Watch | CFO Atul Goyal On Impact Of Corporate Tax Cuts On Brigade Enterprises
Brigade Enterprises Ltd., a real estate developer that forayed into affordable housing last year, said it may not benefit from a lower corporate tax rate.
The company is still weighing the benefits of the new tax rate against the exemptions it currently enjoys, according to Chief Financial Officer Atul Goyal. “Brigade's tax rate is 23-24 percent now. It's only because we were availing benefits of (Section) 80-IBA (of Income Tax Act) from our earlier projects. We have some more projects under (Section) 80-IBA which is going to come in,” he told BloombergQuint in an interview.
Besides, the company has some properties under construction in special economic zones, which will be fully tax exempt, he said. “So, we are analysing if it's more profitable under the current tax.”
Last week, the government proposed to slash corporate tax rates for all domestic companies to 22 percent from 30 percent, if they don't avail of any exemptions. The companies that wish to switch to the new tax rate can do so anytime, even after the period for their current tax holiday expired, Finance Minister Nirmala Sitharaman said. However, once a company switches, it can't revert to the previous tax regime.
Brigade Enterprises will analyse both the tax structures and come up with a decision by the end of the year, Goyal said. “Some of the subsidiaries which don't have affordable housing will be shifted to the 22 percent tax.”
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