Corporate tax cuts and growth

Reduced rates will have little impact in the short run, but could have a significant positive impact on growth in the medium term

On September 20, Finance Minister Nirmala Sitharaman announced major changes in the structure of  taxation for large Indian companies: The  basic rate of company income tax was reduced from 30 per cent (35 per cent including cesses and surcharges) to 22 per cent (25 per cent including cesses and surcharges), a new rate of 15 per cent (17 per cent including cesses and surcharges) for new manufacturing companies (set up after  October 1, 2019, and producing before March 31, 2013) was announced and the minimum alternative tax (MAT) rate was cut to 17 per cent (inclusive of cesses and surcharges).