Sitharaman also said that the new provision allows any domestic company to pay income tax at the rate of 22% subject to the condition they will not avail any incentive or exemptions.
Government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.
"We today propose to slash the corporate tax rates for domestic companies and also for new domestic manufacturing companies," Sitharaman told media here."
A new provision has been inserted in the Income Tax Act with effect from the fiscal year 2019-20, which allows any domestic company an option to pay income tax at the rate of 22 per cent subject to the condition that they will not avail any exemptions or incentive," she said.
She went on to highlight that "such companies shall not be required to pay any minimum alternative tax."
Moreover, to attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15 per cent, Sitharaman said.
Sitharaman stated that the corporate tax rate will be 22 per cent without exemptions, inclusive of surcharge and cess. "No Minimum Alternate Tax (MAT) applicable to such companies," she said.