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<ul><li>If IT majors opt for this lower corporate tax of 22%, then they will have to let go of tax exemptions they have been enjoying so far. </li><li>Currently, most IT companies enjoy tax exemptions under Section 10AA of the Income Tax Act for revenues from special economic zones (SEZs). </li><li>Kotak equities believes that Infosys may possibly choose to adopt the new corporate tax rate and let go of all exemptions. </li><li>TCS’ effective tax rate will remain unchanged in the current financial year. Same holds true for Mindtree, says Kotak. </li></ul> India Inc is busy celebrating the Finance Minister’s corporate tax rate cut. For IT companies, this rate cut comes with a rider. If TCS, Wipro, Mindtree, Infosys and others opt for this lower corporate tax of 22%, they will have to let go of tax exemptions they have been enjoying so far. Currently, most IT companies enjoy tax exemptions under Section 10AA of the Income Tax Act for revenues from special economic zones (SEZs). “Companies will have to decide whether taxes paid in India are less than or more than the revised effective tax rate, if it is the latter they may forgo the current SEZ exemptions and transition to new (lower) corporate tax rate in India,” says a report by Kotak Institutional Equities. To take or not to take There are a few two to three factors that might help Indian IT companies decide. One is the tax that is payable on other income — most IT companies are flush with capital which is deployed in mutual funds, fixed deposits and other debt instruments. In addition, most technology companies have overseas earnings and the accounting structures might help them decide which way to go. “We believe that Infosys’ India tax rate will be over 26%. The company may possibly choose to adopt the new corporate tax rate and let go of all exemptions. Wipro’s India tax rate is close to 21-22%. Yet the company’s effective tax rate (ETR) will reduce by 1-2%,” says Kotak. “TCS’ effective tax rate will remain unchanged in the current financial year. Same holds true for Mindtree. Impact for other companies will vary but will not be meaningful,” the report added. Due to marginal benefit, tech majors have always been seeking a reduction in minimum alternate tax (MAT) instead. SEZs attract a MAT of 21.5%, and any reduction in this would have a greater impact on the technology majors in India.

TCS, Wipro and Infosys have a problem—to take the corporate tax cut or not

New Delhi, Dec 7 () Finance Minister Nirmala Sitharaman on Saturday said the government is working on more steps, including rationalisation of personal income tax rates, to revive the sagging economy.
 The GDP growth slowed down to more than six-year low of 4.5 per cent in the second quarter of the current fiscal from 5 per cent recorded in the first quarter.
 The government has taken several measures during August and September to boost the economy, she said at the HT Leadership Summit here.
 Besides, she said, the public sector banks have disbursed nearly Rs 5 lakh crore without compromising on prudential norms in the last two months to boost consumption in the hinterland.
 "So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," she said.
 Asked if there could be more measures announced to bolster economic activity, she said, "If I say yes, it will be when and if I say yes it's also going to be back to me saying are you not too close to the budget. So I don't want to say yes although I am wishing I can say. At the same time, I will not say no, because we are working on more."
 When asked if the government is considering rationalisation of the personal income tax rate for putting more money in the hands of people, the Finance Minister said, "One among many things that we are thinking of."
 Following the reduction in corporate tax in September, there has been a growing demand for a slash in the personal income tax to buttress consumption.
 In the biggest reduction in 28 years, the government in September slashed corporate tax rates up to 10 percentage points as it looked to pull the economy out of a six-year low growth with a Rs 1.45 lakh crore tax break.
 Base corporate tax for existing companies has been reduced to 22 per cent from 30 per cent, and to 15 per cent from 25 per cent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.
 Assuring that there will be no harassment of taxpayers, Sitharaman said the intent of the government is to further simplify taxation systems including removal of exemption.
 Citing the example of corporate tax, she said, "From now on, they're moving towards a greater simplified and exemption free. Therefore, has harassment-free therefore subjective interpretation free taxation regime."
 Besides, she said the government has introduced faceless assessment of direct tax and soon this will be introduced in indirect tax to eliminate harassment.
 On the Goods and Services Tax (GST) the Finance Minister said, the rate structure will have to be decided by the GST Council.
 Eventually, the rates have to be rationalised and the entire tax system has to be simplified, she added.
 "One, the tax per se, is getting complicated because of this unstructured bringing down of rates. Another, it's also getting complicated because you want to be sure that you're doing everything correct, but ending up asking for so much more information in a technology-driven system. People just get fed up of wanting to give so much information. So, we have problems in both the hands," she said.
 With regards to apprehension raised on the genuineness of data, the Finance Minister said, "There's no doubt, we need to bring credibility back to the data."
 The government is aware of the debate which is going on on data and its credibility, she said, adding, the intention is to make sure that any kind of inappropriate methodology which is coming into the data will have to be addressed.
 "So we will have to work towards better credibility, we have to work towards making available data without any obstruction," she said.
 Asked how she reacts to criticism of her at various quarters, she said "I don't allow it to worry me. I'm not inhuman I do sometimes do get affected by it, but I suppose it's part of the job. So, I can't really wish it away. It comes, let it keep coming. I handled it." DP DP MR
MR

Govt working on more measures to boost economy; income tax rate cut under consideration: FM

