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Government has unveiled a detailed roadmap to phase out tax exemptions for the corporate sector and bring down its tax rate from 30 to 25 percent. Finance Ministry said in a release that Profit linked, investment linked and area based deductions will be phased out for both corporate and non-corporate tax payers.
Finance Minister Arun Jaitley had announced in his last Budget speech that the rate of corporate tax would be reduced to 25 per cent over the next four years along with corresponding phasing out of exemptions and deductions. He had said, this is a step towards simplification of tax laws, which is expected to bring about transparency and clarity.
According to a proposal of Central Board of Direct Taxes (CBDT), sunset clauses with regards to tax exemptions will be renewed and no weighted deduction will be allowed for any specified business activity from April 1, 2017 onwards. The government has invited comments from stakeholders within 15 days.
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