CORPORATE TAX SLASHED TO FIRE UP ECONOMY
In the boldest economic stimulus measure to revive the economy, the corporate tax on companies has been reduced to 22%. The tax surcharge, which was 30%, was reduced to 25.17%. This initiative comes as part of strengthening the ‘Make in India’ project. Listed companies which have announced share buybacks before 5th July, will not be charged with super-rich tax.
TAX REDUCTION PROMOTE INVESTMENT & GROWTH
Making the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal year which began on April 1. The reduction in corporate tax and other relief measures will cost the government Rs 1.45 lakh crore per year.
The changes in the Income Tax Act and Finance Act will be made effective through an ordinance. The minister also said companies opting for 22 per cent income tax slab would not have to pay minimum alternative tax. Companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any benefits. Effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess, the finance minister said.
The stock market has gained a huge advance following the announcement of the Center government. The benchmark Sensex rose by 1,600 points and the Nifty by 450 points.
