New Delhi, Feb 1 (KNN) The Corporate Tax Rate for micro, small and medium enterprises (MSMEs) has been slashed from 30 per cent to 25 per cent for the companies with less than Rs 50 crore turnover.

In his Budget Speech, Union Finance Minister Arun Jaitley said, “Medium and small enterprises provide maximum employment but end up paying more taxes.”

Announcing 5% tax cut for MSMEs with turnover of Rs 50 cr, Jaitley said, “96% per cent of India’s companies will get the benefit.”

Also, profit linked-deductions for start-ups has been reduced to 3 years out of 7 years and presumption tax rates for units with Rs 2 crore turnovers has been reduced to 6%.

FM Jaitley had also said that the government will encourage Small Industries Development Bank of India (SIDBI) to provide loans at reasonable rate.

The apex industry body for MSME Associations in the country, FISME, welcomed the move.

Reacting to the proposal, Dr. Sangam Kurade, President, FISME said that less than 3% of MSMEs are body corporates under Companies Act because of higher taxation on companies than on individual and firms and that is why while making a presentation before the FM, I had highlighted the issue myself”. 

In the Budget memorandum submitted to the Finance Minister FISME demanded that Income Tax on companies may be levied in slabs as available to individual tax payers. (KNN Bureau)