FM slashes corporate tax rate- Another ‘Mini Budget’ in 8 months
In the biggest reduction in 28 years, the Government today slashed corporate tax by almost 10 percentage points as it looked to pull the economy out of a six-year low growth and a 45-year high unemployment rate by reviving private investments with a Rs 1.45-lakh crore tax break.
Two-and-a-half-months after presenting her maiden Budget that was hailed as “development-friendly” and “future-oriented”, Finance Minister Nirmala Sitharaman announced cutting corporate tax rate to 25.17 per cent to bring them at par with other Asian countries such as China and South Korea but at the expense of potentially breaching the 3.3 per cent fiscal deficit target.
Markets cheered the announcement with the BSE Sensex jumping by the most in a decade while the rupee also climbed against the US dollar.
“The Indian real estate industry has been reeling under the cumulative effect of RERA, GST, NBFC crisis and IBC Code which led to an eventual slowdown. There has been a need for boost in the overall morale of the players. The Government’s announcement today to slash the basic Corporate Tax from 30% to 22% and 15% from 25% for new manufacturing companies comes in quick succession to the setup of a Stress Fund of INR 20. 000 crore. These measures are welcomed and are definitely a significant step towards the revival of the sector.” said Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure Limited.
Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd. – “Amid growing concerns over the economic slowdown, the government announced a wide array of tax exemptions to promote investment and growth. The proposal to slash the corporate tax for domestic companies and new domestic manufacturing companies is a major fiscal booster. These tax concessions will encourage investments, bolster the Make in India initiative, boost employment and invariably improve economic activity, thus leading to more revenue overall.”
Dhiraj Jain, Director, Mahagun Group, “By reducing the corporate tax government has been able to strike at the point where the need is. With stocks going up because of the steps taken by the government has benefited the corporate world. We are hopeful that now the government will pay heed to single window clearance, cheaper land parcels and opening up of unused land for real estate development for the growth of real estate sector. We have to understand that the sector plays a huge role in country’s GDP and by strengthening it we can achieve the targets set by the government for the overall development of economy and mission housing for all.”