Corporate Tax Rate Slashed

Nirmala Sitaraman, FM, gave a surprise gift to corporate world by binging down corporate tax to 22% effectively now its 25% against 35% albeit without opting for other concessions. This will increase Nifty EPS surely and the market has therefore boomed by adding more than 550 points to Nifty which now stands above 11300.

I rather think that dividend distribution tax should have been removed also and dividends in hands of recipients should have been clubbed with their incomes which would have been a progressive step rather than a regressive measure at present. Surely govt must have been under pressure from lobby of rich to do it.

Secondly sacrificing revenue is not a good idea for the tax to GDP ratio is still low in India but looking at the sombre mood prevailing for last few months may have prompted govt to do it. Any way, the taxes may always be increased like they have been brought down. Enjoy appreciation in your portfolio values but also encash profits where you think it is satisfactory. Hope you have investment in right scrips by following our advice.

Krishna Khandelwal

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