Sensex makes biggest single day with FM’s corporate tax cut announcement

On Friday, Finance Minister Nirmala Sitharaman was again confronted to give a boost to the dormant economy. This time the Finance Minister made many big announcements for the corporate sector. The result- a massive bull run in the stock market which shattered previous records. The government’s booster dose led to the biggest gain in the history of the stock market during trading. During the trading, the index saw a gain of over 2250 points at one time. At the end of trading, the SENSEX has jumped 1921 points and closed at 38,014 level. At the same time, the Nifty also rose by 569 points to 11,274.

History’s biggest gain in Sensex

After the press conference of Nirmala Sitharaman, the stock market gained momentum, it set a new record. In fact, during the trading, at one time, the SENSEX was seen to be trading with an increase of over 2250 points, while the Nifty also recorded an increase of more than 650 points. Earlier on May 18, 2009, the Sensex had gained 2,110 points. Then the market celebrated the then UPA government’s return to power once again.

Due to this enthusiasm of the stock market, the investors made more than 7 lakh crore rupees during the business. In fact, the market cap of BSE was Rs 1,38,54,439.41 lakh crore on Thursday, which reached 1,45,37,378.01 lakh crore when the market closed on Friday. In this sense, more than 6.80 lakh crore has been made. At the same time, during the business, this profit had increased to more than 7 lakh crores.

5 Big Government Gifts

Relief in corporate tax: Firstly, if you talk about the reforms, now the domestic companies will be charged 22% income tax without any exemption. At the same time, after adding surcharge and cess, the company will have to pay 25.17 percent tax. This will benefit the big companies of the country who fall in the 30% corporate tax slab. However, due to the new decision of the government, there is a possibility of a burden of Rs 1.45 lakh crore on revenue.

Relief on new investment: Talking about other gifts, businessmen who set up a manufacturing company after October 1, 2019, will have to pay income tax at the rate of 15 percent. Currently, new investors have to pay tax at the rate of 25 per cent. However, the domestic company which will do its production after 31 March 2023 will not get the benefit of the government’s relief.

Relief on MAT: The third major announcement is that companies have been given relief in Minimum Alternate Tax (MAT). After this, now companies will have to pay MAT at the rate of 15 percent. Currently, this rate is 18.5 percent. MAT is imposed on companies that earn profits but due to concessions, the tax liability on them is less. This decision of the government can see more enthusiasm in foreign companies.

Relief on capital gains: Talking about the fourth gift, the government has announced the removal of surcharge on capital gains. This decision of the government will benefit those people who sell shares or invest in equity mutual funds.

Relief on buyback: The government has also announced exemption from buyback tax on listed companies that announced share buybacks before 5 July 2019. The biggest advantage of this will be those companies that do share buybacks. When a company buys its own shares from investors, it is called buyback. After completion of this process, these shares cease to exist.