Indian market witnesses sharp rise as govt slashes corporate tax
New Delhi, Sept 20 (IBNS): Indian market witnessed major boost on Friday after the government announced a cut in corporate tax rate for companies with the Sensex index moving up to touch 2,284.55 points in its biggest intraday gain in more than a decade.
The Sensex zoomed to touch 38,378.02 points at one point of time in the day.
As per last report, Sensex moved up by 1895.51 points to touch 37988.98 points.
Nifty rose by 575.30 points to touch 11280.10 points.
Union Finance Minister Nirmala Sitharaman on Friday announced corporate tax rate cuts to 22 per cent for domestic companies and 15 per cent for newly-formed domestic manufacturing companies among other fiscal measures to boost the investments in the country.
With the implementation of the cuts, the government will have to forego Rs 1.45 lakh crore per year, Sitharaman said at a press conference in Panaji ahead of the GST Council meet.
The tax relief for domestic companies, effective from Apr 1, implies that the government has reduced the effective corporate tax from 30 per cent to 25.17%, which is inclusive of all cess and government charges for the domestic companies and is applicable only if they do not avail any other exemptions or incentives.
Therefore, the effective tax for the companies not availing any concessions or incentives will be 22%.
It means that companies opting for this tax slab will have to pay only Minimum Alternate Tax (MAT).
The MAT has also been slashed to 15 per cent from 18.5% for those who will opt to continue paying the surcharge and cess.
For the domestic companies formed after Oct 1 will have to pay tax at the 15 per cent rate, if they do not avail any incentives or concessions.
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