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A real bold move: FM announces significant tax cut to spur growth

By IndianMandarins- 20 Sep 2019
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Few economists call it ‘a real bold move’. This is not mere nitpicking, this is not tidbits, this is a significant tax reduction. Is it so?

Union Finance Minister Nirmala Sitharaman today surprised the business world with a slew of measures to brave economic slowdown. As FinMin announced Indian firms will have the option to pay income tax at 22 percent if they don't avail any exemptions or incentives as effective tax for these companies comes to 25.17 per cent inclusive of all surcharge and cesses.

To spur growth, corporate tax cut will be brought through an ordinance besides that domestic firms will not have to pay minimum alternate tax, no tax surcharge on capital gains on sale of securities, including derivatives in the hands of FPIs. There will be no tax on listed companies' share buybacks announced before July 5, 2019. In another big move, the government has decides to allow spend CSR of 2 per cent on incubators run by PSUs.

It is believed that companies will benefit significantly from the move as it will put more money in the hand of corporate, enabling them to invest more.

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