New Delhi, September 20: Union Finance Minister Nirmala Sitharaman on Friday announced to reduce corporate tax rates for domestic companies and new domestic manufacturing companies. Nirmala Sitharaman said that amendments regarding corporate tax rate cut have been made to the Income Tax Act. The government is also reducing minimum alternate tax (MAT) for domestic companies, Sitharaman announced. What Are Loan Melas? Here's All About The Meetings Announced by Nirmala Sitharaman And How They Help Prospective Borrowers.

"To promote growth, a new provision has been inserted in the income tax act with effect from the fiscal year 2019-20, which allows any domestic company to pay income tax at the rate of 22 percent subject to the condition they will not avail any incentive or exemptions," the Finance Minister announced. The tax rate for new domestic manufacturing companies will be 15 percent. The minimum alternate tax has also been reduced by 3.5 percent. Nirmala Sitharaman Asks Banks to Give Preference to Fresh Loan Applicants After Mergers Come Into Effect, Announces 200 Loan Melas.

"To provide relief to companies which continue to avail incentive or exemptions, even for them we are giving a minimum alternate tax relief. The MAT rate has been reduced to 15 percent from the existing 18.5 percent," Sitharaman told a press conference. She also announced that the enhanced surcharge introduced in the Union Budget 2019 won't apply on capital gains arising on sale of equity share in a company or a unit of an equity-oriented fund.

"The enhanced surcharge shall not apply on capital gains arising on sale of any security including derivatives in the hands of foreign portfolio investors," she added. Following Sitharaman's announcements, benchmark indices jumped more than 2 percent. 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.

The total revenue foregone for the reduction in corporate tax rate and other relief is estimated at Rs 1,45,000 crore. This 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 11:03 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).