The government will introduce two important Bills in the Lok Sabha on Monday -- the Taxation Laws (Amendment) Bill and the International Financial Services Centres (IFSCs) Authority Bill.
These bills were cleared by the Union Cabinet on November 20. The Taxation Laws (Amendment) Bill provides for reduction in rates of corporate income tax as an additional fiscal stimulus to attract investment, generate employment and boost growth.
A new provision was inserted in the Income Tax Act that with effect from the current financial year (2019-20), an existing domestic company can opt to pay tax at 22 per cent plus surcharge at 10 per cent and cess at 4 per cent if it does not claim any exemption.
Since these could have been achieved through an amendment to the Income tax Act, 1961 (IT Act), or to the Finance Act, as the Parliament was not in session, it was done through promulgation of The Taxation Laws (Amendment) Ordinance 2019 (the Ordinance) in September, 2019.
The same Cabinet meeting also approved the introduction of International Financial Services Centres Authority Bill, 2019, in the Lok Sabha after its withdrawal from the Rajya Sabha. This provides for a unified financial regulator for IFSCs.
The Union Cabinet in a meeting held on February 6, 2019, had approved the proposal for the establishment of a unified authority for regulating all financial services through the introduction of the International Financial Services Centres Authority Bill 2019 in the Parliament. Subsequently, the Bill was introduced in the Rajya Sabha on February 12, 2019.
The withdrawal from Rajya Sabha has been necessitated as the Lok Sabha Secretariat has now conveyed that this is a Finance Bill under Article 117(1) of the Constitution which should be introduced in the Lok Sabha accordingly with the recommendation of the President under Article 117(1) and 274(1) of the Constitution.
The introduction of the Taxation Laws (Amendment) Bill, 2019 will replace the Ordinance issued in September.