ᱚᱲᱟᱜ ᱥ,ᱴᱟᱨᱴᱟᱯ ᱨᱚᱢᱯᱟᱱᱤ ᱠᱚ ᱞᱟᱹᱜᱤᱫ ᱠᱚᱨᱯᱚᱨᱮᱴ ᱴᱮᱠᱥ ᱵᱮᱱᱟᱣ ᱠᱚ ᱵᱩᱡᱷᱟᱹᱣ

To address the slowdown in the economy, the Finance Minister recently announced a swerve of measures. These include the slashing of tax rates applicable on domestic companies and newly incorporated manufacturing companies. The Taxation Laws (Amendment) Ordinance, 2019 was promulgated on September 20, 2019. The Ordinance amends the Income Tax Act, 1961, and the Finance (No. 2) Act, 2019. The Ordinance provides domestic companies with an option to opt for lower tax rates, provided they do not claim certain deductions. It also amends certain provisions regarding levy of surcharge on income from capital gains.

ᱠᱚᱢᱯᱟᱱᱤ ᱠᱩ ᱨᱮ ᱴᱮᱠᱥ ᱨᱮᱭᱟᱜ ᱫᱚᱨ ᱫᱚ ᱱᱚᱣᱟ ᱞᱮᱠᱟ ᱛᱮ ᱟᱨᱩ ᱦᱩᱭᱩᱜ-ᱟ:

++: Surcharge plus Cess

• Surcharge: The amount of income-tax shall be increased by a surcharge at the rate of 7% of such tax, where total income exceeds one crore rupees but not exceeding ten crore rupees and at the rate of 12% of such tax, where total income exceeds ten crore rupees. However, the rate of surcharge in case of a company opting for taxability under Section 115BAA or Section 115BAB shall be 10% irrespective of amount of total income. The surcharge shall be subject to marginal relief, which shall be as under:

i. Where income exceeds INR 1 crore but not exceeding INR 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of INR 1 crore by more than the amount of income that exceeds INR 1 crore

ii. Where income exceeds INR 10 crore, the total amount payable as income-tax and surcharge shall not exceed total amount payable as income-tax on total income of INR 10 crore by more than the amount of income that exceeds INR 10 crore

• Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge

*      ᱟᱱᱩᱵᱷᱟᱜ 115ᱵᱤ. ᱮ. ᱮ. ᱟᱨ ᱵᱟᱝ ᱱᱩᱵᱷᱟᱜ115 ᱵᱤ. ᱮ. ᱵᱤ. ᱨᱮᱭᱟᱜ ᱩᱫᱷᱥ ᱞᱟᱹᱜᱤᱫ ᱢᱚᱴ ᱟᱨᱡᱟᱣ ᱨᱮᱭᱟᱜ ᱜᱚᱴᱟ ᱦᱚᱪᱚᱣᱟᱜ ᱜᱚᱴᱟᱣᱟᱜ ᱛᱟᱨᱤᱠᱟ:

The total income of the company should be computed:

• Without claiming deduction under the following provisions:

