Finance ministry officials on Monday rejected industry demand for changes in budget proposals relating to dividends being taxed in the hands of shareholders and to the cap on employer’s tax-free contribution to the retirement savings of high earning employees.
Industry executives told finance minister Nirmala Sitharaman, revenue secretary Ajay Bhushan Pandey and other officials at a meeting of the Federation of Industrial Chambers of Commerce and Industry (Ficci) that the taxation of dividends in the hands of the shareholder at the applicable personal income tax rate would increase the tax liability on such payouts.