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Corporate Taxes Slashed to 22% by Finance Minister. Key Impact with GST Revision

Corporate Taxes Slashed to 22% by Finance Minister. Key Impact with GST Revision

Finance Minister announced Corporate Tax Reduction from 30% to 22% along with changes in Surcharge on Capital Gain, Tax Reduction on Manufacturing Sector with GST Measures


Corporate Taxes Reduced. Biggest Announcement of 2019

To Boost Economy is what the Diwali Gift from Finance Minister to Corporate by offering in host of measures.

In possibly the biggest announcement of Calendar Year 2019 from Financial Perspective is that 

  • Corporate Tax slashed from 30% to 22%. This brings down net corporate tax inclusive of surcharge and cess at 25.17% from 34.94% effective from 1st April 2019
  • Even for New Manufacturing companies, tax rates reduced from 25% to 15%, which leads to final reduction from 29% to 17%
  • Even the Minimum Alternate tax reduced from 18.5% to 15%
  • No additional surcharge on Capital Gains arising on sale of Equity Shares

This will boost in Growth in Domestic Sector as Manufacturing, Services, Coal, Mining all will gain in with lesser tax flow. Its a bold move from Government that even Investors gaining on capital gain will no longer be required to pay additional surcharge.

Although the expectations of Revenue loss due to tax measures is expected at 1.45 Lakh crore, but Government hopeful that these measures will revive the Industry with incremental business, more investments, more employment so as to cover up the revenue loss in near future

A direct impact of the same is Stock Markets gained over 2000 Points in Bombay Stock Exchange an over 500 Points in National Stock Exchange with over 5% Jump in Indices. 

Even the lower corporate tax will also likely attract in Foreign Companies to treat India at par with Tax Friendly countries in the world

Earlier in August 2019 - Finance Minister announced for providing additional Depreciation at 30% in Income Tax on buying Cars from August 2019 to March 2020 along with recommendations to GST Council for reconsideration of GST rates. Although GST Fitment Committee not proposing a reduction on GST Rates on Automobile, but from other Industry perspective FMCG and Hotels to benefit.


Some of the Bold and most Talked measures of Mr. Narendra Modi Linked BJP Government

  • Demonetisation
  • Surgical Strike by giving free hand to Defence Forces
  • Revoking Article 370 in Kashmir 
  • And now joins in Reducing Corporate Tax

So you can think of how bold is the Step on Reducing Corporate Taxes. 

At the time of Posting this News - Eicher Motors, Tata Motors, Maruti Suzuki, Ashok Leyland, Hero Motocorp, Rico Auto in Automobile Sector and Automobile Ancillary sector all have gained over 10% share price gain over previous close.

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