Government of India reduces tax rates for companies in India

Last September 20, the Finance Minister of India, Nirmala Sitharaman, announced the introduction of an important new measure to make the Subcontinent increasingly open to international business: the measure provides for the 10% cut in corporate income tax for all companies registered in India (including foreign branches).

The new arrangement, effective from April 1st 2019 (has retroactive effect), has the aim of  grow and attract more investment in India, creating new jobs.

These are the key points of the legislation: 

• Companies incorporated under Indian law which do not enjoy any tax exemption and that they have been established before October 2019: the effective corporate income tax will be 25.17%. Furthermore, the payment of the MAT (Minimum Alternative Tax) will not be required for these companies;

• Indian law company (manufacturers that started production by 31.03.2019) established after 01.10.2019: the tax rate is of 17.01%unless specific exemptions are requested. Also in this case there are no obligations relating to the payment of the MAT;

• Companies that want to pay income taxes following the old rates: taxation and MAT will be calculated on the basis of the tax brackets (turnover and business income) 

Octagona has been present in India for 17 years through its offices New Delhi, Pune and Bangalore in which the local team operates. If you want to find out how to do business in India and for further information on Indian market contact us at telephone number 059.9770184 or send one email to the address [email protected]: you will receive all the information you need.

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