Update

Mumbai, Sep 20 (IANS): The Sensex closed Friday's session with an unprecedented 5.32 per cent advance as Finance Minister Nirmala Sitharaman made yet another big ticket announcement to kick start the economy.

The benchmark indices logged the biggest ever gains in the history of trading in India as the government slashed the effective corporate tax rate to about 25 per cent from 30 per cent.

Sensex advanced by a massive 1921.15 points to 38,014.62 while the broader Nifty jumped to 11,275.45 after gaining 570.65 points or 5.33 per cent.

The biggest beneficiaries among the 30 Sensex stocks were HeroMoto Corp, Maruti Suzuki, IndusInd Bank, Bajaj Finance, State Bank of India and Bajaj Finance, which gained in the range of 9 to 12 per cent.

The badly beaten down auto stocks gained the most. Nifty auto jumped over 9.90 per cent while the Nifty banks index gained over 8 per cent.

"The announcements made by the Finance Minister is very positive for the economy, corporates and stock market. The effective tax after surcharges and cess will come down from 33 per cent to 25.17 per cent," said Rusmik Oza of Kotak Securities.

Earlier report

Sensex surges over 1,500 pts after corporate tax cut announcement

Mumbai, Sep 20 (IANS): BSE Sensex surged over 1,500 points on Friday after the government slashed corporate tax for domestic companies and new domestic manufacturing companies among other measures.

The Nifty50 on the National Stock Exchange also crossed the 11,000 mark.

An official press note on Friday said: "In order to promote growth and investment, a new provision has been inserted in the Income Tax Act with effect from FY 2019-20 which allows any domestic company an option to pay income tax at the rate of 22 per cent subject to condition that they will not avail any exemption or incentive."

The effective tax rate for these companies shall be 25.17 per cent inclusive of surcharge and cess. Also, such companies would not be required to pay Minimum Alternate Tax.

Further, the government added a new provision in the Income Tax Act with effect from 2019-20 which allows any new domestic company incorporated on or after October 1, 2019 making fresh investment in manufacturing, an option to pay income tax at the rate of 15 per cent.

At 11.36 a.m., the Sensex was at 37,639.69, higher by 1,546.22 points or 4.28 per cent from the previous close of 36,093.47 points.

It has so far touched an intra-day high of 37,773.61 and a low of 36,085.74 points.

The NSE Nifty50 was trading at 11,066.10, higher by 361.30 points or 3.38 per cent from the previous close.