Budget 2020: Govt to get relief after corporate tax cut

Budget 2020: Govt to get relief after corporate tax cut

Representative image.

Struggling to meet the fiscal deficit, the government will have a sigh of relief as it is estimated to hit around Rs 1 lakh crore due to a reduction in the corporate tax, against Rs 1.45 lakh crore calculated when the move was announced, reported The Times of India.

In September, the government had announced a cut in the corporate tax rate to 22 pe rcent from 30 per cent. It also lowered the tax rate for new manufacturing companies to 15 per cent to attract new foreign direct investments.

Tax consultants told TOI that several companies are yet to decide on whether to move a 22 percent levy or continue with the existing mechanism.

“Profitable banks and FMCG companies will find it beneficial to move to the new rate as there is an immediate benefit but infrastructure for some of the companies engaged in exports may continue because the effective rate is lower currently", TOI quotes Sudhir Kapadia who leads the tax practice at consulting firm EY.