New Delhi, May 22 () Finance Minister Nirmala Sitharaman on Friday said the RBI's decision to cut the benchmark lending rate will make loans affordable amid the COVID-19 crisis. The RBI on Friday reduced the repo rate by 40 basis points to a historic low of 4 per cent, besides extending loan moratorium for all retail and commercial borrowers by another three months till August 31. "The RBI decision, not just this one even earlier, has been very timely, well thought through and made a lot of difference then and I guess even now it will make a lot of difference to the sentiment which prevails and also immediately make affordable liquidity available," Sitharaman told DD News. "The extension of the moratorium is something which all of us have waited for, and I only welcome the decision of the RBI like the last time. It is timely and purpose serving," she added. DP ABM ABM

RBI's rate cut will make loans affordable: FM 

New Delhi, Dec 5 () Following are the top business stories at 1830 hours:
 
DEL75 BIZ-2NDLD RBI
RBI unexpectedly hits pause on interest rate cut; lowers FY20 GDP growth forecast to 5%
Mumbai: The Reserve Bank of India on Thursday unexpectedly hit a pause button on cutting interest rate as it gave more importance to prevailing inflation pressure and rising food prices over a worrying slowdown in the economy. 
 
DEL107 RS-FM-TAX
Software development, mining, printing books not to qualify for lower 15 pc corp tax rate: FM
New Delhi: Finance Minister Nirmala Sitharman on Thursday said the lower 15 per cent tax rate for new manufacturing companies will not apply to computer software development, mining and printing of books.
 
DCM13 BIZ-RBI-PPI
RBI proposes new prepaid card for transactions up to Rs 10,000
Mumbai: The Reserve Bank on Thursday proposed to introduce a prepaid payment instrument (PPI) that could be used only for transactions of goods and services worth up to Rs 10,000.
 
BCM18 DAS-PMC
Forensic audit on PMC scam expected by month-end: Das
Mumbai: Reserve Bank governor Shaktikanta Das on Thursday said the forensic audit report on the scam-hit PMC Bank is expected by the month-end, and efforts are also on
to assess the realisable value of assets held by the cooperative that can be monetised.
 
BCM15 DAS-FISCAL-GOVT
Good coordination with govt on policy measures: Das
Mumbai: Reserve Bank Governor Shaktikanta Das on Thursday said there is good coordination between the fiscal and monetary policies so far, in addressing growth
concerns and that the central bank is not worried about government missing fiscal deficit target.
 
BCM5 BIZ-DAS-FOREX
Forex kitty hits a new high, sniffs at $452 b
Mumbai: Foreign exchange reserves continue the upward journey surging to a new high of USD 451.7 billion as of December 3, Reserve Bank governor Shaktikanta
Das said on Thursday.
 
DEL98 BIZ-LD STOCKS
Sensex slips as RBI surprises with status quo; bank stocks bear the brunt
Mumbai: Equity benchmarks closed lower in topsy-turvy trade on Thursday after the Reserve Bank unexpectedly left interest rates unchanged amid slowing growth.
 
BCM25 RBI-HDFC-BANK-NET-BANKING
RBI looking at HDFC Bank net banking glitches: Deputy Guv Jain
Mumbai: A Reserve Bank team is analysing the reasons behind the crash of online banking facility of HDFC Bank for two consecutive days this week, deputy governor
MK Jain said on Thursday. 
 
DEL105 BIZ-LD RUPEE 
Rupee rebounds 24 paise as RBI maintains accommodative stance
Mumbai: The Indian rupee rose sharply in the last hour of trade to settle 24 paise higher at 71.29 to the US dollar on Thursday after the RBI promised to continue with accommodative stance in its monetary policy. 
 
DCM23 RSQ-BASE YEAR-GDP
Base year for GDP revised due to socio-economic changes: Rao Inderjit Singh
New Delhi: The government on Thursday said base year for calculating gross domestic product was changed to 2011-12 due to a change in the socio-economic environment of the country.
 
DEL114 RS-TAX-NOD
Rajya Sabha nod to lower corporate tax rates
New Delhi: The Rajya Sabha on Thursday gave its consent to the Taxation Laws (Amendment) Bill, 2019, replacing an ordinance that was used to slash corporate tax rates to stimulate growth. 
 
 
 
 
 
 
 
 
 
 
 
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Business highlights

<ul><li>Any new domestic company incorporated on or after Oct 1, 2019, making fresh investment in manufacturing, has an option to pay income tax at 15%.</li><li>The effective tax rate on Indian companies will be about 17% once the surcharge is added.</li><li>This is the biggest tax reform in India in many years and as big as the one rolled out by Donald Trump in US in 2017.</li></ul>The Indian government's ₹1.45 trillion stimulus has sparked a historic rally in Indian markets. The sweeping cuts in corporate tax rates in India will boost profitability for all Indian firms. Not just that, any company in India can bring down its tax liability to half. Finance Minister Nirmala Sitharaman said that any new domestic company incorporated on or after October 1, 2019, making fresh investment in manufacturing, has an option to pay income tax at 15%. The effective tax rate will be 17.01% once the surcharge is added compared to the nearly 35% that is the rate currently. The only condition is companies will have to give up exemptions and incentives. One can set up a new subsidiary and avail the new tax rate, Sudhir Kapadia, partner at EY, told a television channel. The only condition is that it has to be fresh investment. "This is as big as the tax reform in US in 2017," Kapadia added referring to the massive tax cuts announced by Donald Trump after he took over as American President. This will provide an incentive for companies to route their fresh investments into new companies and the government would hope that this will generate more employment. SEE ALSO: <a href="https://www.businessinsider.in/markets/economy/india-cuts-corporate-tax-rates-to-end-the-economic-spiral-and-unleash-the-markets-animal-spirits/articleshow/71214158.cms" data-type="tilCustomLink" target="_blank">India cuts corporate tax rates to end the economic spiral and unleash the market's animal spirits</a>

