The government has foregone nearly ₹99,000 crore in revenue during the 2023-24 fiscal year due to tax incentives provided to corporates, PTI reported Minister of State for Finance Pankaj Chaudhary.
The minister, in a written reply at the Rajya Sabha, provided estimates of the revenue lost due to tax incentives, including various corporate tax deductions, from FY 2019-20 to 2023-24.
The government waived ₹98,999 crore tax revenue in 2023-24, compared to ₹88,109 crore in 2022-23 and ₹96,892 crore in 2021-22.
In the fiscal years 2020-21 and 2019-20, the total amount of corporate tax revenue foregone was ₹75,218 crore and ₹8,043 crore, respectively.
The minister shared the data on corporate tax revenue foregone, in response 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.
Chaudhary said that the estimated revenue foregone for the financial year 2024-25 till date is not available.
Since 2016, corporate tax rates have gradually decreased as exemptions and incentives are phased out.
The Finance Act, 2016, lowered corporate tax rates to 29% of total income with the aim to encourage growth, increase investment, and generate more employment.
The corporate tax rate was lowered to 25 per cent of total income in 2017, with the goal of benefiting smaller domestic companies with an annual turnover of ₹50 crores and making it more attractive for firms to adopt a company structure.
In September 2019, the government announced a reduction in the base corporate tax rate, lowering it to 22 per cent from 30 per cent for existing companies. For new manufacturing firms incorporated after October 1, 2019, the rate was decreased to 15 per cent from 25 per cent, on the condition that they forgo all exemptions and incentives.
Under the Finance Act, 2024, tax rates on the income of foreign companies, excluding those charged at special rates, have been reduced from 40 per cent to 35 per cent to encourage investment and employment.