ᱚ. ᱣᱤᱥᱮᱥ ᱟᱨᱛᱷᱤᱠ ᱴᱚᱴᱟ ᱠᱩ ᱨᱮ ᱱᱟᱣᱟ ᱮᱥᱛᱷᱟᱯᱤᱛ ᱤᱠᱟᱤ ᱠᱩ ᱥᱟᱦᱟᱸᱣ ᱛᱮᱭᱟᱜ ᱫᱷᱟᱨᱟ 10AA

ᱠᱷ. ᱚᱫᱷᱤᱱᱤᱭᱚᱢ ᱨᱮᱭᱟᱜ ᱫᱷᱟᱨᱟ 32 (1) (iia) ᱨᱮᱭᱟᱜ ᱥᱟᱦᱟᱸᱛᱮᱭᱟᱥᱜ ᱢᱟᱱ ᱧᱩᱨ ᱵᱷᱟᱛᱛᱟ

ᱥᱤ. ᱫᱷᱟᱨᱟ 32 ᱚᱫᱷᱤᱱᱤᱭᱚᱢ ᱨᱮᱭᱟᱜ ᱮ. ᱰᱤ. – ᱛᱤᱱᱟᱹᱜ ᱜᱟᱱ ᱨᱟᱡᱭ ᱨᱮ ᱟᱫᱷᱤᱥᱩᱪᱤᱛ ᱛᱟᱭᱚᱢ ᱟᱠᱟᱱ ᱡᱟᱭᱜᱟ ᱨᱮ ᱱᱟᱣᱟ ᱯᱟᱞᱟᱸᱴ ᱟᱨ ᱢᱤᱥᱤᱱ ᱠᱮ ᱨᱮᱭᱟᱜ ᱴᱟᱠᱟ ᱞᱟᱜᱟᱣ ᱜᱮᱫ

ᱰᱤ. ᱟᱫᱷᱤᱱᱤᱭᱚᱢ 33 ᱫᱷᱨᱟ ᱨᱮᱭᱟᱜ ᱮ. ᱵᱤ. – ᱪᱟᱭ/ ᱠᱤᱯᱷᱤ/ ᱨᱚᱵᱚᱲ ᱞᱟᱦᱟᱣᱟᱜ ᱠᱷᱟᱛᱟ ᱵᱟᱵᱚᱛ ᱛᱮ

ᱤ. ᱟᱫᱷᱤᱱᱤᱭᱚᱢ33 ᱫᱷᱟᱨᱟ ᱨᱮᱭᱟᱜ ᱮ. ᱵᱤ. ᱮ. –ᱥᱟᱤᱴ ᱵᱟᱦᱟᱞᱤ ᱯᱷᱟᱸᱰ

ᱮᱯᱷ.. ᱫᱷᱟᱨᱟ 35(1) (ii), (iia), (iii) ᱟᱨ 35(2ᱮ. ᱮ.), (2ᱮ. ᱵᱤ.) ᱟᱫᱷᱤᱱᱤᱭᱚᱢ ᱨᱮᱭᱟᱜ – ᱛᱤᱱᱟᱹᱜ ᱜᱟᱱ ᱥᱟᱸᱲᱮᱥᱤᱥᱢᱟᱹ ᱛᱚᱞᱟᱥ ᱦᱟᱛᱟᱣ ᱠᱷᱚᱨᱚᱪ

ᱡᱤ. ᱟᱱᱩᱵᱷᱟᱜ 35ᱟᱫᱷᱤᱱᱤᱭᱚᱢ ᱨᱮᱭᱟᱜ ᱮ. ᱰᱤ. –ᱵᱤᱥᱮᱥ ᱵᱮᱯᱟᱨ ᱨᱮ ᱠᱷᱚᱨᱚᱪ ᱨᱮᱭᱟᱜ ᱥᱚᱢᱵᱚᱸᱫᱷ ᱨᱮ ᱜᱮᱫ

