Budget 2020: Government removed DDT. Stock Market News.



Budget 2020: Government removed DDT, revenue will be 25,000 crores less.


New Delhi: Finance Minister Nirmala Sitharaman has completely removed the Dividend Distribution Tax (DDT) from the stock market in her budget on Saturday. The Union Minister said that with this the revenue of the government is going to be reduced by Rs 25,000 crore. The Finance Minister said that the dividend received by companies will now be taxed by going to investors. Amar Ambani, senior president of Yes Securities, said that going to investors and taxing the dividend according to their income is not good news for domestic investors.

At present, the government collects a tax (cess and surcharge) of 20.35 per cent on dividends distributed by companies. Due to this, less money comes in the hands of investors. Naveen Aggarwal of KPMG India said, "The removal of DDT will increase the attractiveness of the stock market."

The companies that have given a big dividend to the stock market include Tata Consultancy Services, Infosys, Indian Oil, HDFC Bank, ONGC, Hindustan Zinc, Coal India, HDFC, ITC, Venda, NTPC, Bharat Petroleum, Hindustan Unilever and Reliance Industries. Apart from this, companies like Procter and Gamble, Graphite India, Nalco, Vedanta, SJVN, Rural Electrification, NLC India, Balmer Lawrie and Company, NHPC and PTC India also offer a higher dividend.

The market was expecting relief in tax rates. Veteran investor Basant Maheshwari had hoped for a softening in DDTT. During a conversation with ET Markets, he said, "Companies are reluctant to pay dividends because they have to pay tax."

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