Budget 2019: FM Sitharaman Announces Cut In Corporate Tax For Over 99% Companies; Key Things To Know

Presenting her maiden Union Budget in the Parliament today, Finance Minister Nirmala Sitharaman gave a gigantic boost to corporates of the country by announcing a reduction in corporate tax

FM Sitharman also claimed that India is close to become a $3 trillion economy by FY20. (Getty Image)

Budget 2019: Presenting her maiden Union Budget in the Parliament today, Finance Minister Nirmala Sitharaman gave a gigantic boost to corporates of the country by announcing a reduction in corporate tax at the lower rate of 25 per cent from the current 30 per cent for companies having an annual turnover of up to Rs 400 crore. With this move, Sitharaman claimed that 99.39 per cent of Indian companies will enjoy the lower tax rate while only the remaining 0.70 per cent will fall in higher tax bracket. In her Budget speech, Sitharaman said that the companies with annual turnover up to Rs 400 crore  will now be taxed at the lower rate of 25 per cent as a step towards phased reduction in tax rates. Presently, the lower tax rate is applicable on companies having a turnover of up to Rs 250 crore. "My tax proposals will stimulate growth, incentivise affordable housing and encourage start-ups by releasing entrepreneural spirit. It will also be geared towards promoting digital economy. I aim to simplify administration and bring greater transparency," the first full time woman Finance Minister said. Even during Union Budget 2018-19, Modi government had extended the reduced tax rates to the companies having an annual turnover of Rs 250 crore. The government had also cut the corporate tax to 25 per cent from 30 per cent in the Union Budget of 2017-18 for companies with a turnover of Rs 50 crore. The announcement made by first full time woman Finance Minister comes as a big relief for the industry as such companies now need not to worry about compulsorily squaring off in-the-money options before expiry. "Corporate tax on companies with up to Rs 400 cr annual turnover is reduced to 25 per cent - this is a huge relief to the markets. STT levy has been streamlined, and the STT for exercised options will now be applied only to the difference between settlement and exercise price - That's a relief since now traders won't have to be worried about compulsorily squaring off in-the-money options before expiry," Amit Gupta, CEO and Co-founder TradingBells told ABP Live after Modi government 2.0 tabled its first Budget after returning to power. Apart from this FM Sitharman also claimed that India is close to become a $3 trillion economy by FY20, despite the fact that currently government is economically striving in order to reach $5 trillion mark by fiscal 2025. The Finance Minister also proposed changes to kickstart domestic and foreign investment. She also said that there is a need to invest heavily in infrastructure, digital economy and job creation in MSMEs.