India: Lowering of Corporate Income Tax is on the Cards

Asian markets are fiercely competing with one another to attract foreign investment into their countries. India’s expected decision to lower corporate tax from 30 to 25 percent is seen as a positive step to remain competitive with other major Asian economies, especially China.


India’s Finance Minister, Mr. Arun Jaitley, has apprised that the corporate tax rate would gradually decrease in phases over the next four years. This phased reduction is planned to give the companies an advance notice to avoid any sudden surprise and instability in tax policy. Thus, the proposed tax rate will take effect from India’s next financial year, effective April 1st, 2016.

The tax rate cut might come with a clause to remove any existing tax exemptions for the companies. This is to make the rules more transparent. Foreign companies will have to wait for the actual bill to come to determine their net saving.

Industry, at large, is upbeat because this would leave them with more cash to invest and to expand. That will, perhaps, also encourage them to continue to stay in India.

The information shared in this article provides guidance, not advice. If  you need help or more details for better understanding of the key changes in the corporate income tax in India or doing business in India, please contact us below or call +1-408-913-9130 to speak to our experts.