The Govt has issued an ordinance to reduce the corporate tax rate for domestic firms and new manufacturing units by 10 to 12 percentage points, effectively bringing India’s tax rates on a par with its competing Asian peers.
The effective tax rate for domestic corporates, inclusive of surcharges, will fall from 34.94% to 25.17% if they stop availing any other tax sops.
For new manufacturing firms set up after October 1, 2019, and commencing operations by March 31, 2023, the effective tax rate will fall from 29.1% to 17%.
What do you think will be the possible impact of this, in your opinion?
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