New Delhi: Taking a big decision on the economic front, the central government announced a cut in corporate tax. The government's move was welcomed by industry and other institutions. The move was also welcomed by rating agency Icra. They praised this decision of the Finance Minister and said that it will give a boost to investment. The rating agency has said that corporate tax cuts will accelerate economic growth and increase investment, leading to increased consumption.
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Although the effect of tax deduction may vary by sector, consumers will ultimately get the benefit of savings. The agency's vice president, Shamsher Dewan, said the government's move is going to strengthen business sentiment. It will definitely affect consumption. Also, it will be helpful in attracting investment over a long period of time. This is the largest tax deduction in the last few years in India. Earlier the rates of corporate tax were very high here.
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According to Icra, tax-paying industries in India are very limited. Sectors such as oil, gas, metal, mining and IT contribute the most to tax. Through research conducted on 420 companies, Iqra has revealed that sectors like automobiles, FMCG, consumer durables, building materials and oil and gas will benefit the most from the tax cut. At present, this sector pays more tax than the proposed 25.17%.