out Exemptions and Deductions under the Income-Tax Act in Order to
Bring Down Rate of Corporate Tax from 30% to 25%
The Union Finance Minister Shri Arun Jaitley in his
Budget Speech 2015 had indicated that the rate of Corporate Tax will be reduced
from 30% to 25% over the next four years along with corresponding phasing-out
of exemptions and deductions. This is a step towards simplification of tax
laws, which is expected to bring about transparency and clarity.
The Government proposes to implement this decision
in the following manner:
· Profit linked, investment linked
and area based deductions will be phased out for both corporate and
non-corporate tax payers.
· The provisions having a sunset
date will not be modified to advance the sunset date. Similarly the sunset
dates provided in the Act will not be extended.
· In case of tax incentives with no
terminal date, a sunset date of 31.3.2017 will be provided either for
commencement of the activity or for claim of benefit depending upon the
structure of the relevant provisions of the Act.
· There will be no weighted
deduction with effect from 01. 04.2017.
The
details of proposed phasing-out of deductions are available on the website of
the Income Tax Department at www.incometaxindia.gov.in.
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