Lok Sabha Question No. 373 (UNSTARRED), answered on 2026-02-02
Subject: Reduction/Concession in Corporate Tax Rates
Ministry: FINANCE
Asked by: Mr Pathan Yusuf, Shri Sachithanantham R

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA

## UNSTARRED QUESTION NO. 373

## TO BE ANSWERED ON MONDAY, THE 02 nd  FEBRUARY, 2026/ 13 MAGHA, 1947 (SAKA)

' Reduction/Concession in Corporate Tax Rates '

373:  Mr Pathan Yusuf: Shri Sachithanantham R

- (a) the details of corporate tax rates reduced, tax concession, exemptions or regulatory relaxations to corporate entities since the year 2014 including the rate of reductions made each time;
- (b)the amount of revenue foregone due to these measures; and
- (c) the details and the percentage increase in corporate tax and its share in total direct taxes since 2014, year-wise?

## ANSWER

## MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) In the Budget 2015-16, Government had first announced the phased reduction of corporate  tax  from  then  30%  to  25%  along  with  phased  reduction  of  exemptions applicable for companies.
- I.  Details  of  reduction  in  corporate  tax  rates: Vide  successive  Finance  Acts,  the corporate tax rates have been gradually reduced while phasing out the exemptions and incentives available to the corporates. The details of the same are as under:
- (i) Vide Finance Act, 2016, the corporate tax rates were reduced to 29% (plus applicable surcharge or cess) of the total income for the companies having the turnover not more than  five  crore  rupees  to  promote  growth,  boost  investment  and  create  more  job opportunities. Further, section 115BA was inserted providing the corporate tax rates of 25% for the new manufacturing companies set up or registered on or after 01 st  April,2016 and did not avail any incentives or deductions.
- (ii)  Vide  Finance  Act, 2017,  the  corporate tax rates were reduced to 25% of the total income to inter alia make smaller domestic companies having annual turnover of Rs. 50 crores more viable and to encourage firms to migrate to company format. This reduced corporate tax rate was extended to companies having turnover not more than Rs.250 Crore vide Finance Act,2018 and to companies having turnover not more than Rs.400 Crore vide Finance Act,2019.

(iii)  With  an  intent  to  attract  fresh  investments,  create  jobs  and  simulate  the  overall economy, the Taxation Laws (Amendment) Act, 2019 inter alia inserted section 115BAA and section 115BAB in the Income tax Act, 1961.

- Section  115BAA  provides  reduced  tax  rates  of  22%  (effective  rate  25.17% including surcharge and cess) for existing domestic companies not availing any incentive or deduction.
- Section 115BAB provides concessional tax rate of 15% (effective rate 17.16% including  surcharge  and  cess)  for  new  manufacturing  companies  which  have been  set  up  or  registered  on  or  after  01.10.2019  and  which  commenced manufacturing  or  production  by  31.03.2024  and  did  not  avail  any  incentive  or deductions.
- Minimum  Alternate  Tax  (MAT)  on  the  companies  which  continue  to  avail incentives, has been reduced from the prevailing18.5% (plus applicable surcharge and cess) to 15% (plus applicable surcharge and cess).

(iv) Vide Finance (No. 2) Act, 2024, tax rates have been reduced from 40% to 35% on the income of foreign companies (other than that chargeable at special rates) to promote investment and employment.

II.  Details  of  tax  concessions,  exemptions  or  regulatory  relaxations  under  the Income-tax Act,1961: Various exemption and deductions are available under Chapter III  and  Chapter  VI-A  of  the  Income-tax  Act,1961  which  are inter-alia applicable  for corporate  taxpayers  subject  to  conditions  specified  therein.  Major  tax  exemptions, deductions and regulatory relaxations presently applicable for corporate taxpayers are listed in Annexure-A.

- (b) The estimated revenue foregone due to the major tax incentives by way of deductions in  corporate tax, year-wise from FY 2016-17 to FY 2023-24 has been laid before the Parliament as part of Budget documents and the same is tabulated as under:

| Financial year   | Total revenue foregone (Corporate Tax) (in Rs. Crore)   |
|------------------|---------------------------------------------------------|
| 2016-17          | 86,144                                                  |
| 2017-18          | 93,642                                                  |
| 2018-19          | 1,08,113                                                |
| 2019-20          | 94,109                                                  |
| 2020-21          | 75,218                                                  |
| 2021-22          | 96,892                                                  |
| 2022-23          | 88,109                                                  |
| 2023-24          | 98,999 (projected)                                      |

