Finance Minister Niramala Sitharaman announced several fiscal measures on September 20 to boost the economy. The move follows GDP growth touching a six-year low of five percent in the April-June period of FY20.
Addressing her fourth press conference to revive the economy, the FM announced a cut in the corporate tax rate for domestic companies and new domestic manufacturing companies.
The impact sent the benchmark Sensex up more than 1,200 points and the Nifty above the psychological 11,000 mark. Among sectors, the Bank Nifty and Auto index surged three percent each.
Here are the key takeaways:
- Corporate tax rate cut for domestic companies and new domestic manufacturing companies
- The tax rate will be 22 percent without exemptions
- Effective corporate tax rate after surcharge to be 25.17 percent
- To attract investment in manufacturing, local companies incorporated after October will pay tax at the rate of 15 percent
- Effective tax for new companies shall be 17.01 percent, including cess and surcharge
- Companies enjoying tax holidays can avail concessional rates after the exemption period
- Minimum alternate tax (MAT) reduced to 15 percent from 18.5 percent for companies continuing to avail exemptions and incentives
- Enhanced surcharge to not apply to capital gains by foreign portfolio investors (FPIs)
- Buyback tax on listed companies that had announced buybacks before July 5 exempted from taxation
- Revenue foregone for reduction on corporate tax and other measures pegged at Rs 1.45 lakh crore per year
Nirmala Sitharaman press conference LIVE: Govt to forego Rs 1.45 lakh cr/year on reduction in corp tax, other measures
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Source : http://tiny.cc/pes2cz