Steven ZeniosAlongside this announcement, a $20 billion boost has been given to encourage economic expansion as it faces a six-year low. These announcements are part of setting goals that are in place to boost demand and investment following a 5% growth at the end of June.
This reduction of tax makes India level with other Asian rates thus making the location a more desirable place to invest. This incentive comes as an important tome as many are searching for alternative investment destinations due to the issues caused but the US-China trade war.
“In order to promote growth and investment, a new provision has been inserted in the Income Tax Act with effect from the fiscal year 2019-20,” Ms. Sitharaman said
With this new provision, the government has estimated tax revenue of 16.5 trillion rupees in the year to March.
“We are conscious of the impact all this will have on our fiscal deficit,” commented Ms. Sitharaman who has set the target to reduce the budget gap to 3.3% this year.
The new provision also states that manufacturing companies that are created by October 1 will be provided with the option of 15%. The tax rate for new manufacturing firms will be 17% inclusive of tax and surcharge according to Sitharaman.