Source-  Receipt  Budget  2016-17,2017-18,2018-19,201920,2020-21,2021-22, 2022-23, 2023-24,2024-25,2025-26

(c) Details and percentage increase in Corporate Tax and its share in total Direct Taxes since 2014, year-wise is tabulated as under:

(Amount in Rs. Crore)

| Financial Year   | Corporate Tax Collection   | %Growth in Corporate Tax Collection   | Net Direct Tax Collection   | %share of Corporate Tax in Net Direct Tax Collection   |
|------------------|----------------------------|---------------------------------------|-----------------------------|--------------------------------------------------------|
| 2014-15          | 4,28,925                   | 8.68%                                 | 6,95,792                    | 61.65%                                                 |
| 2015-16          | 4,53,228                   | 5.67%                                 | 7,41,945                    | 61.09%                                                 |
| 2016-17          | 4,84,924                   | 6.99%                                 | 8,49,713                    | 57.07%                                                 |
| 2017-18 *        | 5,71,202                   | 17.79%                                | 10,02,738                   | 56.96%                                                 |
| 2018-19 *        | 6,63,572                   | 16.17%                                | 11,37,718                   | 58.32%                                                 |
| 2019-20 *        | 5,56,876                   | -16.08%                               | 10,50,681                   | 53.00%                                                 |
| 2020-21 *        | 4,57,719                   | -17.81%                               | 9,47,176                    | 48.32%                                                 |
| 2021-22 *        | 7,12,037                   | 55.56%                                | 14,12,422                   | 50.41%                                                 |
| 2022-23 *        | 8,25,834                   | 15.98%                                | 16,63,686                   | 49.64%                                                 |
| 2023-24 *        | 9,11,055                   | 10.32%                                | 19,60,166                   | 46.48%                                                 |
| 2024-25 *#       | 9,86,767                   | 8.31%                                 | 22,26,375                   | 44.32%                                                 |

Source -Union Finance Accounts of respective years and reports of C&AG/Receipt Budget up to FY 2016-17.     *  Pr. CCA, CBDT.

# - Provisional Figures

- Deduction of export profits of units located in SEZs (section 10AA)
- Accelerated Depreciation (section 32)
- Deduction/weighted  deduction  for  expenditure  on  scientific  research  (Section 35(1), (2AA) & (2AB))
- Deduction in respect of specified business (section 35AD)
- Deduction on account of donations to charitable trusts and institutions (section 80G)
- Deduction on account of contributions to political parties (section 80GGB)
- Deduction  of  profits  of  undertakings  engaged  in  development  of  infrastructure facilities (section 80-IA)
- Deduction  of  profits  of  undertakings  engaged  in  generation,  transmission  and distribution of power (section 80-IA)
- Deduction of profits of undertaking engaged in revival of power plant (section 80IA)
- Deduction  of  profits  of  undertakings  engaged  in  development  of  SEZs  in pursuance to SEZ Act, 2005 (section 80-IAB)
- Special provision in respect of specified business (section 80-IAC)
- Deduction of profits of industrial undertakings derived from production of mineral oil and natural gas (section 80-IB)
- Deduction  of  profits  of  industrial  undertakings  derived  from  housing  projects (section 80-IB)
- Deduction of profits of industrial undertakings derived from integrated business of handling, storage and transportation of food grains (section 80-IB)
- Deduction of profits of industrial undertakings derived from processing, preservation and packaging of fruits and vegetables (section 80-IB)
- Deduction of profits and gains from housing projects (section 80-IBA)
- Deduction of profits of undertakings set-up in North Eastern States (section 80-IE)
- Deduction of profits of undertakings set-up in Sikkim (section 80-IE)
- Deduction of profits from business of collecting and processing of bio-degradable waste (section 80JJA)
- Deduction in respect of employment of new workmen (section 80JJAA)
- Deduction in respect of certain incomes of Offshore Banking Units [OBUs] and International Financial Services Center (section 80-LA)
- Deduction sin respect of certain incomes of International Financial Services Centre [section 80LA(1A)]
- Deduction  in  respect  of  contributions  given  by  companies  to  political  parties (section 80GGC)
- Deduction in respect of certain income of Producer Companies (section 80 PA)
- Vide Finance Act,2020, the threshold limit of turnover for filing audit report u/s 44AB was increased to Rs.10 Cr vide Finance Act,2021 to reduce the compliance burden of small businesses subject to conditions stipulated therein.

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## Annexure-A