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
If you found this post helpful do share.
Also if you found something missing do comment
Credits for uploaded Images goes to official owner, BlogsBarrel doesn’t claim any rights to them.
Also Read Articles: