Sensex rises 1600 points, income tax will be 22 percent

There has been a huge surge in Indian stock markets with the announcement of exemption in corporate tax on domestic companies by Finance Minister Nirmala Sitharaman. During the trading, the Sensex rose 1601 points to 37,695.74 and the Nifty climbed 363.75 points to 11,068.55. To promote growth, the finance minister has reduced the corporate tax rate to 22 per cent for new domestic companies, unless corporate have taken any incentive or exemption. The stock market has blossomed with the announcement of the finance minister. The market is as bright as Diwali and almost all major sectors are seeing a boom. To increase growth and investment, changes in income tax act will be applicable from the current financial year i.e. 2019-20. The income tax on domestic companies will be 22 percent without any exemption and the effective rate will be 25.17 percent by adding surcharge and cess. Earlier this rate was 30 percent. The Finance Minister said that with the reduction of corporate tax and other concessions, the exchequer will incur a burden of Rs 1.45 lakh crore.

exemption in corporate tax on domestic companies by Finance Minister Nirmala Sitharaman.

To give a boost to Make in India, they added a clause in the Income Tax Act. In FY 2019-20, a domestic company formed after October 1, which will invest in manufacturing, will have the option to pay income tax at the rate of 15 per cent. That is, any company formed in India on or after 1 October 2019 will be taxed at 15%. If they start production before 31 March 2023, then 15 per cent will be taxed. There will be 17.10 percent effective rate including all types of surcharge and cess. Companies that announce a buyback of shares before 5 July 2019 will not face super rich tax. To increase the flow of funds in the capital market, the Finance Minister said that the surcharge raised in the budget in July will not be effective on the sale of shares in the company and capital gains from equity fund unit sales.

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