Steps taken to boost the economy

Steps taken to boost economy:-

In this critical situation it becomes very important for the government to take some important steps towards the economy to make it alive again and in this way6 on 20 September government has taken very big decisions towards some policies to change it in the view to help investors and companies to establish their self strongly.

I have given the data below of government official talk as it is.

Government has brought in the Taxation Law Ordinance 2019 to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019. This was announced by the Union Minister for Finance & Corporate Affairs Nirmala Sitaraman during the Press Conference in Goa today. The Finance Minister elaborated further, the some features of these amendments, are as follows:-

In order to promote growth and investment, a new provision has been inserted in the Income-tax Act with effect from 2019-20 which allows any domestic company an option to pay income-tax at the rate of 22% subject to condition that they will not avail any exemption in another schemes. The effective tax rate for these companies shall be 25.17% inclusive of surcharge. Also, such companies shall not be required to pay Minimum Alternate Tax.

In order to attract fresh investment in manufacturing and thereby provide boost to ‘Make-in-India’ initiative of the Government, another new provision has been inserted in the Income-tax Act with effect from 2019-20 which allows any new domestic company incorporated on or after 1st October 2019 making fresh investment in manufacturing, an option to pay income-tax at the rate of 15%. This benefit is available to companies which do not avail any exemption/incentive and commences their production on or before 31st March, 2023. The effective tax rate for these companies shall be 17.01% inclusive of surcharge.  Also, such companies not are required to pay Minimum Alternate Tax.

A company which does not opt for the concessional tax regime and avails the tax exemption/incentive shall continue to pay tax at the pre rate. However, these companies can opt for the concessional tax after expiry of their tax exemption period. After this whole process of the option they shall be liable to pay tax at the rate of 22% and option once exercised cannot be subsequently withdrawn. Further, in order to provide relief to companies which continue to avail exemptions/incentives, the rate of Minimum Alternate Tax has been reduced from existing 18.5% to 15%.

In order to make stable the flow of funds into the capital market, it is provided that enhanced surcharge introduced by the Finance Act, 2019 shall not apply on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for securities transaction tax, in the hands of an individual.

The enhanced surcharge shall also not apply to capital gains arising on sale of any security.

In order to provide relief to listed companies which have already made a public announcement of buy-back before 5th July 2019, so they have not give any type of tax related to tax on buy-back of shares in case of such companies.

It is given in a report that after all this a huge loss should be seen in government revenue. According to the official data it is known that there is a total of 1.45 lacks crore of amount loss that government should have to beer. But there is scope of more growth opportunity by this step after all it is needed and I am happy with this step taken by MODI government.