Sensex rallies over 2,000 points as FM slashes corporate tax, MAT rates

The rally started after the government announced that corporate tax rates will be slashed to 22% for domestic companies and 15% for new domestic manufacturing companies. The Government has brought in the Taxation Laws (Amendment) Ordinance 2019 to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019.

New Delhi: Markets extended big rally on Friday in the pre-afternoon trade after the Finance Ministry slashes corporate tax and MAT rates with the Sensex rallying over 1700 points and Nifty pushing above 10,960.

At 11.22 am the BSE Sensex zoomed 1288.86 points or 3.57 percent to 37,382.33 while the NSE Nifty rallied above 11,000 level by climbing 369.90 points or 3.46 percent to 11,074.70.

All the indices were trading in green in the Sensex pack.

The government on Friday announced that corporate tax rates will be slashed to 22% for domestic companies and 15% for new domestic manufacturing companies. The Government has brought in the Taxation Laws (Amendment) Ordinance 2019 to make certain amendments in the Income-tax Act 1961 and the Finance (No. 2) Act 2019.

“In order to promote growth and investment, a new provision has been inserted in the Income-tax Act with effect from FY 2019-20 which allows any domestic company an option to pay income-tax at the rate of 22% subject to condition that they will not avail any exemption/incentive. The effective tax rate for these companies shall be 25.17% inclusive of surcharge & cess. Also, such companies shall not be required to pay Minimum Alternate Tax,” an official release said.