Dividend Distribution Tax for companies abolished
New Delhi: Union Finance Minister Nirmala Sitharaman sought to assure the people that schedule commercial banks and depositors money is absolutely safe and that a robust mechanism is in place to monitor them.
The assurance comes at a time when depositors, especially senior citizens, are worried about the fate of their bank deposits, which is the only source of income for many.
“Our government remains committed to taking measures to ensure that our taxpayers are free from tax harassment of any kind,’’ she stressed.
Sitharaman stated that Deposit Insurance and Credit Guarantee Corporation has been permitted to increase deposit insurance coverage to Rs. 5 lakh per depositor from Rs. 1 lakh at present.
She said that currently, more than 100 exemptions provided in I-T Act. Now around 70 of them have been removed in the simplified regime. The remaining will be reviewed over the coming years to simplify the system, she said.
She also introduced an optional new taxation regime, sans rebates and concessions, but with lower tax rates. This may eventually become the norm given the government has said it will review the rebates to simplify the taxation regime.
The Finance Minister has done away with the Dividend Distribution Tax (DDT). Companies will no longer be required to pay DDT. A total of Rs. 25,000 crore is revenue foregone due to DDT abolition, said FM. This will make India an attractive investment destination.