NRIs to gain more than resident Indians from govt's move to remove DDT

High-income resident Indians will end up with a higher tax outgo

One of the major changes proposed by finance minister Nirmala Sitharaman in her second Union Budget relates to the taxation of dividends. The Budget has proposed to abolish the Dividend Distribution Tax (DDT), and moving to the classical system of taxing dividend in the hands of individuals.

Current situation: Currently, a domestic company is required to pay DDT at the rate of 15 per cent (plus applicable surcharge and health and education cess) on the dividends. Further, dividend income from a domestic company is tax-free up to Rs 10 lakh. Dividend in excess of Rs 10 lakh is taxed at the