IMPACT OF DDT
What is Dividend Distribution Tax?
Dividend distribution tax (DDT) is the tax levied on the dividend paid by a company to its shareholders.
Budget 2024: What is Dividend Distribution Tax? Know How it will abolition impact the Indian economy?
In 2020-21, India's government abolished the Dividend Distribution Tax (DDT), shifting the tax burden on dividends from companies to shareholders directly. The move aimed to simplify taxation, enhance market appeal for Indian equities, stimulate domestic investment, and potentially attract more Foreign Direct Investment (FDI) into the country's economy.
Dividend income fuels surge in personal income tax: Motilal Oswal report
The transition from corporation-based dividend taxes to personal income taxes has been a major driver of the increased PIT in recent years. This shift has not only changed the tax dynamics but also underscored the substantial contribution of high-income earners to the tax pool through their dividend receipts.
It's double taxation: Share buyback tax should go, like DDT, says TV Mohandas Pai in a BCIC report
The buyback taxation should go just like the MoF did with the dividend distribution tax (DDT) that companies paid earlier, they said. “Shareholders tendering shares under the tender route should be made liable to pay capital gains tax. Consequently, shareholders will be liable to pay either income tax on dividend income or capital gains tax on buyback of shares,” the two taxation experts said in a Bangalore Chamber of Industry & Commerce (BCIC) report, highlighting the measures the MoF should take to overhaul India’s direct and indirect tax systems and processes.
DDT change: Distribution of surplus funds to change, too
Distributing dividends was subject to DDT at an effective tax rate of 20.56 per cent.
Proposed dividend distribution tax on InvITs, REITs may hit six planned trusts
The proposed tax framework in the Budget 2020 could also bring the proposed REITs including K Raheja; Blackstone , Brookfield and Prestige Estates, to a grinding halt.
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DDT to go in FY20-21: Should you bet on dividend yield stocks, mutual funds now?
The dividend yield of several companies could jump in the short term following the abolition of DDT.
Impact on alternative investment industry: Some hits and misses from recent policy announcements
Some of the steps proposed include a tax holiday period for eligible startups proposed will be increased to 10 years from 7 years. The turnover criteria for an eligible startup proposed to be increased to Rs 100 crore from the present Rs 25 crore. These may boost investment in startups.
'Budget proposals on DDT, personal tax not to impact mutual fund industry'
After the Union Budget was presented on February 1, there had been some apprehensions on the growth of MF sector in the coming days.
DDT removed: What different mutual fund investors should do to maximise gains
The dividend will become taxable in the hands of investors from April. Here's how it impacts investors.
Regardless of Budget changes, dividend plans of equity mutual funds were always a bad idea
DDT or no DDT, no one should have invested any money in the dividend plans. Instead of complaining about tax, just redeem your investments from dividend plans and shift it to equivalent growth plans.
RIP: dividend plans in mutual funds?
As per the budget 2020 proposal, dividends would be added to income and taxed according to the income tax slab applicable to the investor from April. As per the existing rules, mutual funds were supposed to pay dividend distribution tax or DDT on the dividends declared by them.
Amfi seeks clarification from tax authorities on removal of DDT, TDS introduction
Industry experts believe that the government's plan to tax dividend at the hands of investors could make dividend plans in equity and balanced schemes unattractive.
Has Budget 2020 imposed 10% TDS on capital gains from mutual fund units also?
As per a Budget 2020 tax proposal, dividends distributed by mutual funds would become subject to 10% tax deduction at source (TDS) from the next FY. Experts feel that this TDS levy would be applicable to capital gains from mutual funds also.
Business trusts’ $100 billion fund-raising plans at risk
The move also reverses a trend initiated by former finance minister Arun Jaitley, to provide tax stability for long-term infrastructure investors. Investors and developers ET spoke to said they plan to meet the finance minister and government officials this coming week, seeking a roll back of the step.
View: Budget enough to satisfy both optimists & pessimists
The optimists will cheer the government’s efforts to contain the fiscal deficit.
DDT: Gain for big payers, pain for owners
MNCs among biggest beneficiaries as they received no credit for DDT paid by their Indian arms, say analysts.
View: Changes in direct tax regime will impact taxation of individuals and companies
Changes will impact taxation of individuals and companies, and change the ambit of taxation of non-residents.
Budget below par, but market reaction 'irrational', say D-Street experts
Fiscal deficit at 3.5% for FY 2021 in line with market expectations, says Lakshmi Iyer.
Technology industry cheers Budget's focus on AI, ML; asks for revival of SEZ policy
One of the key asks from NASSCOM for boosting the start-up ecosystem was the issue of ESOPs and allowing scaled up startups to benefit from the tax incentives.
Dear FM, never mind the stocks crash; you can’t please everyone all of the time
Market sentiment was already weak in the country due to the ongoing protests.
What to expect from Budget 2020: Tweaks in I-T rates, DDT & LTCG
A big change expected in the Budget is removal of dividend distribution tax.
Does your dividend income need to be taxed thrice?
Dividend, no matter the quantum, is tax-free in the hands of foreign shareholders.
View: India needs taxes high enough for revenue growth, low enough for investments
Higher taxes will drive rich people out, lower taxes will reduce revenue, making it almost impossible to fix.
How the proposed new Direct Tax Code could cut your income tax
The Akhilesh Ranjan taskforce, set up to suggest an overhaul of the Income Tax Act, has also recommended sweeping changes in the tax slabs. It submitted its report on the new Direct Taxes Code to the government in August.
Abolish DDT; LTCG, STT should stay; rework personal income tax rates: Direct Tax Code Panel to Govt
A lowering of the tax slabs can hit government fiscs by up to 30 basis points.
New tax going to discourage share buyback, feels market
Sitharaman has proposed to extend the buyback tax at 20 per cent to listed companies as well.
Taxing buybacks at 20% to close loophole to avoid DDT
Any negatives on growth resumption and/or fiscal slippages could derail this momentum.
Budget Special: Increase Sec 80C limit, make stamp duty uniform
India Inc is expecting that the FM will reduce DDT from 20 per cent currently to 10 per cent.
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