New Delhi: The finance ministry is considering a plan to extend the benefit of a lower 25% corporate tax rate to relatively bigger companies in 2018-19, a person privy to early discussions in the government said.
The tax rate for companies with annual revenue of less than Rs50 crore a year was reduced to 25% from 30% in the Union Budget for the current fiscal.
With tax revenue growth surpassing expectations in 2016-17, the government is now planning to raise the revenue eligibility for companies to anywhere between Rs100 crore and Rs500 crore subject to revenue implications of the move at the time of finalizing the budget for 2018-19, the person said on condition of anonymity.
Finance minister Arun Jaitley in 2015 first proposed to cut corporate tax from 30% to 25% over the next four years.
The government plans to cut the tax rate to make Indian companies globally competitive and attract more investments to the country. Lowering the tax rate will become easier for the government as the tax base widens and compliance rate increases.
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