Here's how Indian companies can halve their effective tax rate

<ul><li>Both Sensex and Nifty gave up the initial gains as <keyword id="129243" type="PERSON" weightage="20" keywordseo="Nirmala-Sitharaman">Nirmala Sitharaman</keyword> delivered her budget speech.</li><li>The Benchmark index gave up the morning gains and fell to the day's low, down over 400 points by 1:30 pm. </li><li>The tax on the country's super rich has dampened sentiment in India's equity markets.</li></ul>Finance Minister Nirmala Sitharaman's first budget for the Narendra Modi government's second term cut down the tax on 99% of all firms in the country, proposed to infuse fresh money into the banks, helped assuage a lot of fears around the solvency of some good shadow banks, helped small taxpayers with sops on home loans and promised to make room for corporate borrowing in India by taking a part of the government borrowing abroad. All of these lifted the market's spirits but it all came crashing down as soon as she proposed more tax on the country's super rich. The impact on people earning ₹2 crore to ₹5 crore a year will be 3% and 7% on those earning more than ₹ 7 crore. Market fears this will further worsen the exodus of millionaires from India into tax havens. More money supply Banking stocks jumped as Sitharaman announced fresh capital infusion plan for PSU banks of ₹70,000 crore. She also proposed to take away the regulation housing finance companies from the National Housing Board, and hand it over to the RBI in the wake of the recent crisis. The Finance Minister also proposed to improve the liquidity in the market and reduce the panic with the following measure. "For purchase of high-rated pooled assets up to ₹100,000 crore, government will give PSU banks one-time partial guarantee for loss up to 10%, Sitharaman said. Sitharaman has proposed that government will borrow money abroad in foreign currency because India's sovereign debt to GDP ratio is among the lowest in the world, less than 5% of GDP. When the government borrow from banks in India, as it has done so far, it reduces the amount available for other businesses. When the borrowing is high, it increases the lending rates for the private enterprise. Now, if government takes part of its loans abroad, it will reduce the pressure liquidity in the domestic market. Lesser corporate tax Budget has also proposed 25% corporate tax on companies with revenue up to ₹400 crore, up from the earlier threshold of ₹250 crore. To tackle the rising corporate debt, the FM said that stock exchanges should allow AA rated bonds as collateral. She also called for regulators to come together. "There should be inter-operability between Reserve Bank of India (RBI) and Securities and Exchange Board of India (SEBI) which will allow retail investors to invest in treasury bills," Sitharaman said in her speech. Railways infrastructure boost In a big boost to railway stocks, the government has proposed to open up the crucial railway sector to private partnerships to fast-track infrastructure development. Sitharaman also promised to start a railway station modernisation programme this year. FM says Central government's land parcels across the country can be used to develop affordable housing and public infrastructure. They can be used in the form of joint development and provide concessions. She also announced pension benefits to retail traders. with annual turnover less than ₹1. 5 crore. SEE ALSO: <a href="https://www.businessinsider.in/budget/income-tax-bank-recap-air-india-and-5g-spectrum-sale-in-finance-minister-nirmala-sitharamans-first-budget-speech/articleshow/70081328.cms" data-type="tilCustomLink" target="_blank">Income tax , bank recap, Air India, and 5G spectrum sale are some things to watch out for in Finance Minister Nirmala Sitharaman's first budget speech</a> <a href="https://www.businessinsider.in/defence-budget-2019-20indias-defence-budget-has-nearly-doubled-in-5-years/articleshow/70037360.cms" data-type="tilCustomLink" target="_blank">India’s defence budget has nearly doubled in 5 years but the money is not enough to upgrade the weapons</a> <a href="https://www.businessinsider.in/niti-aayog-wants-education-budget-to-increase-further/articleshow/69941463.cms" data-type="tilCustomLink" target="_blank">India’s education budget has improved over the years — but it’s still too low</a> <a href="https://www.businessinsider.in/health-budget-2019-india-might-increase-spending-on-healthcare-but-that-may-not-be-enough/articleshow/69956156.cms" data-type="tilCustomLink" target="_blank">India might increase spending on healthcare but that may not be enough</a>

The tax on super rich makes Nirmala Sitharaman's budget a bitter one for the market