ᱟᱫᱷᱤᱱᱤᱭᱚᱢ 35 ᱫᱷᱟᱨᱟ ᱨᱮᱭᱟᱜ ᱥᱤ. ᱥᱤ. ᱥᱤ. ᱪᱟᱥᱵᱟᱥ ᱯᱟᱥᱱᱟᱣ ᱯᱨᱚᱡᱮᱠᱴ ᱨᱮ ᱠᱷᱚᱨᱚᱪ

ᱟᱤ. ᱚᱫᱷᱤᱱᱤᱭᱚᱢ 35 ᱫᱷᱟᱨᱟ ᱨᱮᱭᱟᱜ ᱥᱤ. ᱥᱤ. ᱰᱤ. – ᱠᱚᱥᱟᱞ ᱵᱤᱠᱟᱥ ᱯᱨᱚᱡᱮᱠᱴ ᱨᱮ ᱠᱷᱚᱨᱚᱪE

ᱡᱮ. ᱡᱚᱠᱷᱮᱡ VIᱮ. ᱨᱮᱭᱟᱜ ᱵᱷᱟᱜ ᱥᱤ. ᱵᱷᱤᱛᱤᱨ ᱢᱮᱫ ᱟᱫᱷᱤᱱᱤᱭᱚᱢ ᱠᱷᱚᱱ ᱪᱷᱟᱰᱟ 80 ᱡᱮ. ᱡᱮ. ᱮ. ᱮ. ᱫᱷᱟᱨᱟ ᱨᱮᱭᱟᱜ ( ᱱᱚᱣᱟ ᱠᱟᱹᱢᱤᱭᱟ ᱠᱮᱣᱟᱜ ᱨᱚᱡᱜᱟᱨ ᱥᱚᱢᱵᱚᱸᱫᱷ ᱨᱮ ᱜᱮᱫ)

• ᱵᱮᱜᱚᱨ ᱡᱟᱦᱟᱱ ᱱᱩᱠᱥᱟᱱ ᱛᱮ ᱵᱮᱭᱥᱮᱣ ᱫᱚ ᱯᱟᱦᱤᱞ ᱥᱮᱨᱢᱟ ᱠᱷᱚᱱ ᱱᱚᱣᱟ ᱦᱚᱫ ᱦᱟᱵᱤᱜ ᱵᱟᱲᱦᱟᱣᱟ ᱡᱮ ᱱᱚᱣᱟ ᱞᱮᱠᱟᱱᱟᱜ ᱦᱟᱱᱤ ᱢᱮᱱᱟᱜ-ᱟ ᱨᱮ ᱠᱚᱢ ᱨᱮ ᱡᱟᱦᱟᱱ ᱞᱟᱹᱜᱤᱫ ᱡᱮᱢᱮᱫᱟᱨ ᱠᱟᱱᱟᱭ
• ᱠᱷᱚᱱᱰ ᱫᱟᱨᱟᱭ ᱛᱮ ᱢᱟᱱ ᱧᱩᱨ ᱨᱮᱭᱟᱜ ᱫᱟᱵᱤ ᱞᱟᱹᱜᱤᱫ 32 ᱫᱷᱟᱨᱟ ᱫᱟᱨᱟᱭ ᱛᱮ ᱢᱮᱱᱟᱥᱜ-ᱟ ᱢᱟᱱ ᱧᱩᱨ ᱡᱷᱟᱲᱟ 32(1)(iia) ᱱᱚᱣᱟ ᱫᱟᱨᱟᱭ ᱛᱮ ᱜᱚᱴᱟ ᱟᱠᱟᱫ ᱚᱫᱷᱤᱱᱤᱭᱚᱢ ᱨᱮ ᱜᱚᱴᱟ ᱦᱩᱭᱩᱜ-ᱟ

ᱮᱥᱴᱟᱨᱴ ᱞᱟᱹᱜᱤᱫ ᱱᱚᱣᱟ ᱨᱮᱭᱟᱜ ᱪᱮᱫ ᱢᱟᱱᱮ ᱠᱟᱱᱟ?

• ᱥᱴᱟᱨᱴᱟᱯ ᱠᱚᱢᱯᱟᱱᱤ ᱛᱮᱭᱟᱨ ᱚᱰᱚᱠ ᱨᱮ ᱡᱮᱦᱮᱲ/ ᱟᱨᱡᱟᱣ ᱚᱫᱚᱠ ᱟᱨ ᱥᱮᱴ-ᱟᱯ ᱨᱮ ᱞᱟᱜᱟᱣ ᱟᱠᱟᱱᱟ ᱟᱨ 1 ᱢᱟᱨᱪ 2016ᱨᱮ ᱟᱨ ᱵᱟᱝ ᱛᱟᱭᱚᱢ ᱛᱮ ᱧᱩᱛᱩᱢ ᱚᱞ ᱦᱚᱪᱚ ᱟᱠᱟᱱᱟ:

