The market welcomed the cut in corporate tax openly.
Sensex 1921 and Nifty closed up by jumping to 569 points
New Delhi: Finance Minister Nirmala Sitharaman on Friday announced a cut in corporate tax for companies as part of efforts to accelerate the economy. After this announcement, there was a wave of happiness in the stock markets and the market started running like a rocket.
On Friday, the last trading day of the week, there was a strong buying in the stock markets. The market was heartily welcomed by the government to cut the corporate tax rate by about 10 percent.
Bombay Stock Exchange's 30-share sensitive index Sensex gained 1921.15 points or 5.32 percent to end at 38,014.62 points. On the other hand, the National Stock Exchange's 50-share index Nifty jumped 569.40 points or 5.32 percent to close at 11,274.20 points.
At 2:25, the BSE Sensex was up 6.26 percent or 2260 points to 38,354 points. The NSE Nifty was trading at 11,81 points, up 6.28 percent.
At 1:20 pm, the BSE Sensex gained 5.29 percent or 1909.14 points to reach 38,002.61 points. NSE Nifty is up by 5.09 percent or 545.20 points at 11,250.00 points.
At 12:20, the BSE gained 5.38 percent or 1941.40 points to reach 38,034.87 points. The Nifty was trading at 11,270.45 points, jumping 5.28 percent or 565.65 points.
BSE Sensex is trading at 5.06 percent or 1826.07 points at 37,919.54 points at 12:06 pm. On the other hand, the Nifty of the National Stock Exchange was trading at 11,232.75 percent with a 4.93 percent jump.
Maruti Suzuki shares rose 7.41 percent or Rs 440.15 to Rs 6,378.45. At the same time, Tata Motors shares were seen trading at Rs 128.80, up 3.66 percent or Rs 4.55 on the BSE. Eicher Motors shares rose by Rs 2363.90 to Rs 18,123.40. At the same time, Ashok Leyland's stock rose by Rs 4.80 to Rs 63.15.
Finance Minister Nirmala Sitharaman said that an ordinance has been proposed to reduce corporate tax for domestic companies, new local manufacturing companies.
f a domestic company does not take advantage of any incentive, it will have the option to pay income tax at the rate of 22 percent. Companies that are choosing to pay income tax at the rate of 22 percent will not be required to pay the minimum alternative tax.
The effective rate including surpluses and cess would be 25.17 percent. He said that new domestic manufacturing companies formed after October 1 can pay income tax at the rate of 15 percent without any incentive.
Sitharaman said that the effective rate for new companies including all surpluses and cess would be 17.01 percent. Companies enjoying the exemption right now can opt to pay tax at a lower rate after their term ends.
The capital gains resulting from the sale of shares of companies with securities transaction tax liability will not apply to the surplus proposed in the budget.