New Delhi: As a Deepavali gift, Finance Minister Nirmala Sitharaman this morning slashed Corporate Tax rates for domestic firms from 30% to 22% and for new manufacturing companies from 25% to 15% to boost economic growth. The move brings India’s Corporate Tax rate on par with East Asian countries, the Minister said about the Government’s initiative that  pushed Sensex up by 4.35%, or nearly 1,570 points.

The slew of tax concessions will be applicable from April 1 and any advance tax paid by the companies will be adjusted accordingly. The measures will have a revenue implication of Rs. 1.45 lakh crore annually, Sitharaman said.

“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 the condition that they will not avail any exemption/incentive. The effective tax rate for these companies shall be 25.17% inclusive of surcharge and cess. Also, such companies shall not be required to pay Minimum Alternate Tax (MAT),” the Finance Minister said.

In order to attract fresh investment in manufacturing and boost to ‘Make-in-India’ initiative of the Government, another new provision allows any new domestic manufacturing company incorporated after October 1 to pay Income-Tax at 15%, she said.

“This benefit is available to companies which do not avail any exemption/incentive and commences their production on or before 31st March, 2023. The effective tax rate for these companies shall be 17.01% inclusive of surcharge and cess. Also, such companies shall not be required to pay Minimum Alternate Tax,” she added.