Mumbai, September 20: The BSE benchmark indices jumped around 200 points on Friday after Finance Minister Nirmala Sitharaman announced a slew of measures in her media briefing ahead of GST Council meet. The FM has slashed corporate tax for the domestic companies to 22 per cent without exemptions. This news has brought cheer to the stock market and Sensex jumped 1,900 points and touched 38,032 and Nifty was trading at 11,262, up 558 points at 12:30 pm. Nifty has posted the biggest single-day gain in a decade. Corporate Tax Slashed For Domestic Companies, Existing And Fresh; Nirmala Sitharaman Announces New Rates.
FM said that total revenue foregone for the reduction in corporate tax rate is estimated at Rs 1.45 lakh crore per year. Sitharaman at the press conference in Goa said, "Any domestic company gets an option to pay income tax at a rate of 22 percent subject to the condition that they will not avail any incentive. Enhanced surcharge introduced in Budget shall not apply on capital gain arising on sale of equity shares in a company liable for Securities Transaction Tax."
The auto index is up 3.61 percent, followed by the bank sector which is up 2.93 percent. Nirmala Sitharaman said that amendments regarding corporate tax rate cut will be made to the Income Tax Act. The government is also reducing minimum alternate tax (MAT) for domestic companies, Sitharaman announced.
The current corporate tax rate is 30 percent, which has been brought down to 22 per cent. For new manufacturing companies, the existing tax rate is 25 percent which has been brought down to 15 percent.