Government Calls for Comments on Proposed Plan of Phasing-Out Exemptions and Deductions

Govt intends to bring down Rate of Corporate Tax from 30% to 25%

The Union Finance Minister Arun Jaitley in his Budget Speech 2015 had indicated that the rate of Corporate Tax will be reduced from 30% to 25% over the next four years along with corresponding phasing-out of exemptions and deductions. This is a step towards simplification of tax laws, which is expected to bring about transparency and clarity.

The Government proposes to implement this decision in the following manner:

* Profit linked, investment linked and area based deductions will be phased out for both corporate and non-corporate tax payers.

* The provisions 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.

* In case of tax incentives with no terminal date, a sunset date of 31.3.2017 will be provided either for commencement of the activity or for claim of benefit depending upon the structure of the relevant provisions of the Act.

* There will be no weighted deduction with effect from 01. 04.2017.

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