Corporate Tax Slashed For All Indian Companies; Nifty Posts Biggest Single Day Gain In 10 Years!
CIn a huge relief to all domestic firms in India, Financial Minister Nirmala Sitharaman has slashed corporate tax, which has resulted in a huge jump in share market.
In fact, Nifty has posted a huge jump in gains, which has been described as the single biggest gain in 10 years!
Corporate Tax Slashed: Complete Details
Govt. of India has announced a massive drop in corporate taxes, which also includes manufacturing firms, and all domestic firms.
The changes would be effective October 1st.
Here are the main changes:
- Corporate Tax has been lowered by 10 percentage points for existing companies, and 12 percentage points for new companies.
- Effective corporate tax now stands at 25.17%, which includes all cess and surcharges for domestic companies
- Manufacturing companies will now pay a tax of 15%. Effective tax rate for manufacturing firms now becomes 17.01% inclusive of surcharge & tax
- Every domestic company can opt to pay a corporate tax of 22%, if they agree not to avail any exemptions and incentives
- Manufacturing companies can now opt to pay a tax of only 15%, if they agree not to avail any exemptions and incentives
- Listed companies which have announced buyback before July 15th, 2019 won’t be required to pay taxes on the buyback of shares
- Companies can now use the 2% mandatory CSR spend on incubation, IITs, NITs, and national laboratories, which will encourage innovation
Share Markets Rejoice: Nifty Gains Highest In 10 Years
Immediately after the announcement was made, share markets in India jumped up, and gained massive points as the entire corporate sector is rejoicing.
BSE market capitalisation increased to Rs 143.45 lakh crore compared to Rs 138.54 lakh crore on Thursday; meanwhile BSE Sensex surged by 1800 points and NSE barometer Nifty50 jumped by 500 points, which is the highest single day gain in 10 years.
Within few hours, domestic share investors saw their wealth increase by Rs 2.11 lakh crore on Friday.
Govt. will incur a loss of approximately Rs 1.45 lakh crore while implementing these new tax rules.
We will keep you updated, as more details come in.