The government is reportedly considering reintroducing a concessional corporate tax rate of 18% in the upcoming Union Budget 2025, CNBC-TV18 reported, citing sources. This move follows demands from several industry leaders urging the revival of the scheme to boost investments and economic activity.
The proposed rate of 18% would be slightly higher than the earlier concessional rate of 15% introduced in 2019. This scheme was initially aimed at incentivizing new domestic manufacturing companies incorporated after October 1, 2019, provided they commenced operations by March 31, 2023. At that time, the concessional rate was significantly lower than the general corporate tax rate of 22%.
In February 2023, the government extended the 15% concessional rate for new manufacturing units by a year, setting the deadline for March 2024. However, the scheme was subsequently phased out and ceased in 2024.
According to CNBC-TV18, the proposal to reintroduce the concessional tax rate is under active discussion within the North Block and the Prime Minister’s Office (PMO). If implemented, this move could provide a much-needed impetus to India’s corporate sector and attract fresh investments, particularly in manufacturing.
The reintroduction of the concessional tax rate will likely be a key focus area as stakeholders and policymakers deliberate on Union Budget 2025 proposals.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice.
