."The news of government lowering corporate tax has rejoiced the market and gave rupee a big boost... The move was imperative as we are in a low demand cycle amid global idiosyncrasies," said Rahul Gupta, currency research head, Emkay Global Financial Services.

The government slashed effective corporate tax to 25.2 per cent inclusive of all cess and surcharges for domestic companies

Finance Minister Nirmala Sitharaman also said super-rich tax will not apply on capital gains arising from sale of any security including derivatives in hands of FPIs.

Ms Sitharaman expressed confidence that the tax concessions will bring investments in Make in India, boost employment and economic activity, leading to more revenue.

After the corporate tax rate cut accouncement, the S&P BSE Sensex index zoomed as much as 2,284.55 points to 38,378.02. The broader NSE Nifty benchmark index climbed to as much as 11,381.90, up 677.1 points from the previous close.

While markets "have reacted positively to FM's announcement, there are concerns over deteriorating fiscal situation", cautioned Rushabh Maru, currency and commodity analyst with Anand Rathi Shares and Stock Brokers.

The loss of revenue to the tune of Rs 1.450 lakh crore ($20.43 billion) through corporate tax cuts "will add to the fiscal mess", he added.

The dollar index, which gauges the greenback's strength against a basket of six currencies, meanwhile, fell 0.03 per cent to 98.23.

Brent crude futures, the global oil benchmark, rose 0.43 per cent to trade at $64.68 per barrel.