Finance Minister Arun Jaitley today proposed to lower corporate tax rate to 25 percent for businesses with turnover up to Rs 250 crore.
"This will benefit entire MSME sector which accounts for 99 percent of companies filing taxes," Jaitley said while announcing the 2018-19 Budget.
The estimates of revenue foregone due to this measure is Rs 7,000 crore in 2018-19.
However, for businesses with over Rs 250 crore turnover 30 percent tax remains.
"The lower corporate tax will leave businesses with an investable surplus and create more jobs," Jaitley said. Lowering of corporate tax is in tune with Jaitley's promise in 2015-16 Budget.
In the 2015-16 Budget, Jaitley had announced that the corporate tax rate would be gradually lowered to 25 percent from existing 30 percent over the next four years.