Shortly after Finance Minister Nirmala Sitharaman announced slashing of corporate tax for local and domestic manufacturing companies on Friday, Congress leader Jairam Ramesh took to Twitter welcoming the move. However, while he welcomed the reduction in the corporate tax rate, he expressed doubts about whether the move will revive investment. He added that the step does nothing to dispel the fear that persists with India Inc.

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In another tweet, Jairam Ramesh chose to question the timing of the Finance Minister's announcement with PM Modi's 'Howdy, Modi!' event which is going to take place on September 22 in Houston, Texas. Asking if it's PM's "Trump Card", the Congress leader said: PM can now say, "I have come to Texas promising lower taxes".

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Big announcements by FM

Finance Minister Nirmala Sitharaman on Friday addressed a press briefing announcing the reduction in the income tax rate for companies by almost 10 percentage points to 25.17 per cent and offered a lower rate to 17.01 per cent for new manufacturing firms in order to boost economic growth rate from a six-year low by incentivising investments to help create jobs. She said that the reduction in tax rates has been done by promulgating an ordinance to an amendment to the Income Tax Act with effect from fiscal year 2019-20. He also highlighted that "such companies shall not be required to pay any minimum alternative tax". Sitharaman added that in order to attract investment in manufacturing, local companies incorporated after October 2019 will pay tax at 15 per cent.

"A new provision has been inserted in the Income Tax Act with effect from the fiscal year 2019-20, which allows any domestic company an option to pay income tax at the rate of 22 per cent subject to the condition that they will not avail any exemptions or incentive," she said.

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(With PTI inputs)