|
| Taxes Code suggests lowering of corporation tax to 25% |
| Press Trust of India / New Delhi Aug 12, 2009, 22:09 IST |
|
The draft Direct Taxes Code released today recommends lowering corporation tax by 5 per cent to 25 per cent and a change in methodology for computing the Minimum Alternate Tax (MAT) levied on companies not paying any tax on account of various exemptions.
"The tax rate for companies (both domestic and foreign) can be substantially reduced to a uniform rate of 25 per cent," said the draft code unveiled by Finance Minister Pranab Mukherjee today.
At present, Indian companies are taxed at a rate of 30 per cent plus surcharges and cesses, while foreign companies attract a rate of 40 per cent.
The code also said tax liability of foreign firms could be supplemented by a branch profit tax of 15 per cent.
On MAT, the code suggests a 2 per cent tax on gross asset value of a company, instead of the current 15 per cent on book profits. For banking companies, MAT has been kept at 0.25 per cent of the gross assets.
"The shift in MAT base from book profits to gross assets will encourage optimal utilisation of the assets and thereby increase efficiency", the code said.
Further, it also recommends retention of the Dividend Distribution Tax (DDT) at 15 per cent.
However, dividends should not be taxed in the hands of the recipients, it said.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