New Delhi, Feb 1 () With an aim to boost listing of bonds at IFSC exchange, the government has proposed to reduce the withholding tax rate to 4 per cent from 5 per cent on interest payment on bonds listed on its bourse.
 The move will attract more international investors at IFSC exchange.
 "In order to incentivise listing of bonds at IFSC exchange, I propose to further reduce the withholding rate from 5 per cent to 4 per cent on interest payment on the bonds listed on its exchange," Finance Minister Nirmala Sitharaman Sitharaman said in her Budget speech in Parliament.
 India International Exchange (India INX) MD and CEO V Balasubramaniam said that the budget announcement by the government to reduce the withholding tax from 5 per cent to 4 per cent for IFSC exchange listed bonds will be "an immense boost to all issuers and will immensely help them in attracting more international investors".
 Withholding tax is levied by countries on interest or dividends paid to a person who is resident outside that country.
 India INX has already listed medium-term note (debt) program worth USD 47 billion dollars (about Rs 3.33 lakh crore) with drawdown of USD 18.5 billion dollars till date.
 "This announcement should greatly incentivise issuers to choose India INX as the preferred platform for listing their international bonds and masala bonds," he added.
 The country's only International Financial Services Centre (IFSC) is in GIFT City near Ahmedabad in Gujarat.
 GIFT City is an emerging global financial and IT services hub, a first of its kind in India, designed to be at par with globally benchmarked business districts. It is supported by state-of-the-art infrastructure encompassing all basic urban infrastructure elements along with an excellent external connectivity.
 Companies from financial services, technology and all other services sector are targeted as potential occupants within the city. SP 
RVK

FM proposes to cut withholding tax to boost listing of bonds at IFSC exchange

Mumbai, Mar 11 () Amidst calls for the Reserve Bank to cut policy rates to boost growth in the wake of the coronavirus outbreak, SBI economists doubted the efficacy of rate cuts in invigorating demand, saying a better tool can be reducing indirect taxes which can automatically lift consumer sentiment. "Though the RBI is likely to bite the bullet to cut the rates to stimulate demand at next policy review, it is unlikely to result in any material impact on invigorating demand... but a combination of a larger rate cut and/or indirect tax rate cut can be better policy options," SBI Research said in a note on Wednesday. Their view was based on the analysis of credit data of top six banks, constituting three public sector banks and three private sector banks which constitute 52 per cent of total bank credit as of March 2019. Both private and public sector banks are seeing robust growth in retail segment at 15.7 per cent and 12.8 per cent, respectively. In case of top eight state-run banks, corporate credit declined by Rs 81,535 crore between December 2018 and December 2019, while during the same period the top three private banks' corporate pie grew by Rs 1.04 lakh crore. It said a rate cut is unlikely to work in isolation as bank transmission of RBI's rate cut has been slow. While RBI cut the rates by 135 bps to 5.15 per cent between February and October 2019, the transmission in the 1-year median MCLR till February 20 was only 59 bps. But for corporates, fresh rupee loan rates came down by 45 bps till January, while the same on outstanding rupee loans decreased by 11 bps. With the pace of deposit rate cuts picking pace (SBI cut rates again on Wednesday), transmission can be faster. Most banks, including private are now cutting aggressively. The spread between the term deposit rates and savings rate limits the scope, however, of increased cuts in term deposits rate. Had the government followed the formulas strictly, rates on different small savings instruments would now have been lower by 80-160 bps. In FY19, the incremental small saving deposits were 24 per cent of incremental bank deposits. If deposit rates are cut further, this can lead to clamour for withdrawals and exacerbate the situation, it warned. With the financial savings rate already not very high and the negativity around deposits, the tax concessions that the budget has proposed to eliminate might also add fuel to the fire. Already retail investors have gone searching for better returns and have burnt their fingers, the report added. BEN ABMABM

SBI says tax cuts, and not rate cuts, can lift consumption

(Eds: Adding more info) New Delhi, Jun 19 () Finance Minister Nirmala Sitharaman on Friday said the government is monitoring progress of various relief measures, especially the transmission of repo rate cuts to corporates and consumers to stimulate the economy, hit by COVID-19 crisis. While interacting with the Managing Committee Members of PHD Chamber of Commerce and Industry through video conferencing, she said the government has always recognised the importance of wealth creators as they generate employment opportunities and utilise resources in optimal manner for promoting the socio-economic development in the country. Sitharaman acknowledged that the Prime Minister has always facilitated a helping hand and recognised importance of MSMEs, an official statement from the ministry said. "We are closely monitoring the situation in consultation with banks so that relief measures announced by the Government are effectively percolated at ground levels especially the transmission of repo rate cuts to consumers in terms of reduced interest rates," the release quoted her. Last month, the RBI slashed the benchmark repurchase (repo) rate, the price at which banks borrow from the central bank, by 40 basis points to a historic low of 4 per cent. RBI Governor Shaktikanta Das had said monetary policy transmission to banks' lending rates has continued to improve. "The 1 year median marginal cost of funds-based lending rate (MCLR) declined by 90 bps (February 2019-May 15, 2020). The weighted average lending rate (WALR) on fresh rupee loans has cumulatively declined by 114 bps (basis points) since February 2019, of which 43 bps decline occurred in March 2020 alone," he had said. The Finance Minister said that they are closely watching the developments in disbursement of loans under the provision of Rs 3 lakh crore collateral free automatic loans for businesses to mitigate the daunting impact of COVID-19 on trade and industry. The government has always focused on minimum government and maximum governance with a special focus on addressing challenges faced by industry and promote ease of doing business, she said. The government has always provided a helping hand without differentiation to all industry stakeholders especially to MSMEs. PHD Chamber of Commerce and Industry termed Rs 20.97 lakh crore stimulus package comprehensive and substantial. The package is not only the monetary and financial stimulus, but also contains the game changing reforms to take India to the next high, it said. The chamber suggested that one-time restructuring of the loans without affecting the classification for the severely impacted sectors such as tourism, aviation, entertainment, real estate, and automobile, among others is the need of the hour. There may be a formal communication from the government to the banking sector to remove the fears from the minds of bankers so that the bank officials are able to sanction and disburse loans to the trade and industry without any fear, the chamber suggested. It also said that there may not be any criminal proceedings if some business entity turns into NPA because of some genuine reason. Besides the Finance Minister, Revenue Secretary Ajay Bhushan Pandey, Financial Services Secretary Debasish Panda, Corporate Affairs Secretary Rajesh Verma and Chief Economic Adviser Krishnamurthy Subramanian were present. DP BAL BAL

Govt closely monitoring repo rate cut transmission by banks to customers: FM

New Delhi, Jun 19 () Finance Minister Nirmala Sitharaman has assured that she will ensure banks pass on the rate cut benefits to consumers, so the interest burden on them eases, industry body PHDCCI said on Friday. She was addressing members of the PHD Chamber of Commerce through a video conference here. "Hon'ble @FinMinIndia @nsitharaman assured that she will personally ensure that #banks transfer benefits of the #ratecuts to end consumers at the earliest," PHDCCI said in a tweet. Last month, the RBI slashed the benchmark repurchase (repo) rate, the price at which banks borrow from the central bank, by 40 basis points to a historic low of 4 per cent. RBI Governor Shaktikanta Das had said monetary policy transmission to banks' lending rates has continued to improve. "The 1 year median marginal cost of funds-based lending rate (MCLR) declined by 90 bps (February 2019-May 15, 2020). The weighted average lending rate (WALR) on fresh rupee loans has cumulatively declined by 114 bps since February 2019, of which 43 bps decline occurred in March 2020 alone," he had said. The finance minister also assured that the government will continue to respect and facilitate the wealth creators of India to restore job creation and promote Economic growth. "Hon'ble @FinMinIndia @nsitharaman request @phdchamber to continue its good to work in sending continuous representations to improve &amp; restart the industry effectively &amp; continue development &amp; economic growth of #India," it said. Maximum governance and minimum government intervention is the main objective promoted by the government, she said. The industry body further said that the Finance Minister accepted "@phdchamber suggestions for creating #technology upgrading fund to promote the use of better technology in #Indianindustry for better #economicgrowth &amp; development". DP BAL BAL

Will ensure banks pass on rate cut benefits to consumer: FM to India Inc

Finance Minister <a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Arun Jaitley</a> rolled out the <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget 2017</a>, which focussed mainly on the poor and recovery. 
 
The <a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi&amp;sortorder=effectivedate">Prime Minister Narendra </a><a href="http://www.businessinsider.in/searchresult.cms?query=prime+minister+narendra+modi&amp;sortorder=effectivedate">Modi</a>-led Indian Government was looking to soothe pains of the common man after the demonetisation burns and the finance minister announced few tax concessions for the common man. 
 
While announcing the <a href="http://www.businessinsider.in/searchresult.cms?query=income+tax&amp;sortorder=effectivedate">tax measures</a>, Jaitley said the income tax rate for people earning income between Rs 2.5 lakh and Rs 5 lakh will be 5%. Presently, it is at 10%. 
 
Also, the FM has levied a surcharge of 10% on people earning an income between Rs 50 lakh and Rs 1 crore. Also, 15% surcharge on income above Rs 1 crore will continue. 
 
“We are committed to make our tax rates reasonable, tax administration fairer and tax base wider. We are largely a tax non-compliant society and the burden of tax evaders falls on honest tax payers,” said Jaitley, while presenting the Budget 2017-18. 
 
He said the growth rate in advance tax for personal income in last three quarters in current year is at historic high of 34.8% due to government’s efforts. 
 
Jaitley also announced one page I-T return form for individuals with less than Rs 5 lakh income. 
 
Also, the net revenue loss on direct tax proposals amounts to Rs 20,000 crore and the net tax revenue grew by 17% in 2015-16.

Relief for the common man! Income tax for people earning Rs 2.5 lakh-Rs 5 lakh reduced to 5%

