Following the FM's announcement on the corporation tax rate for existing firms being reduced from 30 per cent to 22 per cent, with effect from April 1, 2019, the effective tax rate (inclusive of surcharge) now stands at 25.2 per cent.
At the same time, the tax rate for new manufacturing firms registered after October 1 has been reduced from 25 per cent to 15 per cent, giving a big boost to Prime Minister Narendra Modi's 'Make in India' initiative. The effective tax rate including surcharge for these companies now stands at 17 per cent.
This benefit is available to firms that commence production on or before March 31, 2023. With this, the new tax rates now bring India broadly in line with its South-East Asian counterparts.