ᱮ. ᱱᱚᱣᱟ ᱟᱱᱩᱵᱷᱟᱜ ᱨᱮ ᱮᱢ ᱟᱠᱟᱱ ᱛᱷᱟᱹᱰ ᱟᱨ ᱜᱮᱫ ᱨᱮᱭᱟᱜ ᱞᱟᱵ ᱦᱟᱛᱟᱣ ᱛᱟᱭᱚᱢ25%ᱨᱮᱭᱟᱜ ᱟᱫᱷᱟᱨ ᱫᱚᱨ ᱨᱮ ᱢᱟᱥᱩᱞ ᱨᱮᱭᱟᱜ ᱴᱟᱠᱟ ᱮᱢ. ᱮᱢ. ᱮ. ᱴᱤ. ᱫᱚ 15% ᱨᱮᱭᱟᱜ ᱫᱚᱨ ᱵᱟᱹ.ᱥᱟᱹᱣ ᱨᱮ ᱵᱟᱦᱟᱞᱚᱠ ᱟ

ᱵᱤ. ᱟᱫᱷᱟᱨ ᱫᱚᱨ ᱢᱟᱥᱩᱞ ᱮᱢ 22% ᱵᱮᱜᱚᱨ ᱡᱟᱦᱟᱱ ᱪᱷᱟᱹᱰ ᱟᱨ ᱜᱮᱫ ᱨᱮᱭᱟᱜ ᱞᱟᱵ ᱦᱟᱛᱟᱣ. ᱮᱢ. ᱮ. ᱴᱤ ᱫᱚ ᱵᱟᱝ ᱵᱟᱦᱟᱞ ᱠᱮᱭᱟ

• ᱥᱴᱟᱨᱴᱟᱯ ᱛᱮᱭᱟᱨ ᱠᱟᱨᱢ ᱟᱠᱴᱩᱵᱟᱨ ᱛᱟᱭᱚᱢ ᱛᱮ ᱥᱟᱢᱤᱞ1, 2019 ᱟᱨ ᱢᱟᱨᱪ ᱠᱷᱚᱱ ᱢᱟᱲᱟᱝ ᱪᱟᱞᱟᱣ 31,2023

ᱠ. 15% ᱨᱮᱭᱟᱜ ᱟᱫᱷᱟᱨ ᱫᱚᱨ ᱨᱮ ᱢᱟᱥᱩᱞ ᱨᱮᱭᱟᱜ ᱴᱟᱠᱟ ᱮᱢ ᱦᱚᱪᱚ ᱞᱟᱹᱜᱤᱫ ᱪᱷᱟᱹᱰ ᱟᱨ ᱵᱟᱝ ᱯᱨᱚᱛᱥᱟᱦᱱ ᱨᱮᱭᱟᱜ ᱞᱟᱵ ᱵᱟᱠᱚ ᱦᱟᱛᱟᱣᱮᱠ ᱟ. ᱮᱢ. ᱮ. ᱴᱤ ᱫᱚ ᱵᱟᱝ ᱵᱟᱦᱟᱞ ᱠᱮᱭᱟ

ᱠᱷ. 25% ᱨᱮᱭᱟᱜ ᱵᱟᱹᱭᱥᱟᱹᱣ ᱫᱚᱨ ᱨᱮ ᱢᱟᱥᱩᱞ ᱨᱮᱭᱟᱜ ᱴᱟᱠᱟ ᱮᱢ ᱞᱟᱹᱜᱤᱫ ᱪᱷᱟᱹᱰ ᱟᱨ ᱯᱨᱚᱛᱥᱟᱦᱱ ᱧᱟᱢᱚᱜ ᱟ. ᱮᱢ. ᱮ. ᱴᱤ. ᱫᱚ 15% ᱨᱮᱭᱟᱜ ᱫᱚᱨ ᱵᱟᱹ.ᱥᱟᱹᱣ ᱨᱮ ᱵᱟᱦᱟᱞᱚᱠ ᱟ

