New Delhi, September 20: In a bid to revive the slowing economy, the Modi government on Friday announced a reduction in corporate tax rates for domestic companies and new domestic manufacturing companies. Addressing a press conference, Union Finance Minister Nirmala Sitharaman announced that the government has slashed the corporate tax rate on domestic companies to 22 per cent subject to such entity not availing any exemptions and incentives. Sensex Zooms 2,000 Points, Nifty at 11,262 After Nirmala Sitharaman Announces Corporate Tax Cut.

For new domestic companies, the tax rate has further been reduced to 15 percent. These companies should have commenced production on or before March 31, 2023, and would also get an exemption from minimum alternate tax (MAT). From Prime Minister Narendra Modi to Reserve Bank of India Governor Shaktikanta Das, India Inc and Twitterati, Sitharaman's announcements recieved thumbs up from every quarter.

PM Narendra Modi called the announced corporate tax rate cut "historic", adding that the move will draw more investment and create employment. "The step to cut corporate tax is historic. It will give a great stimulus to #MakeInIndia, attract private investment from across the globe, improve competitiveness of our private sector, create more jobs and result in a win-win for 130 crore Indians," he tweeted.

"The announcements in the last few weeks clearly demonstrate that our government is leaving no stone unturned to make India a better place to do business, improve opportunities for all sections of society and increase prosperity to make India a $5 Trillion economy," he added. Describing the corporate tax cut as "bold step", Shaktikanta Das said that this will bring India closer to "tax rates in this part of the world".

The positive outcomes of the announcements quickly reflected in the share market. When Sitharaman was announcing the corporate tax cut, the Sensex went up 872.52 points or 2.42 percent at 36965.99, while Nifty saw a jump of 243.50 points or 2.27 percent at 10948.30. Deepak Parekh, Chairman, Housing Development Finance Corporation, said the move will help the high-tax paying companies as they will have money to reinvest.

Speaking to a news portal, Rajeev Thakkar, chief of PPFAS Mutual Fund, said that the cut in tax rate will boost the earnings of the taxpaying companies. Reacting positively, Mihir Vora of Max Life Insurance said: "This will have a positive impact on corporate profitability and a potential impact of kick-starting the investment cycle which we need."

Here are some reactions from Twitter:

The corporate tax rate cut is the biggest announcement so far by the Modi 2.0 government to bring back the economy on track. The economic slowdown has dragged down the GDP growth to a six-year low of 5 per cent in the April-June quarter of the current fiscal.

(The above story first appeared on LatestLY on Sep 20, 2019 02:15 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).