Cabinet approves Taxation Laws Bill, 2019

The Union Cabinet has approved the proposal for introducing the Taxation Laws (Amendment) Bill, 2019 in order to replace the Ordinance. Economic developments after the enactment of the Finance Act, 2019 along with reduction of rate of corporate income tax by many countries world over necessitated the provision of additional fiscal stimulus to attract investment, generate employment and boost the economy.

Daily Current Affairs Quiz 2019

In order to attract fresh investment in manufacturing and provide boost to ‘Make-in India’ initiative of the Government, another provision was inserted to the IT Act, to provide that a domestic manufacturing company set up on or after 1st October, 2019 and which commences manufacturing by 31st March, 2023, may opt to pay tax at 15% plus surcharge at 10% and cess at 4% if it does not claim any incentive/deduction. The effective rate of tax comes to 17.16% for these companies. They would also not be subjected to MAT. In order to stabilise the flow of funds into the capital market, it was provided that the enhanced surcharge introduced through the Finance Act on capital gains arising on account of transfer of listed equity share or certain units which are liable to securities transaction tax will not apply.