<ul class="summary-list"><li>Many CEOs are fighting President Joe Biden's planned corporate tax hike.</li><li>CEOs surveyed by Business Roundtable say reversing Trump's 2017 cuts boosted growth and employment.</li><li>Data disagrees, showing the Trump cuts did little to stimulate the US <keyword id="34412" type="ORGANIZATION" weightage="100" keywordseo="economy">economy</keyword> despite costing trillions.</li></ul>The inflation debate is dead. Long live the tax-hike debate.President Joe Biden's spending spree was just getting started when he signed a $1.9 trillion stimulus into law on March 11. The administration now aims to spend <a href="https://www.businessinsider.com/biden-infrastructure-bill-package-4-trillion-with-tax-hikes-2021-3">up to $4 trillion more</a>, split between two <keyword id="17408" type="PERSON" weightage="60" keywordseo="infrastructure">infrastructure</keyword> packages.Included in the proposal are <keyword id="494122" type="PERSON" weightage="60" keywordseo="tax-hikes">tax hikes</keyword> set to offset most of the new spending. Biden aims to lift the corporate tax rate to 28%, implement a global minimum corporate tax rate, and lift federal income taxes on households earning more than $400,000. The measures would undo some of the key elements of President Donald Trump's 2017 <keyword id="44809" type="PERSON" weightage="60" keywordseo="Tax-cuts">tax cuts</keyword>, which is setting up a new argument between economists and business leaders.In one corner, 98% of CEOs surveyed by the Business Round Table said Biden's proposed hikes <a href="https://www.businessinsider.com/biden-tax-plan-corporate-rate-increase-jobs-wage-growth-survey-2021-4">would have a "moderate" to "very" significant negative impact</a> on competitiveness. About 66% said the changes would stifle wage growth in the US, and more than seven in 10 said it would make hiring more difficult."As we look toward recovering from the COVID-19 pandemic, keeping competitive tax policies in place is needed to help reinvigorate the US economy and lead to more opportunity for Americans," Gregory J. Hayes, chief executive of Raytheon and chair of the Business Round Table Tax and Fiscal Policy Committee, said in a <a href="https://www.businessroundtable.org/business-roundtable-survey-finds-corporate-tax-increases-would-weaken-us-business-expansion-hiring-investments-in-rd-and-innovation">statement</a>.The 2017 cuts drove economic growth before the pandemic, dragged the unemployment rate to a 50-year low, and lifted middle-class wages, Hayes added.Senate Minority Leader Mitch McConnell echoed the CEOs on Tuesday, saying a reversal from Trump's policy will do far more harm than good."This tax bill of 2017 undone would create an extensive loss of jobs in our country, do exactly the wrong thing, and move us in the wrong direction."Economists largely disagree. The previous president's cuts padded balance sheets while doing little to solve tax avoidance, Nobel laureate Paul Krugman said in a New York Times <a href="https://www.nytimes.com/2021/04/09/opinion/trump-corporate-tax-reform.html">blog post</a> published Friday.Strong demand, not lower tax rates, was the primary factor lifting business investment after 2017, economists at the International Monetary Fund said in a 2019 <a href="https://www.imf.org/en/Publications/WP/Issues/2019/05/31/U-S-46942">paper</a>. The investment response to the 2017 cuts was also smaller than those seen after previous cuts, they added.<div type="image" title="Mitch McConnell" height="1333" width="1778" msid="82056427" hostid="261"></div><h2>What happened to the rocket fuel?</h2>To be exact, Trump deemed his tax cuts "<a href="https://www.wsj.com/articles/trump-says-tax-cuts-will-supercharge-economic-growth-1506703428">rocket fuel for our economy</a>" that would kickstart a "rebirth of American industry." That rebirth did not arrive, as evidenced by various indicators of economic growth and labor-market health.To start, connecting the tax cut to the record-low unemployment rate seen before the pandemic ignores several previous years of growth. The expansion that ended in March 2020 predated Trump by several years and was the longest in US history; job creation from 2012 to 2019 trended at about 2 million to 2.5 million nonfarm payrolls per year.And after the 2017 tax cut? Job gains in 2018 were only slightly higher than those seen the year prior, and they actually went down in 2019 to the lowest since 2011, signaling the tax cut didn't spark a hiring spree.The unemployment rate <a href="https://www.businessinsider.com/march-jobs-report-916000-payrolls-unemployment-rate-economic-recovery-infrastructure-2021-4">tells a similar story</a>. The headline gauge's pace of decline was roughly the same after 2017 despite Republicans touting the cuts as a boon for the labor market.Trump also claimed his tax policy would supercharge business investment, but data details an increase that paled in comparison to prior expansions. Domestic business investment climbed by roughly $251 billion from the first quarter of 2017 to its peak in the first quarter of 2019. Yet gains were just as large and more sustained during the dot-com boom of the 1990s and in the immediate wake of the financial crisis.Productivity did increase in the years after the tax cut, but the trajectory only tells half of the story. The gauge - which measures output per hour of labor - remains well below levels seen just before the financial crisis and the peak seen after the 1990s expansion.As for Biden and his corporate tax hike? He's arguing for an expanded definition of infrastructure that includes mass availability of high-speed broadband and an electrified federal fleet. Time will tell whether the policy can drive the kind of growth Trump promised, or the kind that corporate leaders are still claiming was exceptional, data notwithstanding.But with the Biden administration claiming its infrastructure plan will create millions of jobs, Democrats argue it's high time the government gets its shot at providing the kind of "rocket fuel" that could create a stronger economy.

CEOs say the Trump tax cut created the best economy ever. The data disagrees.

New Delhi, Feb 1 () Following are the top business stories at 1842 hours
 
DEL158 BIZ-2NDLD BUDGET
Sitharaman cuts income tax, abolishes DDT; to spend more on agri, infra to boost growth
New Delhi: Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals, abolished dividend tax for companies and announced record spending in agriculture and infrastructure sectors to pull out the economy from its worst slowdown in more than a decade.
 
DEL146 BIZ-LD STOCKS
Budget blow for D-St: Sensex sinks 988 pts; Rs 3.46 lakh cr investor wealth wiped off
Mumbai: The Sensex logged its biggest single-day plunge in more than a decade on Saturday after the Union Budget failed to live up to market expectations of growth-boosting measures and fiscal discipline.
 
