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Friday, Nov 08, 2002

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Dividend tax

The move to withdraw the dividend tax has met with stiff resistance from the CBDT since the shifting of the incidence of taxation from the hands of the company to shareholders hinders the growth of the capital market.

The shareholders are taxed twice, once at the time of receiving dividends by deducting tax at source by the company, and again by adding dividend income to their total income and paying the tax accordingly. Thus, the incentive to invest in the capital market will be affected substantially. It is hoped the CBDT will review the situation, and take a proper decision in this regard.

D. Suresh Babu

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