Big smile and two thumbs up: Industry's response to govt's $20-bn bonanza

The reduction in corporate tax rates follows a series of steps to boost demand and investments after growth slowed to 5% in the quarter ended June

India cut tax on local businesses to one of the lowest rates in Asia, while providing a more than $20 billion boost to revive economic growth from a six-year low.

Tax on all domestic companies will be lowered to 22% from a base rate of 30% currently, Finance Minister Nirmala Sitharaman said Friday. The effective new rate will be 25.2% including all additional levies and is applicable only for companies.

The new tax structure is effective from April 1, 2019. New companies formed from Oct. 1 will attract a base tax rate of 15% and effective rate of 17.01%, she said.