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<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> </head> <body> <div style="font-family:Verdana, Geneva, sans-serif; font-size:12px; text-align:justify"> <table width="800" border="0" style="border:1px solid #ccc;padding:5px;" align="center" cellpadding="6" cellspacing="0"> <tr> <td align="left" valign="top"> <br /> <br /><br /> Parliament Passes Taxation (Amendment) Bill, 2019 Replacing the Ordinance Promulgated by President in September, 2019<br /><br /> - (05 Dec 2019)<br /><br /> </td> </tr> <tr> <td align="left" valign="top"></td> </tr> <tr> <td align="left" valign="top" style="background-color:#FDEDCE"><strong>Rajya Sabha has cleared the Taxation Laws (Amendment) Bill, 2019, replacing an Ordinance that was used to slash corporate tax rates to stimulate growth. The Lok Sabha has already passed the Bill and the Upper House cleared the legislation with voice vote without any changes. The Taxation Laws (Amendment) Bill, 2019 will amend the Income Tax Act, 1961 (IT Act) and the Finance (No 2) Act 2019. It replaces the Ordinance which was promulgated by the President in September. Economic developments after the enactment of the Finance (No. 2) Act, 2019 (Finance Act) 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. These could have been achieved through amendment to the IT Act or to the Finance Act. <br><br> The Bill aims to bring in more investment in the manufacturing sector by bringing down corporate tax rate to 22% without incentives. However, this can be availed only if the companies are not claiming deductions under the IT Act. As of now, domestic companies with an annual turnover of up to Rs. 400 crore are paying income tax at the rate of 25%. For an annual turnover above Rs. 400 crore, the tax rate is 30%. Further, companies will not be required to pay Minimum Alternate Tax. In order to provide relief to listed companies, the buy-back tax on shares of listed companies introduced through the Finance Act will not apply to buy-backs in respect of which public announcement were made before 5th July, 2019.<br><br> Further, for giving boost to ‘Make-in-India’ initiative of the Government, another new provision has been inserted allowing 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 Government is continuously taking steps to facilitate production and GDP growth of the economy. The decision will not only infuse confidence in the Corporate Sector but also encourage in promoting “Make in India” initiative.</strong></td> </tr> <tr> <td align="left" valign="top" ><strong></strong></td> </tr> <tr> <td align="left" valign="top" ><strong>Tags : Bill, Clearance, Corporate tax rate, Slashing of</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <!--<td><strong>Source : <a target="_new" href="http://www.manupatrafast.com/">newsroom.manupatra.com</a></strong></td>--> <td align="left" valign="top"><strong>Source : newsroom.manupatra.com</strong></td> </tr> <tr> <td align="left" valign="top"> </td> </tr> <tr> <td align="left" valign="top">Regards</td> </tr> <tr> <td align="left" valign="top">Team Manupatra</td> </tr> <tr> <td align="left" valign="top"> </td> </tr> </table> </div> </body> </html>