FM announces corporate tax cut, Sensex jumps 2k points

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Sensex jumped the highest on Friday as biggest ever single day gains with rise of more than 2,200 points and Nifty gained 668 points following announcement of Finance Miister Nirmala Sitharaman of a massive tax cut for domestic corporates.

The Sensex closed at 5.32 percent advance, which was a massive 1921.15 points to 38,014.62 and Nifty gained 570.65 points (5.33 percent) to 11,275.45.

The auto stocks gained the most during the trading hours. Nifty auto rose more than 9.90 percent.

The biggest beneficiaries were HeroMoto Corp, Maruti Suzuki, IndusInd Bank, Bajaj Finance, State Bank of India and Bajaj Finance. All these gained between 9 and 12 percent.

Nirmala Sitharaman lowered corporate tax to 22 percent and Minimum Alternate Tax (MAT) is not required to be paid. With the announcement the effective tax rate would be 25.17 percent if cess and surcharge is included.

The revised rates would be effective from October 1 and the key sectors to benefit are automobiles, defence, hotels and gems & jewellery.

The GST rate on hotel rooms has been slashed down too from 18 percent to 12 percent for those having tariffs of up to Rs 7,500 per night. No GST will be charged on room tariffs below Rs 1,000 per night.

The step is believed to boost up hospitality and tourism industry. Hotels in India will also become more competitive with the world.