On 1 February 2024, Ms. Nirmala Sitharaman, the Finance Minister of India, presented the interim union Budget for 2024-25 to Parliament. The key tax-related highlights of the Union budget include:
Corporate tax:
- Domestic companies currently in operation will maintain a corporate tax rate of 22 percent.
- Newly established manufacturing firms qualify for a lowered tax rate of 15 percent. Nevertheless, tax specialists have observed that the Union budget documentation does not specify an extension of the scope of Section 115BAB of the Income-tax Act, 1961. This provision provides a favorable tax rate of 15 percent for companies formed after 2019 and initiating their manufacturing operations prior to 31 March 2024.
investment incentives:
- The tax advantages for startups and investments made by sovereign wealth funds and pension funds have been prolonged until 31 March 2025.
- The tax exemption on specific income for certain IFSC units has been extended from 31, March 2024 to 31 March 2025.
