New Delhi: In a major relief to the corporate sector, the government of India has slashed the Corporate Tax for Domestic Companies to 25.17 percent from the existing 30 percent. Finance Minister Sitharaman has announced that a domestic company can pay income tax at a rate of 22 percent if they don’t seek any exemption or incentives. The effective tax rate for the domestic coprporates shall be 25.17 percent.
Speaking to reporters at Goa, the venue for the GST Council Meeting, Nirmala Sitharaman said “The current corporate tax of 30 percent has been brought down to 22%. For new manufacturing companies the existing tax rate is 25% which has been brought down to 15%.” “In order to promote growth and investment, a new provision has been included in the Income Tax act, that allows any domestic companies an option to pay income tax at the rate of 22% without exemptions.
Amendments will be made through an ordinance to IT Act. These companies will not be required to pay MAT,” She said.
The markets took the decision positively and the Sensex and Nifty zoomed more than 4 percent. While the Sensex was trading at 13,890 points at 12 noon, the Broader index Nifty was at a high of 11,200 points.
Shaktikanta Das, Reserve Bank of India Governor has praised the government’s bold initiative. He said, “This is definitely a bold measure… will augur very well for our economy,”.