Union Budget 2015-16: Corporate tax rate to be cut from 30 to 25%

Jaitley said that the Corporate Tax Rate was proposed to be reduced from the current 30 per cent to 25 per cent over the next four years. In his budget speech in the Lok Sabha, Jaitley said this was expected to lead to a higher level of investment, higher growth and more jobs.

The minister however said that the reduction had to be accompanied by rationalisation and removal of various kinds of exemptions and incentives which was leading to a large number of tax disputes. He pointed out that the effective collection of corporate tax today was about 23 per cent.

Jaitley said he did not start the process of reduction right away as he wanted to give advance notice that the changes would start from the next financial year.

Jaitley further said that his government was moving forward on various fronts to implement Goods and Services Tax (GST) from the next year.

GST, on which his government introduced a bill in the last session of the parliament, was expected to play a transformative role in the way the economy functioned.

He added, it would add buoyancy to India's economy by developing a common Indian market and reducing the cascading effect on the cost of goods and services. He said, as part of the movement towards GST the Education Cess and the Secondary and Higher Education Cess were to be subsumed in the Central Excise Duty.