• ᱥᱴᱟᱨᱴ ᱟᱯ ᱠᱚᱢᱯᱟᱱᱤ ᱠᱚ, ᱪᱮᱛᱟᱱ ᱪᱷᱟᱰᱟ, ᱵᱟᱨᱭᱟ ᱮᱯᱮᱴᱟᱜ ᱢᱮᱱᱟᱜ ᱟ:

ᱚ. ᱵᱤᱱᱮ ᱡᱟᱦᱟᱱ ᱪᱷᱩᱴ ᱟᱨᱵᱟᱝᱠᱷᱟᱱ ᱜᱮᱫ ᱨᱮᱭᱟᱜ ᱞᱟᱵᱷ ᱦᱟᱛᱟᱣ, 22% ᱫᱟᱨᱟᱭ ᱛᱮ ᱫᱚᱨ ᱨᱮ ᱴᱮᱠᱥ ᱨᱮᱭᱟᱜ ᱵᱷᱩᱜᱛᱟᱱ ᱦᱩᱭᱩᱜ-ᱟ. ᱮᱢ. ᱮ. ᱴᱤ ᱫᱚ ᱵᱟᱝ ᱵᱟᱦᱟᱞ ᱠᱮᱭᱟ

ᱵ. ᱱᱚᱣᱟ ᱠᱩ ᱚᱱᱩᱵᱷᱟᱜ ᱨᱮ ᱥᱚᱫᱚᱨ ᱟᱠᱟᱱ ᱪᱷᱩᱴ ᱟᱨᱵᱟᱝᱠᱷᱟᱱ ᱜᱮᱫ ᱨᱮᱭᱟᱜ ᱞᱟᱵᱷ ᱦᱟᱛᱟᱣ ᱯᱚᱨᱮ 25% ᱫᱟᱨᱟᱭ ᱛᱮ ᱫᱚᱨ ᱨᱮ ᱴᱮᱠᱥ ᱨᱮᱭᱟᱜ ᱵᱷᱩᱜᱛᱟᱱ ᱢᱮ. ᱮᱢ. ᱮ. ᱴᱤ. ᱫᱚ 15% ᱨᱮᱭᱟᱜ ᱫᱚᱨ ᱵᱟᱹ.ᱥᱟᱹᱣ ᱨᱮ ᱵᱟᱦᱟᱞᱚᱠ ᱟ

Macro level Impact

The major tax rate cut offered for setting up new manufacturing firms will act as a key incentive for the expansion and growth of the manufacturing sector in the Country, thereby boosting Make in India. It would also encourage foreign companies to set up manufacturing units in the Country as their entities in India are classified as domestic companies for the purpose of taxation and can thus enjoy the benefit of lower taxation rates.

The tax relief will further encourage private companies to redirect their savings from the saved tax outflow into capital expenditure, business expansion and declaration of dividends through higher profit margins or pass back the benefits to the consumer to bring back the demand.

ᱠᱟᱨᱮᱯᱚᱴᱚᱴ ᱢᱟᱥᱩᱞ ᱨᱮᱭᱟᱜ ᱫᱚᱨ ᱠᱮ ᱛᱮᱢᱤ ᱟᱨ ᱞᱟᱭ ᱩᱫᱩᱜ ᱮᱴᱟᱜ ᱵᱟᱸᱪᱟᱣ ᱥᱚᱨᱠᱟᱨ ᱟᱤ. ᱮᱱ. ᱟᱨ.1.45 ᱞᱟᱠᱷ ᱠᱟᱨᱚᱲ ᱨᱮᱭᱟᱜ ᱨᱟᱡᱥᱣ ᱞᱚᱥᱠᱟᱱ ᱨᱮᱭᱟᱜ ᱦᱟᱨᱟᱢ ᱦᱩᱭᱩᱜ ᱟ.