Roadmap for phasing out corporate tax incentives unveiled

Roadmap for phasing out corporate tax incentives unveiled

Roadmap for phasing out corporate tax incentives unveiled

 As promised in the Budget this year, the government has brought out a roadmap for phasing out corporate tax incentives. This has suggested withdrawal of major corporate tax breaks from April 1, 2017, rather than from next fiscal.

As per the blueprint, all tax corporate incentives for which no end date has been specified in the law — such as developing special economic zones and setting up units there, construction of highways and production of natural gas and crude oil from specified blocks — will be phased out from April 1, 2017.

 “The provisions in the Income Tax Act 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,” said the roadmap released on Friday.

Principles of phasing out

The tax department said that the exemptions were being phased out on the basis of four major principles. Profit-linked, investment-linked and area-based tax deductions will be phased out for both corporate and non-corporate tax payers in the country.

 Finance Minister Arun Jaitley had announced in his Budget speech this year that the corporate tax would be lowered to 25 per cent over the next four years. He had also promised phasing out of tax breaks as the country at present has the image of a high-tax market.

 The details of the proposed phasing-out of deductions are available on the website of the Income Tax Department (www.incometaxindia.gov.in).

 The government has invited comments on the same in the next 15 days. The government plans to introduce these changes starting from the next budget in February 2016.

Game changing

  Corporate tax without end date will be phased out from April 1, 2017
  FM announced lowering of corporate tax to 25% in the Budget
  The phasing out is carried out as per four  major principles
  Details of the govt plan is available at www.incometaxindia.gov.in

 

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