"This will benefit entire MSME sector which accounts for 99 per cent of companies filing taxes," Mr Jaitley said while announcing the 2018-19 Budget.
The estimates of revenue foregone due to this measure is Rs 7,000 crore in 2018-19.
However, for businesses with over Rs 250 crore turnover 30 per cent tax remains.
Lowering of corporate tax is in tune with Mr Jaitley's promise in 2015-16 Budget.
In the 2015-16 Budget, Mr Jaitley had announced that the corporate tax rate would be gradually lowered to 25 per cent from existing 30 per cent over the next four years.
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