Budget Expectations: The Center may re-introduce the business tax concession program at a rate of 18%.
Budget Expectations: The Union Budget 2025-26 may bring corporate tax concession on setting up of new manufacturing units, in a bid to boost manufacturing in the country, sources told Zee Business.
The central government is mulling these permits for inspectors and the upcoming Budget may announce these measures, according to sources.
Previously, the government provided a similar tax concession program, allowing a concessional tax rate of 15 percent for companies establishing new production units, from October 2019 to March 2024.
However, a new system along the same lines would allow approval at a rate of 300 points above the previous rate of 15 percent.
The program could be restarted with a concessional tax rate of 18 percent instead of 15 percent, sources said.
The news comes at a time when India is expecting the Narendra Modi government’s first Budget 3.0 in a full year after the 2024 general elections.
Normally, the Finance Minister presents the Union Budget for the next financial year in Parliament on the first day of February.
Developing the manufacturing sector in the country has been one of the areas that the government has focused on in the past few years.
In the July Budget, the Minister of Finance announced a number of measures aimed at giving the country’s manufacturing sector a more holistic view, including employment-related benefits aimed at supporting workers and employers alike.
The July Budget placed special emphasis on micro, small and medium enterprises (MSMEs) and manufacturing, especially labor-intensive manufacturing.
The central government has come up with a package that includes financial support, regulatory reforms and technical support for MSMEs to help them grow and compete globally.
It has announced a loan guarantee scheme to facilitate long-term loans to MSMEs for the cost of machinery and equipment without collateral or third party guarantee. It also introduced a separate self-financing guarantee fund to provide guarantee cover of up to Rs 100 crore to each applicant under certain conditions.
The government has also doubled the Mudra loan limit Rs 20 lakh from Rs 10 lakh for entrepreneurs who have availed and successfully repaid previous loans under ‘Tarun’ category.
