DDT goes, dividend to be taxed in hands of recipient

New Delhi, February 1

The government today proposed to remove dividend distribution tax (DDT) on companies, and henceforth the tax will be shifted to recipients at the applicable rate. Finance Minister Nirmala Sitharaman while unveiling the Union Budget said the proposal would make India more attractive market for investment.

“This is another bold move, which will further make India an attractive destination for investment,” she said, adding it would result in a revenue sacrifice of Rs 25,000 crore per annum.

Currently, companies are required to pay dividend distribution tax (DDT) on the dividend paid to its shareholders at the rate of 15% plus applicable surcharge and cess, in addition to the tax payable by the company on its profits.

“The dividend shall be taxed only in the hands of the recipients at their applicable rate,” she said. — PTI