Consolidated net profit of top listed companies by 13.20% reduction in corporate tax

Mumbai, Ta. September 21, 2019, Saturday

India's combined net profit and earnings from the top listed companies are showing a growth of 5.5 per cent due to the reduction in corporate taxes. This analysis is done on the basis of financial performance of these companies in Fiscal Year 1. Under the new tax regime, the tax liability of these companies is reduced by Rs 5 crore as compared to their fiscal year revenue.

This combined savings has been seen for seven companies in the BSE, BSE midcap and small caps index, whose effective tax rate was more than 8.5 per cent last fiscal year, said one analyst.

Due to the deduction in the tax rate, the combined net profit or earnings per share of the Nifty 4 Index companies has been increased by 5 per cent or Rs 1 crore. The calculation is based on the performance of the companies' financial year 1.

The combined net profit of Nifty 4 companies in FY01 was Rs. 5 trillion. In fiscal year 1, these companies paid corporate income tax at around 8% on their pre-tax profit.

BSE 1, BSE Midcap and small caps index included 5 companies that paid corporate tax of Rs 1.8 trillion before tax. The tax was paid on pre-tax revenue of Rs 1.8 trillion.

Now, if each of the companies mentioned in the above sample pays tax at the new rate of 8.5%, the tax liability on their money year 1 earnings is seen to be Rs.

Of this, Rs 1 crore is seen by non-finance companies, while the rest is seen by banks and NBFCs. Thus, the new tax rate is seeing a significant amount of money being saved in the hands of companies.