new delhi the reduction in income tax rate from 30 to 25 for companies with a turnover of up to rs 250 crore is a mixed bag for micro small and medium enterprises msme as the cut is coupled with an increase in health and education cessmsmes with a turnover of up to rs 50 crore will have to shell out more in taxes while firms with a revenue of more than rs 50 crore but up to rs 250 crore will have to pay lessbudget 2018 has raised health and education cess from 3 to 4 making companies up to a rs 50crore turnover worse off the applicable tax rate for a rs 50crore turnover entity will rise to 2912 next fiscal from the current 2884 including a 3 cess which will definitely pinch however companies with a turnover of rs 50250 crore will benefit as they will now pay a tax of 2912 instead of 3461finance minister arun jaitley said as far as businesses are concerned i have not forgotten them either which is a very strong part of the middle class so all businesses and companies with up to rs 250crore turnover uniformly pay 5 less tax so they have a lot more investible surplusabhishek goenka partner and direct tax leader at pwc india said the reduction is welcome since it enables reasonably large companies also to get the benefit of the reduced rate however creating tax arbitrages drives behaviour to minimise taxes by moving activities into the eligible companies and that is best avoided an acrosstheboard reduction should have been considered insteadmahavir lunawat founder of pantomath group which offers msme advisory services said after gst smaller businesses had to transform their business models the cut in corporate tax rate will further incentivise them to streamline their businessessudhir kapadia partner and national tax leader at ey india said though 99 of companies will fall under the 25 tax rate the balance 1 actually contribute a disproportionately large share to the economy by way of turnover and taxes both direct and indirect