Skip to main content

SMEs to pay 25% tax even if Rs 50-cr limit crossed in FY17

By
The I-T department today said companies that had a turnover of less than Rs 50 crore in 2015-16 will pay tax at the reduced rate of 25 per cent from April 1 even if they cross the threshold in 2016-17 or subsequent years.
 
Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said the income tax department will come out with a clarification on which companies would be eligible to avail the tax benefit.
 
In order to boost the SME sector, Finance Minister Arun Jaitley in Budget 2017-18 reduced the income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent as against the usual rate of 30 per cent.
 
"If your turnover in 2015-16 was Rs 50 crore then you will be subject to 25 per cent tax. We will come out with clarification on (applicability of the tax benefit to) new companies," Chandra said.
 
According to the memorandum to the Finance Bill 2017, in case of domestic company, the rate of income-tax shall be 25 per cent of the total income if the total turnover or gross receipts in the previous year, 2015-16, did not exceed Rs 50 crore.
 
Concerns have been raised whether a company having breached turnover threshold of Rs 50 crore in 2016-17 or 2017-18 would be entitled to concessional tax rate of 25 per cent.
 
A Finance Ministry official said that those companies that had total income of less than Rs 50 crore in 2015-16 can continue to avail the tax benefit even if the turnover has been breached in subsequent years.
 
However, clarity is still awaited on whether the tax benefit would accrue to the new companies which set up business in 2016-17 or in 2017-18.
 
As per data of Assessment Year 2015-16, there are 6.94 lakh companies filing returns of which 6.67 lakh companies have turnover of less than Rs 50 crore and,  therefore, percentage-wise 96 per cent of companies will get this benefit of lower taxation.
 
"This (decision) will make our MSME sector more competitive as compared to large companies. The revenue forgone estimate for this measure is expected to be Rs 7,200 crore per annum," Jaitley had said earlier. PTI JD CS ADI SA
 
 
07TH FEBRUARY , 2017, INDIA TODAY, NEW-DELHI

Comments

Post a Comment

Popular posts from this blog

Data storage norm splits digital payments industry

By
Data storage norm splits digital payments industry  India’s nascent digital payment industry could be thrown into disarray due to the demand by the Reserve Bank of India (RBI) that all user data be stored within the country, fears an industry grouping, which has termed the decision as “heavy-handed”, even as others, including the country’s largest digital payment provider Paytm, have hailed the move.  In a bid to narrow the growing schism, the industry is planning to send a formal representation to the regulator highlighting its concerns, a top official told ET.  “We are trying to build a consensus on the issue," said the person adding that the representation to the central bank will be ready this week.  RBI on April 6, mandated all payment companies—global and local—to set up data storage facilities within India by October. The stringent six-month deadline has attracted the ire of several sections of the industry that fear it will lead to a disruption of wel...
18 comments
Read more

Sebi to finalise options in commodities today

By
The Commodity Derivatives Advisory Committee of the Securities and Exchange Board of India ( Sebi) will meet on Friday with senior officials of the latter, to give a final shape to the rules on options trading in commodity futures, beside revising the warehousing norms to ensure good delivery on settlement. The decision taken, after discussing with the advisory committee, will be placed before the regulator’s board, to finalise the regulations. According to knowledgeable sources, three commodities in each segment, agricultural and non- agricultural, have been proposed for introducing options. It appears commodities from the soya and guar segments are preferred in the former. From the non- agri segment, it is likely that gold, silver and crude oil will be finalised. All these These have better liquidity and both the National Commodity and Derivatives Exchange and the Multi Commodity Exchange, respectively, will be able to introduce the options. In the equity segments, options ar...
17 comments
Read more

E tailers global warehouses may come under tax net

By
E tailers  global warehouses may come under tax net Warehouses of e-commerce companies based in countries such as Australia, Japan, Italy,  Spain, the Netherlands, and Russia may not be exempted from paying the income tax in India  once the multilateral instrument (MLI) to prevent base erosion and profit shifting (BEPS)  comes into force. BEPS refers to the reporting framework mooted by the Organisation for Economic  Co-operation and Development (OECD) and signed by over 100 countries, including India, to  prevent exploiting gaps and mismatches in tax rules to shift profits by multinational  companies (MNCs) artificially to low-tax regimes. The representatives of 68 countries on June 7 this year signed an agreement (MLI) in Paris  to amend their tax treaties to bring them in alignment with measures to prevent BEPS.  However, there is still time for synchronising tax treaties with the multilateral  instrument. India has submitte...
17 comments
Read more