Budget Expectations: Centre may reintroduce corporate tax concession scheme at 18% rate
It's that time of the year when expectations soar about big reforms and tax reliefs in the upcoming Union Budget. The Narendra Modi 3.0 government is all set to unveil its Union Budget for 2025-26 in February. Typically, the finance minister presents the Union Budget in Parliament on the first day of February.
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Budget Expectations: The Union Budget for 2025-26 may bring corporate tax concession on the establishment of new production units, in a bid to boost manufacturing in the country, sources told Zee Business.
The central government is mulling such concessions for assessees and the upcoming Budget may announce such moves, according to the sources.
Earlier, the government provided a similar tax concession scheme, allowing a concessional 15 per cent tax rate for companies setting up new production units, from October 2019 to March 2024.
However, a new scheme along similar lines may allow concession at a rate 300 basis points higher than the earlier rate of 15 per cent.
The scheme can be reintroduced with a concessional tax rate of 18 per cent instead of 15 per cent, said the sources.
The news comes at a time when India awaits the Narendra Modi 3.0 government's first full-year Budget after the 2024 general election.
Typically, the Finance Minister unveils the Union Budget for the next financial year in Parliament on the first day of February.
Boosting the domestic manufacturing sector has been among the government's primary focus areas over the past few years.
In the July Budget, the Finance Minister announced a number of steps aimed at giving a fillip to the country's manufacturing sector, including employment-linked incentives aimed at supporting employees and employers alike.
The July Budget laid special emphasis on micro, small and medium enterprises (MSMEs) and manufacturing, particularly labour-intensive manufacturing.
The central government formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow as well as to compete globally.
It announced a credit guarantee scheme to facilitate term loans to MSMEs for expenses towards machinery and equipment without collateral or third-party guarantee. It also introduced a separate self-financing guarantee fund to provide guarantee cover up to Rs 100 crore to each applicant under certain conditions.
The government also doubled the limit of Mudra loans to Rs 20 lakh from the Rs 10 lakh for entrepreneurs who had availed and successfully repaid previous loans under the ‘Tarun’ category.
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