The Sensex zoomed as much as 2,284.55 points to touch 38,378.02 during the session before settling with a gain of 1,921.15 points, hours after the Finance Minister said the effective corporate tax rate for companies will be 25.2 per cent including all additional levies. Just ahead of the festive season, the honourable Finance Minister by reducing the corporate tax rates, has given a triple booster dose to the economy as this will increase the retained earnings of the companies which will result in investible surplus for the future, shift India at par with its regional peers thereby removing one of the issues related to manufacturing and exports and maintain macroeconomic prudence by continuing to stimulate the investment cycle. NDTV delivers reliable information across all platforms: TV, Internet and Mobile.
"The government is on a fearless track to ensure that India becomes as competitive on tax rates with the rest of the world".
The government also announced rollback back of higher surcharge on capital gains on the sale of equity announced in Budget for individuals, HUFs, Association of Persons (trusts).
These tax cuts include a reduction in the surcharge on corporate income tax from 12% to 10%, pointed out Revenue Secretary Ajay Bhushan Pandey, stressing that the effective rate for MAT would also fall sharply.
To spur fresh investments and boost Make in India efforts, for new manufacturing companies incorporated after October 1, 2019 and commencing production by March 31, 2023, the income tax rate will be 15% from 25% at present.
Indian shares notched their best day in more than a decade after the government announced deep cuts in corporate taxes to revive flagging growth in Asia's third-largest economy.
China tells United States to stop interfering in Hong Kong affairs
Numerous thousands of tear gas canisters fired at protesters by Hong Kong police since early June were US imports. Hong Kong activists had earlier called on lawmakers to ban the export of US -made police equipment to Hong Kong.
On the other hand, PowerGrid, Infosys, TCS, NTPC and Tech Mahindra ended in the red, losing up to 2.39 percent.
The broader BSE midcap and smallcap indices followed the benchmarks, surging up to 6.28 percent. Moody's Investors Service said tax cuts were credit positive for Indian firms. -China trade dispute, according to data compiled by Deloitte.
Devang Mehta, Head - Equity Advisory, Centrum Wealth Management, said, "Today's measures, without exaggeration, have revived the sagging economic situation and has reinfused the "Josh" amongst the corporate and capital market fraternity".
India cut corporate tax rates on Friday in a surprise move created to woo manufacturers, revive private investment and lift growth from a six-year low that has led to major job losses and fueled discontent in the countryside. In all the reliefs, the government said it is foregoing revenue of $20 Bn (INR 1,45,000 Cr).
"We are confident this step, in coming days, will boost economic growth so that Gross Domestic Products (GDP) can attain its true potential of 8-9 per cent", he said. The key sectors which would benefit from GST rate cuts are hotels, gems & jewellery, defence and automobiles.
The liberal cuts of nearly 10 per cent on corporate tax rates for both existing and also new manufacturing companies would surely have an impact on the fiscal deficit for the current year.