"The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians," PM Modi tweeted.
PM further added that the announcements made in the last few weeks clearly demonstrate that our government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a $5 trillion economy.
Earlier in the day, FM Nirmala Sitharaman announced a series of tax incentives to boost the industry and restart investment. Sitharaman announced a lowering of corporate tax rate on domestic companies to 22 per cent subject to such entity not availing any exemptions and incentives. Also these companies will also not be required to pay any Minimum Alternate Tax (MAT). Effective tax rate in this case would be 25.17 per cent, including cess and surcharge.
The Minister announced an even lower 15 per cent corporate tax rate for new domestic companies making fresh investment in manufacturing. These companies should have commenced production on or before March 31, 2023 and would also get exemption from MAT.
Sitharaman said that the Taxation Laws (Amendment) Ordinance 2019 has already been prised to effect changes in the Income Tax Act and Finance Act 2019. Government believes that the new tax structure, with effect from April 2019, will bring Indian corporate tax rate at par with other Asian nations.
Soon after the announcements were made by FM Sitharaman in a press conference, Bombay Stock Exchange (BSE) Sensex surged over 2,100 points. Even the Nifty 50 on the National Stock Exchange (NSE) was over the 11,000 mark.