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Good Friday: 4 Major Steps taken by Finance Minister to boost the economy!

By Nivesh Gyan   20 September

Category: General

 4 Major Steps taken by Finance Minister to boost the economy!

Date:- Friday-20-2019

In today’s press conference taken by Finance Minister “Nirmala Sitharaman“, proved that the government is very eager to revive its economy from slowdown, and move towards its vision of $5 Trillion economy.. The following steps were taken by the honorable Finance Minister to boost the economy:
  

  1. Reduction of Corporate Income Tax to 22% from 30%.
    Now the effective tax for the domestic companies would be 25.17% inclusive all surcharge and cess. This step will immediately increase profitability of the companies, and allow them leeway to invest more.
  2.  

  3. Removal of Surcharge on the capital gain. 
    In order to stabilize the flow of funds into the capital market, it is provided that the enhanced surcharge introduced in Finance bill 2019
    shall not be applied on capital gains arising on sale of equity share in a company or unit of an equity-oriented mutual fund. It is also applied to Foreign Portfolio Investors (FPIs).
  4.  

  5. Taxation for a new manufacturing company
    The government has reduced taxation to 15% for new manufacturing companies. This will improve the sentiments of the companies in the manufacturing sector.
  6.  

  7. No buy-back steps were taken by listed companies
    In order to provide relief to listed companies which have already made a public announcement of buy-back before 5th July 2019, it is provided that tax on buyback of shares in case of such companies shall not be charged.

Impact of the measures taken by the government.

The steps taken by the government are quite positive and reflect their resolve to make amends and move forward. Also, the target of achieving $5 Trillion economy is being taken seriously. The steps will boost sentiments which were quite low in last few months. 

There was immediate impact on stock markets with a stupendous all round gain. We expect government to announce more steps, particularly on personal taxation, which will be further boost. Kudos to the government to yet again display tremendous resolve in handling the situation appropriately.

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