New Delhi | Jagran Business Desk: The Sensex on Friday jumped over 2,000 points while the Nifty is up over 632.05 points after Finance Minister Nirmala Sitharaman proposed to slash corporate tax for domestic and new local manufacturing companies.

The S&P BSE Sensex jumped nearly 2000 points to trade at 38,181.85 levels while the NSE's Nifty50 index reclaimed 11,336.85 level, up over 632.05 points.

Finance Minister on Friday said that the government will lower the corporate tax rate on domestic companies and new manufacturing firms. With this change, the effective tax rate for companies will be 17.01 percent which will include surcharges and cess. The measures will be implemented through an ordinance, she said and stated that a new provision has been inserted in the Income Tax Act with effect from the fiscal year 2019-20.

"We today propose to slash the corporate tax rates for domestic companies and also for new domestic manufacturing companies," Sitharaman said.

"A new provision has been inserted in the Income Tax Act with effect from the fiscal year 2019-20, which allows any domestic company an option to pay income tax at the rate of 22 percent subject to the condition that they will not avail any exemptions or incentive," she said.

 

Also Read: Sitharaman announces cut in corporate tax rates for domestic companies to boost economy

The FM said companies opting for the 22 percent income-tax slab won’t have to pay minimum alternative tax.

Moreover, to attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15 percent, Sitharaman said.

 

Sitharaman stated that corporate tax rate will be 22 per cent without exemptions, inclusive of surcharge and cess. "No Minimum Alternate Tax (MAT) applicable on such companies," she said. 

Posted By: Talib Khan