Forgone Corporate Tax
Government forgone INR-981-billion corporate tax FY25 due to incentives - Minister of State Finance
This story was originally published at 16:06 IST on 4 August 2026
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NEW DELHI – The government has forgone revenue worth INR 980.95 billion in 2024-25 (Apr-Mar) due to the tax incentives announced for corporates in 2019, Minister of State for Finance Pankaj Chaudhary said in a written response to a question in Rajya Sabha Tuesday.
The government had introduced the concessional tax regime in 2019 to promote growth and investment. Effective FY20, domestic companies had an option to pay income tax at the rate of 22%, provided they do not avail exemptions. The effective tax rate for these companies was 25.17% inclusive of surcharge and cess. Before that, domestic companies with annual turnover of up to INR 4 billion paid income tax at the rate of 25%. For other domestic companies, the tax rate is 30%.
The government also provided new domestic manufacturing companies an option to pay income tax at the rate of 15%, provided they do not claim the deductions. It had also reduced the rate of Minimum Alternate Tax to 15% from 18.5%. Minimum Alternate Tax is the minimum amount of tax required to be paid, in case a company's tax liability falls below a certain limit after claiming deductions.
Due to these tax incentives, the government has forgone corporate tax revenue worth INR 941 billion in FY20, INR 752 billion in FY21, INR 969 billion in FY22, INR 881 billion in FY23, and INR 868 billion in FY24, Chaudhary said. End
Reported by Priyasmita Dutta
Edited by Akul Nishant Akhoury
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