Finance Minister Arun Jaitley on Saturday reduced corporate tax by five percent for the next four years, and said that taxation is an instrument of social economic engineering.
"We will rationalize and remove exemptions to eliminate tax disputes. Taxation is an instrument of social economic engineering. A regime of exemptions has led to loss of revenue. We propose to reduce rate of corporate tax from 30 percent to 25 percent for next four years. GST is expected to play a transformation role in Indian economy, we're moving on various fronts on GST from next year," Jaitley said in his budget speech in the parliament.
Jaitley also said that the direct tax collection can be expected to reach Rs. 14.49 lakh crores in the upcoming fiscal year.
"It has been our endeavour in the last nine months to foster a stable taxation policy. Defence allocation for this fiscal is Rs. 246,727 Crores. Unplanned expenditure for 2015-16 is estimated at Rs 13,12, 200 crores," he said.