New Delhi: In an effort to revive the ailing economy of the country at this time of corona crisis, the Central government is planning to propose a tax holiday for companies to bring in new investments. According to media reports, the Central government is exploring various measures to support the economy amid the coronavirus pandemic. Also Read - Karnataka Govt Constitutes Task Force to Woo MNCs Looking to Relocate From China
Reports suggested that the Union Ministry of Finance is evaluating a proposal to give a 10-year full tax exemption to companies to make new investment upwards of $500 million in the country. Also Read - Goyal gets addl charge of ministry of finance, corporate affairs 9 days ahead of budget
The proposal from the Ministry needs companies to start their operations within three years from June 1, and it will cover sectors including medical devices, electronics, telecom equipment and capital goods. Also Read - Piyush Goyal gets additional charge of ministry of finance, corporate affairs
Reports further suggested that the Finance Ministry is also planning to provide a four-year tax exemption to companies that will invest $100 million or more sectors such as textiles, food processing, leather, and footwear.
If reports are to be believed, then a lower corporate tax rate of 10 per cent is also being proposed by the Finance Ministry for the next six years.
The development comes at a time when different state governments are forming Special Investment Promotion Task Forces to woo disenchanted multinational companies looking to shift their manufacturing bases from China.
Starting from offering easy access and giving land for establishing factories to tax breaks for new plants, the central government trying to attract investors to the country.