The government has estimated a revenue loss of Rs 1,400 crore in 2001-02 due to reduction in the dividend tax rate from 20 per cent to 10 per cent.
Replying to a question in the Rajya Sabha, minister of state for finance (revenue), Gingee N Ramachandran said all the dividend-paying domestic companies would benefit by this decision.
Ramachandran said the first 20 companies in order of the benefit would be: Indian Oil Corporation, Reliance Industries Ltd, State Bank of India, Bharat Petroleum Corporation, IDBI, Bank of Baroda, Larsen & Tubro Ltd, Hindustan Petroleum Corporation, Telco, ICICI, Knol Pharmaceutical Ltd, Bank of India, Castrol India Ltd, Nuclear Power Corporation, BSES Ltd, Mahindra & Mahindra Ltd, Gujarat Ambuja Cement Ltd, Corporation Bank, Western Coalfields Ltd, Oil and Natural Gas Commission.
He, however, added that the implication of the revenue loss could not be correctly foreseen, as the reduction in tax rates might well result in the enhancement in declaration of dividend, which in turn would compensate the exchequer by way of dividend tax.