Revenue-hungry finmin mulls taxing dividends of super-rich
According to sources, the idea is to tax the dividend income beyond a certain threshold, say Rs 20 lakh, in the hands of the receiver also, at the same rate it is taxed at the giver’s end. Currently, companies pay 15% dividend distribution tax (DDT) but the dividend is tax-free in the receiver’s hands. If the proposal is cleared, only sparingly would the new impost be levied, so that it impacts only the really affluent like promoters of large companies and other significant shareholders.
Listed private companies paid dividends of close to R60,000 crore to promoter groups in 2011-12. This is one chunk that could be brought under the additional dividend tax. The government is inclined to prefer this option over the idea of raising the marginal rate of personal income tax for the super-rich, as suggested by some economists because it could be targetted more efficiently at the “super-rich.”
Among private sector players, Tata Group, Reliance Industries, Vedanta Group, Wipro and Hero Group paid the highest dividends to
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