Industry & Economy
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PSU
PSEs seek exemption from dividend tax
K.R. Srivats
NEW DELHI, March 2
PUBLIC sector enterprises (PSEs), especially the large profit-making ones that are entirely Government-owned, are slowly realising the burden that the 12.5 per cent dividend distribution tax may impose on their business operations and cash flows.
While making dividends tax-free at the hands of the shareholders from April 1, the Budget has proposed a 12.5 per cent dividend distribution tax on domestic companies.
The annual payout of dividends by the PSEs alone is conservatively estimated at Rs 15,000 crore.
"PSEs, especially those who are entirely Government-owned, must be exempted from the 12.5 per cent dividend distribution tax. If the amounts are retained within the enterprise, they could be used for productive operational purposes", the Executive Director (Finance) of National Thermal Power Corporation (NTPC), Mr A.K. Singhal, suggested to the Chairman of the Central Board of Direct Taxes (CBDT), Mr P.K. Sarma, here. NTPC's last dividend payout to the Government was about Rs 700 crore for a 12-month period.
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