On 1 February 2022, the Union Budget for 2022-23 was presented by the Finance Minister Ms. Nirmala Sitharaman. The budget includes the following key tax proposals:
- The deadline for starting manufacturing/production to claim the 15% reduced tax rate for domestic companies has been extended by one year to March 31, 2024.
- Newly incorporated manufacturing entities would also be allowed an additional year’s extension with regard to the time for the start of manufacturing to qualify under the concessional tax regime.
- Previously, dividends received by an Indian company from a foreign subsidiary or company in which it owned at least 26% were taxed at a reduced rate. The reduced tax rate of 15% on foreign dividends would be repealed.
- No deduction of amounts paid to research associations, universities, colleges, etc. is allowed unless that institution/company provides a statement of donation. This change is retroactive to AY 2021-22.
