New Delhi, Feb 2 (KNN) In an effort to reduce tax burden on MSMEs and to create large-scale employment, government in the Union Budget 2018-19 announced measures to extend the benefit of reduced rate of 25% to companies who have reported turnover up to Rs.250 crore in the Financial Year 2016-17.

“This will benefit the entire class of micro, small and medium enterprises which accounts for almost 99% of companies filing their tax returns,” the Finance Minister said. 

Commenting over the proposal, Himanshu Verma, Employment Expert, Udai Foundation said that the immediate assessment of the budget with regard to taxation doesn’t show any big announcements for the stakeholders.

“While the corporate tax cap of 25 per cent for MSMEs with turnover of Rs 250 crore can be seen a welcoming move, yet it is not going to help the economy in long run”.

Commenting over the announcement, Dr Yerram Raju, Economist said that increasing the threshold under the norm is going to benefit only a section of the industry and not necessarily all the MSMEs.

“The corporate tax provision announced by Finance Minister Jaitley touches only 1.8 per cent of the industries”, Raju said.

MSME Body FISME has welcomed extending reduced corporate IT rate of 25% to companies having turnover up to Rs. 250 crore. However, the federation said that the benefit of reduced corporate income tax will be available to only companies and not proprietorship/ partnership firms which constitute 97% of MSME sector. (KNN/DA)