Opinion - Letters to the Editor

Tax on dividends

Sir, — The dream budget of P. Chidambaram abolished the dividend tax payable by individuals and instead taxed the dividend payout by the companies at source.

There is no logic behind the reversal of this policy by the Finance Minister, Yashant Sinha. He could have retained Mr. Chidambaram's reform and raised additional revenue by increasing the dividend tax payable at source by the companies. The present move is a retrograde step.

Tax dividend payout at source will not only ensure full collection of the anticipated amount but also mean that the IT department will have to deal with a lesser number of assesses as the number of such companies is very small as compared to that of taxpayers.

K.S. Krishnaswamy,
Chennai

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