{"id":86289,"date":"2019-10-01T15:54:54","date_gmt":"2019-10-01T10:24:54","guid":{"rendered":"http:\/\/factly.forumias.com\/?p=10541"},"modified":"2019-10-01T15:54:54","modified_gmt":"2019-10-01T10:24:54","slug":"explained-how-to-read-corporate-tax-cut","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/explained-how-to-read-corporate-tax-cut\/","title":{"rendered":"Explained: How to read corporate tax cut"},"content":{"rendered":"\n<p><strong>News:<\/strong>Recently, the Government has reduced the corporate tax rates in order to encourage manufacturing and boost private investment.<br><\/p>\n\n\n\n<p><strong>Facts:<\/strong><br><\/p>\n\n\n\n<p><strong>What has the government done?<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The central government has slashed corporate tax rates for domestic firms from 30% to 22% and for new manufacturing companies from 25% to 15% to boost economic growth.<\/li><li>The new effective tax rate inclusive of surcharge and cess for domestic companies would be 25.17% and for new domestic manufacturing companies would be 17.01%.<\/li><li>Also,the Minimum Alternate Tax(MAT) will not apply to such companies.<\/li><\/ul>\n\n\n\n<p><strong>Significance of the rate cut:<\/strong>The tax rate cut does the following<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The rate cut leaves corporates with more money which they can use to either reinvest in existing firms or invest in new ventures.<\/li><li>In the medium to long term that is anywhere between one or two and five years or more, a corporate tax cut is expected to boost investments and increase the productive capacity of the economy.<\/li><li>The additional money may lead to a secondary round effect where these companies may hire more employees.<\/li><li>The rate cut is also expected to give a great stimulus to \u2018Make In India\u2019, by attracting private investment from across the globe and improving&nbsp; the competitiveness of the private sector.<\/li><\/ul>\n\n\n\n<p><strong>Concerns of the rate cut:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The rate cut will cost the government Rs 1.45 lakh crore annually.This increases the chances of higher fiscal deficit.<\/li><li>The corporate tax cut also depresses economic activity to the extent that it reduces the money in the hands of the government in the form of tax revenues.<\/li><li>The states will also be impacted as 42% of Union taxes is devolved to the states.Hence,they will receive almost Rs 61,000 crore less from the Central government.<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News:Recently, the Government has reduced the corporate tax rates in order to encourage manufacturing and boost private investment. Facts: What has the government done? The central government has slashed corporate tax rates for domestic firms from 30% to 22% and for new manufacturing companies from 25% to 15% to boost economic growth. The new effective&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/explained-how-to-read-corporate-tax-cut\/\">Continue reading <span class=\"screen-reader-text\">Explained: How to read corporate tax cut<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3127],"tags":[3856],"class_list":["post-86289","post","type-post","status-publish","format-standard","hentry","category-economy","tag-corporate-tax-rate","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704571334},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/86289","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=86289"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/86289\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=86289"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=86289"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=86289"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}