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The 15-per-cent Dividend Distribution Tax will continue to be levied on companies, the Finance Ministry has clarified.
Dismissing speculation on hike in tax, Revenue Secretary Shaktikanta Das said that companies for the last few years were paying dividend on net of taxes because of the way the Section was drafted.
“For example if the dividend was ₹100, the companies were deducting ₹15 and then on the remaining ₹85 they were calculating the dividend distribution tax.
“Now the dividend distribution tax will be paid on ₹100. There is no reduction in the quantum of dividend,” he explained in a post-Budget conference.
About the retrospective tax issue, Das said the Government will not ordinarily undertake retrospective legislation.
“It is a sovereign right of the Government but it will use this power with extreme amount of caution.
“With regards to cases in various legal fora they will reach their logical conclusion. All fresh cases with regard to transfer pricing cases will be reviewed by a committee of the CBDT,” he said while adding that detailed circular regarding scope for the new committee will be out in a week’s time.
Growth pushFinance Secretary Arvind Mayarm termed the Budget as growth oriented.
It has “taken steps to improve investor sentiment.
It is mindful of the need for equity in development and adheres to a strong fiscal consolidation plans.”
He expressed hope that the FDI flows will be much higher than previous year, though he refused to give numbers.
About raising the FDI cap in defence, he said that a list of industries have been given out specifying the ones that have to be licensed and the list has been pruned. “If the policy is undefined then FDI will not come in.
“But with the new simplified licensing policy of the Defence Ministry, there is greater scope for FDI to flow in.
“We expect this will boost FDI inflow in defence,” he said.
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