New Delhi: The existing taxation structure for corporates with 22% tax is “very reasonable” compared to an economy like India and hence the concessional tax regime applicable for new manufacturing units for four years was not extended beyond that. March 2024, Revenue Secretary Sanjay Malhotra Said.
In an interview with PTI, Malhotra He said the Interim Budget 2024-25 provides for continuity in the taxation regime and the benefits given to taxpayers in previous years are showing results in the form of a huge jump in personal income tax.
“Taxpayer services have been a major focus of the government and will continue to be so. Taxpayer services include rationalization, simplification and trust-based taxation with less scrutiny and more accurate assessment and use of technology. We hope that taxpayer services will The reforms will continue to “help us improve compliance and tax collection efficiency,” Malhotra said.
On why the concessional tax regime for corporates was not extended beyond March 31, 2024, Malhotra said the scheme was introduced in 2019 and companies were allowed to avail the concessional 15% tax rate. Long time was given to set up new units. ,
“A long period of four years was given. This is the time when a big company worked on the ground from concept, planning, raising funds, adequate time was given, it was extended for another year till March 31, 2024. Was increased because of Covid. These investments have a longer initial period.
“The current 22% taxation for corporates in our country, compared to an economy of our size, is very reasonable. In the light of all this, it was felt that this was the date that had to sunset and it should sunset ,” Malhotra said.
The government announced in 2019 that any new domestic company making new investment in manufacturing on or after October 1, 2019, will have the option to pay income tax at the rate of 15 percent if they start their production on or before October 31. Have done. , 2023. In the budget presented on 1 February 2023, the date was extended to 31 March 2024.
“New manufacturing companies who are able to start their operations before March 31, 2024, will continue to get this benefit,” Malhotra said.
In September 2019, the government announced a reduction in the base corporate tax for then existing companies from 30% to 22%; And for new manufacturing firms incorporated after October 1, 2019, it has been reduced from 25% to 15%.
Companies opting for these new tax rates had to give up all exemptions and incentives. After considering the effective tax rate, surcharge and cess for existing units – e.g. clean India Cess and education cess, which is levied on top of income and corporate tax rates – is 25.17% compared to 34.94% earlier.
In the interim Budget, the government has announced the withdrawal of outstanding small tax demands up to Rs 25,000 by 2014-15 in respect of income, wealth and gift taxes, some of which date back as far as 1962. There are approximately 1.11 crore such disputed demand entries and the total tax demand involved is Rs 3,500-3,600 crore.
“These are not in the nature of disputes, they are in the nature of unresolved tax demands and some are very old. They will help in better tax administration,” he said.
In an interview with PTI, Malhotra He said the Interim Budget 2024-25 provides for continuity in the taxation regime and the benefits given to taxpayers in previous years are showing results in the form of a huge jump in personal income tax.
“Taxpayer services have been a major focus of the government and will continue to be so. Taxpayer services include rationalization, simplification and trust-based taxation with less scrutiny and more accurate assessment and use of technology. We hope that taxpayer services will The reforms will continue to “help us improve compliance and tax collection efficiency,” Malhotra said.
On why the concessional tax regime for corporates was not extended beyond March 31, 2024, Malhotra said the scheme was introduced in 2019 and companies were allowed to avail the concessional 15% tax rate. Long time was given to set up new units. ,
“A long period of four years was given. This is the time when a big company worked on the ground from concept, planning, raising funds, adequate time was given, it was extended for another year till March 31, 2024. Was increased because of Covid. These investments have a longer initial period.
“The current 22% taxation for corporates in our country, compared to an economy of our size, is very reasonable. In the light of all this, it was felt that this was the date that had to sunset and it should sunset ,” Malhotra said.
The government announced in 2019 that any new domestic company making new investment in manufacturing on or after October 1, 2019, will have the option to pay income tax at the rate of 15 percent if they start their production on or before October 31. Have done. , 2023. In the budget presented on 1 February 2023, the date was extended to 31 March 2024.
“New manufacturing companies who are able to start their operations before March 31, 2024, will continue to get this benefit,” Malhotra said.
In September 2019, the government announced a reduction in the base corporate tax for then existing companies from 30% to 22%; And for new manufacturing firms incorporated after October 1, 2019, it has been reduced from 25% to 15%.
Companies opting for these new tax rates had to give up all exemptions and incentives. After considering the effective tax rate, surcharge and cess for existing units – e.g. clean India Cess and education cess, which is levied on top of income and corporate tax rates – is 25.17% compared to 34.94% earlier.
In the interim Budget, the government has announced the withdrawal of outstanding small tax demands up to Rs 25,000 by 2014-15 in respect of income, wealth and gift taxes, some of which date back as far as 1962. There are approximately 1.11 crore such disputed demand entries and the total tax demand involved is Rs 3,500-3,600 crore.
“These are not in the nature of disputes, they are in the nature of unresolved tax demands and some are very old. They will help in better tax administration,” he said.
