A Central Government committee, on the 19th of August, recommended cutting down the corporate tax for all companies and also decided to remove surcharges on tax payments.
The panel, led by Akhilesh Ranjan, a member of the Central Board of Direct Taxes, conducted a meeting and submitted a report regarding the recommendation to Nirmala Sitharaman, the Finance Minister of India.
The information about the meeting was shared by a government official, who wished to remain anonymous. He said a Government panel recommended to cut down the corporate taxes from the current 30 % to 25 %.
The decision was taken after discussing the Income Tax of India Act and the corporate taxes under it, which are the highest in the world.
When asked about the details of the submitted report, the Finance Ministry refused to comment, stating nothing could be shared until an official announcement is made.
The panel said, “The Government should move away from surcharges on income and reduce corporate tax to 25 per cent.”
As of now, the GoI imposes 30 % corporate tax on domestic companies and 40 % on foreign firms, excluding the 4 % health and education surcharge on total tax payments.
Apart from this, according to Deloitte, a global tax consultancy firm, if the taxable income exceeds Rs. 10 crores, the domestic companies and foreign companies need to pay an additional surcharge of 12 % and 5 % respectively.
The decision regarding the reduction of taxes will be taken by the Finance Ministry of India, led by Nirmala Sitharaman. If approved, the new recommendations pertaining to taxes would be included in the Budget of India 2020-2021.
Stay tuned for further updates.
