On 20/09/2019 Finance Minister Nirmala Sitharaman in a press conference announced cut on corporate tax in India a surprise Rs 1.45 lakh crore aimed for private investment.
Finance minister Nirmala sitharaman said that the effective cut corporate tax cut in India rate will be lowered to around 22% from 30%.
For new manufacturing companies the existing tax has been reduced to 15% from rate 25%. The effective tax rate after surcharges and cess will be 17%.
- Due to announcement on corporate tax cut, There was a heavy growth in share market. Or we may call it as an Early Diwali gift.
- Sensex advanced by a massive 1921.15 points to 38,014.62 while the broader Nifty jumped to 11,275.45 after gaining 570.65 points or 5.33 per cent.
Here’s what Nirmala Sitharaman said in a press conference about corporate tax cut in India.
- New provision inserted in the income tax act with effect from fiscal year 2019-20, that allows any domestic company to pay income tax at the rate of 22% subject to condition they will not avail any incentive or exemptions.
- Enhanced surcharge will not apply to capital gains arising on equity sale or equity-oriented funds liable to STT stabilize flow of funds into capital markets.
- To provide relief to companies availing of concessions and benefits, a MAT relief by reducing it from 18% to 15%.
- CSR 2% spending to include government, PSU incubators and public funded education entities, IITs.
- Manufacturing companies set up after October 1 to get option to pay 15% tax. Effective tax rate for new manufacturing firms to be 17.01% inclusive of surcharge & tax.
- New domestic manufacturing companies incorporated after October 1 2019, can pay income tax at a rate of 15 per cent without any incentives. Meaning, effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess.
- Also companies can opt for lower tax rate after expiry of tax holidays and concessions that they are availing now.
- The government has also decided to not levy enhanced surcharge introduced in Budget on capital gain arising from sale of equity shares in a company liable for securities transaction tax (STT).
- It may boost India Economy.
Here’s what Indian prime minister reacted for corporate tax cut in India
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