Govt May Introduce Concessional Corporate Tax for New Manufacturing in Budget 2025-26
The central government is evaluating the introduction of a concessional corporate tax rate for new manufacturing plants in the upcoming Budget 2025-26. This initiative aims to incentivize fresh investments in the manufacturing sector, boost industrial output, and align with the government’s vision of making India a global manufacturing hub.
The proposed tax rate is expected to be lower than the existing rates for new units, providing businesses with a significant cost advantage. Officials suggest that this measure would not only attract domestic and foreign investments but also create jobs and stimulate economic growth.
Currently, new manufacturing units set up before March 2024 can avail a corporate tax rate of 15%. The government is considering extending this deadline to encourage more industries to establish operations under the concessional tax regime. Such a move is particularly crucial as global economic uncertainties persist, and India seeks to position itself as a reliable alternative for manufacturing.
The proposal is part of a broader strategy to revitalize the manufacturing sector, which has faced challenges in recent years. If approved, the measure is likely to focus on capital-intensive industries, high-technology manufacturing, and sectors critical to India’s economic growth.
Industry stakeholders are closely watching the development, expecting clarity on the framework in the Budget announcement. The move is anticipated to align with India’s “Make in India” initiative and further enhance the country’s global competitiveness.
