Goyal said that the Finance Minister's announcements of reducing corporate tax rates will give the economy the necessary boost that we are all expecting. NDTV delivers reliable information across all platforms: TV, Internet and Mobile. The effective tax rate will be around 17%. The government said this increased surcharge shall not apply on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for securities transaction tax, in the hands of an individual, HUF, AOP, BOI and AJP.
However, Sitharaman said total taxation revenue loss due to the cuts would be about $20.5 billion, raising concerns that the government may not be able to meet its fiscal deficit target for 2019-20 at a time when tax revenue collections are already weak.
In effect, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.
Sitharaman further said, new domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives.
SBI chairman Rajnish Kumar, said: "The large reduction in corporate taxes across the spectrum of all companies is perhaps the boldest reform in the last 28 years".
Firms now availing income tax exemptions and incentives can opt for the new concessional tax regime with a headline tax rate of 22% after the expiry of their existing tax holidays or exemption periods. Short term capital gains tax remains at 17.9 percent vs 21.3 percent, which had become the new rate post the passing of the Finance Act 2019.
Samsung Galaxy M30s vs Galaxy M30: Price, specs, features compared
The new smartphones are the upgraded versions of the Galaxy A50 and Galaxy A30 that were launched in India earlier this year. It comes with Widevine L1 certification that enables consumers to watch high definition content across streaming platforms.
Finance Minister has also announced the government decision to expand the scope of 2 per cent CSR spending.
The first two should ideally be driven by macroeconomic factors and company fundamentals, but this is rarely the case - and even for businesspeople and investors for whom these two factors matter, they do not matter as much as taxes.
India cut tax on local businesses to one of the lowest rates in Asia, while providing a more than $20bn (R300bn) boost to revive economic growth from a six-year low.
"These are definitely very bold and welcome measures", he said at a forum.
The broader BSE midcap and smallcap indices followed the benchmarks, surging up to 6.28 percent. The rate is now 40%, according to Deloitte. The key sectors which would benefit from GST rate cuts are hotels, gems & jewellery, defence and automobiles.
Further, in a bid to boost lending, the government on Thursday asked public sector banks to hold loan melas in 400 districts to lend to desirable shadow banks and retail borrowers, and said no stressed loan account of MSMEs will be declared an NPA till March 2020. Anil Agarwal, executive chairman, Vedanta Resources, said that the reduction of corporate taxes, including surcharges and cess, will significantly boost the economy and will provide a huge impetus for the manufacturing and infrastructure sector. Outdoor catering will also attract 5% tax as against the existing 18% with input tax credit.