India Inc gets Rs 1.45 lakh crore Diwali gift! Nirmala Sitharaman cuts corporate tax
Finance Minister Nirmala Sitharaman slashed corporate tax rate in a major way to give economic growth a big booster dose after data put showed economy grew by 5% in last quarter. Sitharaman made the announcement in Goa ahead of the GST Council meeting. She said the new tax rate will be made effective from current fiscal - April 1. This massive Diwali gift will lead the government to forego revenue of as much as Rs 1.45 lakh cr.
Here are some major highlights of today's GST Council meeting
Corporate tax cut
Corporate tax cut to 25.17% inclusive of all cess and surcharges for domestic companies. The revenue foregone on reduction in corporate tax and other relief measures will be Rs 1.45 lakh crore annually.
Modi 2.0 Passes Ordinance
The corporate tax rate will be 22 per cent for domestic companies if they do not avail any incentive or concession. The changes in the Income Tax Act and Finance Act will be made effective through an ordinance.
Buy back of shares:
Listed companies which have announced a buyback of shares prior to July 5, will not be charged super-rich tax.
No surcharge on capital gains:
The government has also decided to not levy enhanced surcharge introduced in Budget on capital gains arising from sale of equity shares in a company liable for securities transaction tax (STT).
Foreign portfolio Investment:
Enhanced surcharge introduced by Finance (No. 2) Act 2019 shall not apply on capital gains arising on sale of equity share in a company/unit of equity oriented fund or unit of business trust liable for a securities transaction tax. The enhanced surcharge shall not apply to capital gains arising on sale of any security including derivatives, in the hands of Foreign Portfolio Investors.
In a major fiscal booster, the government on Friday slashed effective corporate tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.
Finance Minister Nirmala Sitharaman announced a slew of measures to revive the ailing economy.