At the end of the first year of Modi 2.0, it is time to look back at the government’s economic performance. Interestingly, in the first year major political decisions have overshadowed the economic decisions. That said, several significant steps were taken to counter the persistent slowdown in the economy and undertake much-need reforms.One major step was the Taxation Laws (Amendment) Bill, 2019, to replace the Taxation Laws (Amendment) Ordinance. It allows domestic companies to pay 22 percent tax if they are not availing any incentive or exemptions. It also stipulated that manufacturing companies set up after October 1, 2019, will pay 15 percent tax.The start-ups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) were finally exempted from the much-resented angle tax. The Minimum Alternate Tax (MAT) was reduced from 18 percent to 15 percent, and various concessions were extended on the capital gains. The rationale was to make India an attractive destination for the investment by bringing its tax rates nearer to the international level.Close While this reduction was long overdue, concerns were raised regarding the timings as India was amidst a slowdown and government revenues were already under pressure. Mere reduction in tax rates in… Read full this story
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