Kolkata: Union Finance Minister Sitaraman announced the reduced of corporate tax rates for companies by almost 10% to 25.17%.

        The new structure will be put into practice from April 1^st 2019, on the condition that companies will not avail any other incentive or concession such as the tax holiday enjoyed by units in SEZ and accelerated depreciation. The effective tax rate for existing units, after considering surcharges and cess such as Swachh Bharat cess and education cess, which are levied on top of the income and corporate tax rates, will be 25.17% as compared to 39.94% now. For new units it will be 17.01% as opposed to 29.12% now. The FM hoped that the latest measures will promote growth and investment. She said the government is conscious of the impact this will have on fiscal deficit, but will reconcile the numbers.

           The fresh dose of fiscal measures, which have gone down well with industry and banking circles, will cost the government Rs. 1.45 lakh crore in revenue annually. It may potentially derail the country’s fiscal deficit roadmap.

            The corporate rate structure in India now stands at par with Asian peers like China, South Korea and Indonesia.