India cuts corporation tax to 25.17% for domestic firms; Sensex up 1200 points

NEW DELHI: In a major fiscal booster, the government of India on Friday slashed effective corporatIon tax to 25.17 per cent inclusive of all cess and surcharges for domestic companies.nnMaking the announcement, Finance Minister Nirmala Sitharaman said the new tax rate will be applicable from the current fiscal which began on April 1.nnSitharaman said the revenue foregone on reduction in corporation tax and other relief measures will be Rs 1.45 trillion annually.nnThis, she said is being done to promote investment and growth.nnIn effect, the corporate tax rate will be 22 per cent for domestic companies, if they do not avail any incentive or concession.nnThe changes in the Income Tax Act and Finance Act will be made effective through an ordinance.nnThe minister also said companies opting for 22 per cent income tax slab would not have to pay minimum alternative tax (MAT).nnSitharaman further said, new domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives.nnMeaning, effective tax rate for new manufacturing companies will be 17.01 per cent inclusive of all surcharge and cess.nnSitharaman further said companies can opt for lower tax rate after expiry of tax holidays and concessions that they are availing now.nnThe markets cheered FM’s announcements, Sensex zoomed over 1200 points and Nifty was up 250 pointsnnSource: Press Trust of India