CURRENT AFFAIRS

Detailed explanation-1: -The Union Budget 2019-20 has proposed to extend the lower rate of 25 % Corporate Tax to all companies with annual turnover up to Rs. 400 crore. Currently, this rate is only applicable to companies having annual turnover up to Rs. 250 crore.

Detailed explanation-2: -In India, companies pay taxes on their income as per the Income Tax Act, 1961 (IT Act). Under the Act, domestic companies (i.e. companies incorporated in India) with annual turnover of up to Rs 400 crore are required to pay income tax at the rate of 25%. [1] For other domestic companies, the tax rate is 30%.

Detailed explanation-3: -The Tax Cuts and Jobs Act (TCJA) reduced the top corporate income tax rate from 35 percent to 21 percent and eliminated the graduated corporate rate schedule and the corporate alternative minimum tax.

Detailed explanation-4: -In September 2019, the government had given companies the option to switch to a lower basic rate of 22 percent from 30 percent. The corporate tax collected so far this financial year, as mentioned by Sitharaman, is 15 percent higher than the government’s revised estimate of Rs 6.35 lakh crore for FY22.

Detailed explanation-5: -A beneficial CIT rate of 15% (plus surcharge of 10% and applicable health and education cess of 4%) with effect from tax year 2019/20 for newly set-up domestic manufacturing companies can be availed.