Indian benchmark indices recorded their biggest single-day gains in last 10 years, with the BSE Sensex and NSE's Nifty 50 surging 4 percent, after finance minister Nirmala Sitharaman announced a cut in corporate tax rates for domestic companies and new manufacturing companies.

The Sensex rose 1,680.14 points, or 4.65 percent, to 37,773.61, and the Nifty 50 advanced as much as 381.95 points, or 3.56 percent to 11,086.75.

At 11.32 AM, the Sensex was trading at 37,694.74, up 1,601.27 points, or 4.48 percent. The Nifty 50 was up 362.95 points or 3.39 percent at 11,067.75.

The midcap and smallcap indices advanced over 2 percent.

All the sectoral indices, except media, advanced led by banking and financial services and auto sectors, which rose over 3 percent. FMGC, pharma and realty also gained over 1.5 percent.

Sitharaman said the government has proposed that any domestic company will get an option to pay income tax at the rate of 22 percent, subject to condition that they will not avail any exemptions or incentives. The effective tax rate, for these companies, shall be 25.17 percent inclusive of all surcharge and cess. Previously, the tax rate was around 34 percent.

The government has also proposed that 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 percent. The effective tax rate for these companies shall be 17.01 percent inclusive of all surcharge and cess.

Sitharaman said the company, which does not opt for the concessional tax regime and avails the tax exemption or the incentives, shall continue to pay tax at the pre-amended rate.

“In order to provide relief to listed companies, which have already made a public announcement of buyback before July 5, 2019, it is provided that tax on buyback of shares in case of such companies shall not be charged,” said Sitharaman.

Latest measures by the finance minister came ahead of a statement from the GST Council.