Finance Minister Announced 4th major set of measures to address falling growth. According to us this has been the first proactive measures announced that might help more than previous measures announced.
The measures announced covered Corporate Tax , Minimum Alternate Tax , Buyback Tax & Additional Surcharge on Capital Gain. In total of these announcements the total revenue loss to tax collections would be Rs.1,45,000 cr ( 1.01% of GDP) that will be negated by the amount received by RBI during this fiscal that was 1.25% of GDP.
Announcements Made : Finance Ministry Released
According to us this is first proactive measure the government to address the concerns of corporate and investors in India & Abroad. It comes at crucial time where PM Modi has week long visit to USA where he will meet large corporation CEOs and make them aware that India is ready to address there concerns in terms of legal and regulations hurdles. And 15% corporate tax for new companies till March 2023 will bring tax rates to lowest in South East Asia.
Whether Indian companies that benefit from such tax cuts actual reinvest the benefit in capital expenditure that will result in pick up in private capex after being negligible growth phase for many years will be seen very closely.
While there is also some reports of India -USA Trade deal during the visit it will add to the certainty of investment and trade flow between two countries.
Though the measures provide a positive sentiment boost and is the best solution provided yet to address the investment issues raised by the corporates or investors.
According to our data below are top 20 companies out of Top 200 listed companies along with tax benefit they would receive post change in tax rate compared to tax rate of FY19.
Source : Company Annual Reports