Corporate tax revenue foregone at ₹99,000 crore in FY24: MoS Finance
Corporate tax rates have been gradually reduced since 2016 while phasing out the exemptions and incentives.
In a written reply in the Rajya Sabha, Chaudhary gave the estimated revenue forgone due to the tax incentives by way of various deductions in corporate tax, from FY 2019-20 to 2023-24.
The corporate tax revenue foregone in 2023-24 stood at ₹98,999, followed by ₹88,109 crore and ₹96,892 crore in 2022-23 and 2021-22, respectively.
In 2020-21 and 2019-20, the total corporate tax revenue foregone was ₹75,218 crore and ₹8,043 crore respectively.
The minister was replying to a question from AAP MP Raghav Chadha on the estimated loss to the exchequer due to the corporate tax reductions from 2019-20 to 2024-25, and for the financial year (2024-25).
Estimated revenue foregone for the financial year 2024-25 till date is not available, Chaudhary said.
Through Finance Act, 2016, the corporate tax rates were reduced to 29% of the total income to promote growth, boost investment and create more job opportunities.
In 2017, the corporate tax rates were reduced to 25% of the total income, make smaller domestic companies having annual turnover of ₹50 crores more viable and to encourage firms to migrate to company format.
In September 2019, the government announced a cut in base corporate tax for then existing companies to 22% from 30%; and for new manufacturing firms, incorporated after October 1, 2019, to 15% from 25%, provided they forego all exemptions and incentives.
Vide Finance Act, 2024, tax rates on the income of foreign companies (other than that chargeable at special rates) have been reduced from 40% to 35% to promote investment and employment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
13 hours ago
- Time of India
Arora meets bizmen, gives them a hearing
Ludhiana: Cabinet minister Sanjeev Arora gave a patient hearing to the issues being faced by the industrialists of the city during an interaction with them on the premises of Avon Cycles here Saturday evening. Among the leading industrialists present in the meeting were Onkar Singh Pahwa, Rahul Ahuja, SC Ralhan, JR Singhal, Sanjeev Pahwa, Rajnish Ahuja, Mandeep Pahwa, Arshdeep Singh Sahni, Harsimerjit Singh Lucky, MS Bhogal and Gurmeet Singh Kular. Matters related to GST, PSPCL, freight subsidy, industrial plots, industrial corridor, traffic jams and municipal corporation were taken up. On fake GST billing, Arora asked the industrialists to suggest remedial measures to him so that strict action can be initiated. The minister was told that the industrialists doing genuine business are suffering losses due to fake GST billing. On the industrialists' demand that the GST rate should be reduced from 12% to 5% on bicycles, Arora said when he was a Rajya Sabha MP, he had taken up the matter with Union finance minister Nirmala Sitharaman. He said the state govt has distributed industrial subsidies worth Rs 222 crore in the first four months of the current financial year, and that the remaining subsidies worth Rs 28 crore would be distributed in the near future. Subsidies worth about Rs 80 crore were distributed in the last fiscal, he added. The cabinet minister said the state govt has already set up nine industrial committees for industrial policy enhancement in Punjab, adding that the remaining committees would be announced by next week. The motive of setting up these committees is to gather suggestions from industry experts for strengthening the state's industrial policy and further improving ease of doing business. The industrialists thanked the state govt for taking care of their issues in the last three years. Arora said he has observed that despite Punjab being a landlocked and border state, people from outside are willing to invest here because of the business-friendly ecosystem. He added that the state govt is also trying to make pro-industry policies and boost ease of doing business by ensuring that new units get approvals within 45 days.
The Hindu
18 hours ago
- The Hindu
Punjab's rising debt raises concern amid claims of sound fiscal management
Even as the Punjab government asserts it is taking proactive steps to manage its debt obligations, economic experts have raised concern that the State is increasingly relying on additional loans, driven by 'competitive political populism', leading to a significant rise in debt liability. Earlier this month, Punjab Finance Minister Harpal Singh Cheema stated that the government would borrow ₹8,500 crore in the second quarter of the current financial year to meet redemption obligations of over ₹3,500 crore for 'legacy debt' incurred during the previous Shiromani Akali Dal–Bharatiya Janata Party and Congress governments. A recently published academic paper titled Walking with Punjab's Economy, authored by economist Ranjit Singh Ghuman, notes that steadily rising outstanding debt has pushed Punjab into a debt trap. The annual average increase in debt during the first three financial years of the Aam Aadmi Party (AAP) government (2022–23 to 2024–25) has been ₹33,721 crore. While Punjab's debt liability has shown a steady upward trend over the years, the past decade has seen a particularly sharp rise. The outstanding debt stood at ₹1,28,836 crore in 2015–16 and jumped to ₹1,82,526 crore in 2016–17, largely due to the conversion of ₹30,584 crore in Cash Credit Limit into long-term debt. The debt increased to ₹2,81,773 crore (48.24% of Gross State Domestic Product) in 2021–22, to ₹3,14,221 crore (46.68%) in 2022–23, ₹3,46,185 crore (46.66%) in 2023–24, and further to ₹3,82,935 crore (47.30%) in 2024–25. It is expected to rise to ₹4,17,136 crore (46.80%) by the end of 2025–26. The paper also notes an accelerating trend in average annual debt growth. In the 1980s, it rose by ₹609 crore annually; during 1990–91 to 2001–02, by ₹2,696 crore; and by ₹6,389 crore annually over the next five years. Between 2011–12 and 2021–22, the annual average increase was ₹19,867 crore. 