The FM has endorsed the roadmap for India to become a $5-trillion economy. Some of notable corporate tax proposals are: Corporate Tax Rate: The longstanding demand of India Inc has been to reduce the corporate tax rate, including the abolishment of MAT. The budget has proposed to extend the benefit of concessional corporate tax rate of 25% to companies having a turnover up to Rs 400 crore (for the year ended 31 March 2018) with a coverage of 99.3% of companies. While this is welcome, it stops short of making this an across-theboard cut, which would have brought real cheer. Large companies have been left out of the tax cut although they contribute the maximum in terms of growth, employment and tax payments. The government has committed itself to supporting the startups and taking measures to ensure a conducive growth environment for them. The budget has listed further relaxation of conditions relating to carry forward and setoff of losses and announcements addressing the angel tax issues. Interest income in relation to certain categories of NPAs of NBFCs are also proposed to be taxed in the year of receipt like existing provisions for banks. Purchase of own shares by unlisted companies are taxed at a rate of 20% plus applicable surcharge and cess in the hands of the unlisted companies. Capital gains if any, earned by the shareholders on such buyback of shares are exempted from tax. Given the headwinds the economy is facing, the government has not shied away from partially increasing the coverage of the lower tax rate of 25% and also announced the intent to provide targeted incentives to sunrise sectors. The corporate tax proposals thus align with the vision to propel India to $5-trillion economy and provide such vision with a firm grounding.

(Economic Times)