Lok Sabha passes Taxation Law Amendment Bill, 2019
The Lower House of the Parliament passed the Taxation Law Amendment Bill, 2019. This seeks to replace the ordinance that was passed in September. The 2019 bill is intended to make amendments to the Income Tax Act of 1961 and the Finance Act (No. 2) of 2019. The provisions of the bill aims to provide options of reduced taxation rate for the domestic manufacturers and hence promote growth and investment. Its provisions include the following:
- From the current taxation rates of 25% (for domestic companies with turnover of up to 400 crore INR) and 30% (other domestic manufacturers), the bill proposes a rate of 22% if the companies agree to not claim certain deductions under the IT act.
- Domestic manufacturing companies set up after September 30th can avail a taxation rate of 15% if they don’t make certain claims of deduction under the IT Act.
- Domestic companies can opt for the new taxation rate system in FY19-20 or other years in the future. Once chosen, it will be applicable for all succeeding years.
- The MAT/ Minimum Alternate Tax will not be applicable to those companies opting for this new tax rate system.