DEL122 BUD-INDUSTRY-REAX
India Inc terms Budget as growth provoking, says implementation crucial
New Delhi: India Inc on Saturday termed the Budget as "growth provoking and welfare inducing" but said that urgent implementation of the measures proposed will be crucial for achieving desired outcomes, while acknowledging that Finance Minister Nirmala Sitharaman had "little room" to manoeuvre.
 
DEL50 BUD-LIC
LIC to be listed: Sitharaman
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said insurance behemoth LIC will be listed as part of the government disinvestment initiative. 
 
DEL163 BUD-DEPOSIT-INSURANCE 
Govt permits five-fold increase in deposit insurance cover to Rs 5 lakh per depositor
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said the government has permitted DICGC to raise deposit insurance coverage by five times to Rs 5 lakh.

DEL96 BUD-LD DIVIDEND-TAX
Govt removes DDT; dividend to be taxed in hands of recipient
New Delhi: The government on Saturday proposed to remove dividend distribution tax on companies, and henceforth the tax will be shifted to recipients at the applicable rate. 
DEL54 BUD-FPI LIMIT
Plan to hike FPI limit in corporate bonds to 15% from 9%: FM
New Delhi: The government plans to increase investment limit of foreign portfolio investors (FPI) in corporate bonds from 9 per cent to 15 per cent, Finance Minister Nirmala Sitharaman said on Saturday. 
 
DEL124 BIZ-BUD-LD AGRICULTURE
Govt proposes 11pc hike in farm credit for FY21; announces Krishi Udaan &amp; Kisan Rail
New Delhi: The government on Saturday proposed 11 per cent increase in the farm credit target to 15 lakh crore for 2020-21 and announced special rail and flight services for the transportation of farm produce as its seeks to double farmers' income by 2022. 
DCM86 BUD-DISINVESTMENT
Govt pegs Rs 1.20 lakh cr disinvestment mop-up in 2020-21, Rs 65,000 cr in current fiscal
New Delhi: The government on Saturday pegged disinvestment target for 2020-21 at Rs 1.20 lakh crore, nearly double of Rs 65,000 crore it expects to raise in the current financial year. 
 
DEL129 BUD-HOUSING
Budget: Additional deduction of Rs 1.5 lakh on home loan interest extended till March 2021
New Delhi: Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman on Saturday proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year till March 2021. 
 
DEL55 BUD- NOMINAL GDP
Nominal GDP growth for FY21 estimated at 10%: Sitharaman
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said nominal GDP growth for 2020-21 is estimated at 10 per cent.
 
DEL147 BIZ-BUD-EXEMONS
Taxpayer opting for new tax regime to forego deductions on PF, tuition fee, insurance
New Delhi: A taxpayer opting for new income tax slabs and rates will have to forego a host of exemptions and deductions, including a standard deduction of Rs 50,000, tuition fee of children, and contribution towards insurance premium and provident fund.
 
DEL37 BUD-AIRPORTS 
100 more airports to be developed by 2025 to support UDAN scheme: FM
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said 100 more airports will be developed by 2025 to support the UDAN scheme.
 
DEL94 BUD-RUPEE
For every rupee in govt kitty, 64 paise come from taxes
New Delhi: For every rupee in the government coffer, 64 paise will come from direct and indirect taxes, while states' share of taxes and duties is the single-largest expense head accounting for 20 per cent of the total spending, Budget documents showed. 
 
DCM79 BUD-LDALL STARTUP
FM announces host of steps to boost growth of startups
New Delhi: Finance Minister Nirmala Sitharaman on Saturday announced a host of measures including relaxing tax incentives and setting up of investment clearance cell for startups and entrepreneurs with a view to promote their growth.

DCM64 BIZ-BUD-G20
Govt allocates Rs 100 cr to host G-20 Presidency in 2022
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said India will host the G-20 Presidency in 2022 and Rs 100 crore has been allocated for this purpose.
 
DCM90 BUD- LD ALL POWER SECTOR
Budget's push for clean air: Old thermal power plants to shut 
New Delhi: Old coal-fired power plants not meeting emission norms will be closed and their land put to alternative use, Finance Minister Nirmala Sitharaman said on Saturday as she provided Rs 4,400 crore in her Budget for measures to ensure clean air.
 
DCM35 BUD-LD MSME
Govt raises turnover threshold for audit of MSME accounts to Rs 5 cr
New Delhi: The government on Saturday unveiled measures aimed at facilitating growth of the country's micro, small and medium enterprises including raising the turnover threshold for audit of their accounts to Rs 5 crore and a scheme to provide subordinate debt to MSME entrepreneurs. 
 


