Corporate tax cuts are expected to benefit the financial, oil, metals, mining and capital goods sectors.

Mumbai, Ta. September 23, 2019, Monday

The Finance Minister Nirmala Sitharaman's analysis of last week's reduction in corporate taxation has put various figures by analysts in terms of how much money companies can save on tax, but analysts are almost unanimous about which sector companies will benefit more.

According to available data, corporate tax cuts have seen the biggest gains for companies in the banking and financial, oil and gas, metals and mining, consumer and capital goods sectors, while companies in the pharma, IT and power utilities sectors have limited profitability. General Chat Chat Lounge

The total number of companies in the BSE-5 is calculated to save Rs 5 crore.

The Finance Minister's decision to reduce corporate tax from 3 percent to 5 percent, analysts are optimistic about improving companies' revenue, margins and capacity expansion.

At present, the low tax rates do not seem to be of particular benefit to pharma and software exporters. Another analyst said that the central government will suffer from the Rs 1.5 lakh crore collapse of the government treasury due to the decision to reduce taxes.

However, according to research firm Crisil, the three listed companies are expected to save Rs 1 crore in taxes. In another analysis, India's combined net profit and earnings of the top listed companies have been growing at a rate of 5.5 per cent.

This analysis is based on the financial performance of these companies in Fiscal Year 1. Under the new tax regime, the tax liability of these companies can be reduced by Rs 5 crore as compared to their fiscal year revenue.

However, how the end users benefit from the reduction in the tax rate depends on the strategy the companies adopt. We have to look at whether companies use their savings in taxes to reduce their debt or reduce their product prices or reinvestment, ”said another analyst.