The Finance Minister Arun Jaitley’s announcement of additional dividend distribution tax (DDT) means promoters such as Azim Premji, Tata Sons and Shiv Nadar among others will have to shell out more on taxes.
For an annual dividend income of Rs.10 lakh or more, the investor will pay a DDT of 10 per cent.
Based on the dividends paid by companies for the financial year 2014-15, this is what these promoters may have to forgo as taxes from this fiscal year.
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Azim Premji founder of Bangalore-based Wipro, in which he holds 73.39 per cent, earned a dividend of Rs 2,175 crore. The company paid a total dividend of Rs 2,964 crore for the fiscal year 2014-15 to its shareholders.
Going by what the FM has said, Premji may have had to shell out about Rs 217 crore as dividend tax.
This will be true for several other promoters and promoter holdings. For instance, Tata Sons which drew a total dividend of Rs 11,336 crore from India's largest IT services provider Tata Consultancy Services (TCS), will have to shell out Rs 1,133 crore as tax.
Similarly, Shiv Nadar founder of HCL Technology will technically pay Rs 144 crore as dividend tax for the Rs 1,441 crore he earned as dividend from the company’s share holding of 60.43 per cent.