 
 

 
 
 


 
 
 
 
 

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venue<ul class="summary-list"><li>JPMorgan said the US should increase <keyword id="118200" type="ORGANIZATION" weightage="60" keywordseo="corporate-tax">corporate tax</keyword> rates to catch up to other world economies.</li><li>The US is more focused than other countries on raising <keyword id="6435854" type="DEFINITION" weightage="60" keywordseo="Tax-Revenue">tax revenue</keyword> from personal income and housing.</li><li>Even before the 2017 Trump tax cut, it found US corporate tax revenues lower than the global average.</li></ul>President Joe <keyword id="60973" type="PERSON" weightage="60" keywordseo="Biden">Biden</keyword> kicked off a <a href="https://www.businessinsider.com/biden-infrastructure-corporate-tax-rate-trump-cuts-ceos-economic-growth-2021-4">major debate</a> in early April when he <a href="https://www.businessinsider.com/biden-corporate-tax-hike-infrastructure-big-companies-average-americans-2021-4">proposed</a> raising the <keyword id="955358" type="ORGANIZATION" weightage="60" keywordseo="Corporate-Tax-Rate">corporate tax rate</keyword> from 21% to 28% to fund his $4 trillion infrastructure plan. Now <a href="https://markets.jpmorgan.com/research/email/4t9p2aop/rxiev5oQvMMmbk2pOvmOUg/GPS-3709757-0">JPMorgan has weighed in</a> on the matter and it finds corporate tax revenue is lower in the US than elsewhere, even if the rate is now close to the international average.And as sentiment appears strong in the US that American corporations don't "<a href="https://www.businessinsider.com/nike-fedex-companies-avoid-paying-federal-taxes-report-2021-4">pay their fair share</a>," the bank found that relative to other economies, the US "prioritizes raising tax revenue from personal income and property." In other words, the current American tax system raises more from people's paychecks and real-estate investments than from companies, compared to the rest of the world.JPMorgan's economic research note on Thursday found that prior to President Donald Trump's <a href="https://markets.businessinsider.com/news/stocks/7-charts-showing-trump-tax-cuts-not-economic-rocket-fuel-2019-12-1028780773">2017 tax cuts</a>, the US statutory corporate tax rate of 35% was high compared to other countries, but that law slashed them by 13.2% - the largest decline ever.Furthermore, the bank found that dating back to 2000, revenues actually collected from American corporate <keyword id="6368033" type="UNKNOWN" weightage="60" keywordseo="taxes">taxes</keyword> only represented about 2% of gross domestic product (GDP), versus a 3% average globally. This reflects, the bank said, "a complex system of exemptions and deductions embedded in the US tax code that reduces the corporate tax base and results in corporate taxes contributing a much lower share of total tax revenue in the US than elsewhere."And after the Trump tax cut, this percentage fell to just 1% of GDP. This explains the American reliance on taxing personal income and housing, the note said. "The US stands out as having both the highest share of revenue from personal income (both labor and investment) across the economies we examine, and the smallest share of tax revenue from taxes on goods and services," the note said.While Biden and Democrats have supported raising the corporate tax rate to fund infrastructure, Republican lawmakers oppose doing so. For example, Sen. Roger Wicker of Mississippi, the ranking Republican on the Senate Commerce Committee, said that rolling back Trump's 2017 tax cuts would be "<a href="https://www.businessinsider.com/gop-senator-infrastructure-impossible-sell-roger-wicker-trump-tax-cuts-2021-4">an almost impossible sell</a>" to get bipartisan support.And Insider <a href="https://www.businessinsider.com/senate-gop-infrastructure-plan-romney-road-related-taxes-2021-4">reported</a> on Thursday that a group of Republican senators are drafting their own infrastructure plan - one that would cost between $600 billion and $800 billion, and would be funded without any corporate tax hikes. "My own view is that the pay-for ought to come from people who are using it. So if its an airport, the people who are flying," Sen. Mitt Romney of Utah, who is helping draft the plan, told reporters. "If it's a port, the people who are shipping into the port; if it's a rail system, the people who are using the rails; If it's highways, it ought to be gas if it's a gasoline powered vehicle."But Biden has remained firm on increasing the corporate tax rate to 28%, <a href="https://www.businessinsider.com/biden-corporate-tax-hike-infrastructure-big-companies-average-americans-2021-4">saying in a speech</a> last week that the tax hike would level the playing field for large companies and average Americans.He said: "I'm not trying to punish anybody, but damn it, maybe it's because I come from a middle-class neighborhood, I'm sick and tired of ordinary people being fleeced."JPMorgan doesn't put it in quite those terms, but its note concludes that so-called ordinary people account for a greater share of tax revenue in the US than elsewhere.

You Searched For "fm tax rate cut" and got 14 results

TCS, Wipro and Infosys have a problem—to take the corporate tax cut or not

Katya Naidu

Govt working on more measures to boost economy; income tax rate cut under consideration: FM

PTI

RBI's rate cut will make loans affordable: FM

PTI

Business highlights

PTI

Here's how Indian companies can halve their effective tax rate

Sriram Iyer

The tax on super rich makes Nirmala Sitharaman's budget a bitter one for the market

Sriram Iyer

FM proposes to cut withholding tax to boost listing of bonds at IFSC exchange

PTI

SBI says tax cuts, and not rate cuts, can lift consumption

PTI

Govt closely monitoring repo rate cut transmission by banks to customers: FM

PTI

Will ensure banks pass on rate cut benefits to consumer: FM to India Inc

PTI

Relief for the common man! Income tax for people earning Rs 2.5 lakh-Rs 5 lakh reduced to 5%

Akanksha Jain

CEOs say the Trump tax cut created the best economy ever. The data disagrees.

Ben Winck

Business highlights

PTI

JPMorgan says it's time for US corporate taxes to catch back up with the rest of the world

Ayelet Sheffey

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