'The annual average increase during the first three financial years of the AAP government (2022–23 to 2024–25) was ₹33,721 crore. During 2025–26, the budgeted increase would be ₹34,201 crore,' the paper states. Pointing out that interest payments accounted for 22.72% of the State's total revenue in 2022–23, and principal repayments took up another 18.37%, Prof. Ghuman, Professor of Eminence (Economics) at Guru Nanak Dev University, Amritsar, said that approximately 41% of total revenue went toward debt servicing. 'Nearly 23% of the revenue was consumed by power subsidy. Salaries, wages, and pensions accounted for about 57.51% (36.72% salaries and wages and 20.82% pensions and retirement benefits). These five heads together consumed nearly 122% of the total revenue, which is a matter of concern as revenue expenditure exceeds the total revenue,' he said. 'All this means the government is running the show by raising additional loans, leading to a high net addition to debt liability,' he added. In the same year, fiscal and revenue deficits were 5.04% and 3.87% of GSDP, respectively. According to Dr. Ghuman, this scenario stems from a mix of 'competitive political populism in the name of welfarism, under-mobilisation of financial resources, injudicious use of resources, pilferage in welfare schemes and over-centralisation of finances by the Union government.' He noted, 'One is not arguing against the welfare responsibilities of the State but only that its policies on freebies and subsidies should be more targeted and given only to the most deserving households.' The Finance Minister has maintained that Punjab's fiscal situation is stable, with the government taking steps to meet future obligations. Mr. Cheema recently said the State had invested ₹1,000 crore each in the Guarantee Redemption Fund (GRF) and the Consolidated Sinking Fund (CSF), the latter now exceeding ₹10,000 crore — up from ₹3,000 crore when the AAP government took office. Expressing concern over the rising debt, Dr. Lakhwinder Singh, visiting professor at the Institute for Human Development, New Delhi, said, 'There's no doubt that the debt situation in Punjab is serious. The average debt has been growing. The government is borrowing to repay the rate of interest and notably, the AAP government has taken the borrowing to the highest. The key problem in Punjab is that the State hardly has the resources to make a new capital investment; hence, the development has come to a near standstill.'
Mint
21 hours ago
- Mint
‘No plan for GST on UPI transactions exceeding ₹2,000', says MoS Finance in Rajya Sabha. What we know…
The Union Minister of State (MoS) for Finance Pankaj Chaudhary has clarified in the Rajya Sabha during the Monsoon Session of Parliament that the government does not intend to charge GST on UPI transactions over ₹ 2,000. Speaking in the Upper House on July 22, while answering questions the minister clarified speculations that the Finance Ministry is plans to impose goods and service tax (GST) on unified payments interface or UPI transactions that exceed ₹ 2,000 in value. 'There is no recommendation of levying GST on UPI transactions of over 2000 from the GST Council,' Pankaj Chaudhary stated on July 22, according to an Economic Times report. He added that GST rates and exemptions are decided on the basis of recommendations of the GST Council, which is a Constitutional body comprising of members from both the Centre and States and Union Territories (UTs), it added. Further, Chaudhary added that the Centre does not foresee revenue shortfall at this stage, and aims to achieve Budget estimate targets for 2025-26. The fiscal deficit for 2025-26 is estimated to be around ₹ 15.69 lakh crore, at 4.4 per cent of GDP. In a written reply in the Rajya Sabha, he said the government supports state finances through Finance Commission grants, Centrally Sponsored Schemes, and Special Assistance as loans to states for capital expenditure. Total-transport-systems-share-price-nse-bse-s0004808" data-vars-anchor-text="Total" data-vars-link-type="Auto" data-vars-page-type="story">'Total resources being transferred to the states, including the devolution of state's share in taxes, grants/loans and releases under Centrally Sponsored Schemes, etc, in Budget Estimates for 2025-26 is about ₹ 25.01 lakh crore,' he added. In reply to another question, Chaudhary said, as per inputs received from Public Sector Banks (PSBs), as on March 31, 2025, 96 per cent staff are in position against their business requirement. 'The small proportion of gap is attributable to attrition on account of superannuation and other usual factors, including unplanned exits. During the last 5 years (FY 2020-25), banks have recruited 1,48,687 employees, and for FY 2025-26, recruitment of 48,570 employees is underway,' he added. Replying to another question, the minister said that insurers are required to decide on the request for cashless authorisation within 1 hour of receipt of such request and grant final authorisation within 3 hours of the receipt of discharge authorisation request from the hospital as per IRDAI Master Circular on Health Insurance Business dated May 29, 2024. 'However, the data related to the average time taken by insurance companies and third-party administrators (TPAs) for the claim settlement is not maintained by IRDAI. IRDAI has informed that during FY 2023-24, 58.39 per cent of total claims were settled through cashless mode in terms of count and 66.16 per cent in terms of amount,' he said.
