Equity benchmarks BSE Sensex and NSE Nifty rallied nearly 2% after Finance Minister Nirmala Sitharaman on Friday proposed to slash corporate tax for domestic and new local manufacturing companies.

The effective rate will be 25.17%, including additional charges .The measures will be implemented through an ordinance, she said.The FM said the new provision has been introduced into the Income-Tax Act with effect from fiscal year 2019-20 to promote growth.

It will allow any domestic company to pay income-tax at 22% subject to the condition that it will not avail any other incentive.

To improvise the government’s ‘Make in India’ initiative, another clause has been inserted into the Income-Tax Act with effect from 2019-20, allowing any new domestic company incorporated on or after Oct 1, 2019 making fresh investment in manufacturing an option to pay income-tax at rate of 15%.

The 30-share Sensex jumped 850 points to 36,707 at around 10.50 am (IST), while Nifty gained 169 points to 10,875.

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