GST: LTCG, dividend distribution tax cut hopes fade for equity investors with tepid revenue collections
Abolishing dividend distribution tax (DDT) and long-term capital gains tax (LTCG) on shares may burn Rs 80,000 crore hole in government’s coffers; corporate tax reduction has already hit government revenues NEW DELHI: Scrapping dividend distribution tax (DDT), securities transaction tax (STT) and long-term capital gains tax (LTCG) on shares could result in a revenue loss of Rs 80,000 crore as the government finds it difficult to roll out any immediate tax incentives. Several news reports suggested that the finance ministry could offer multiple tax sops to equity investors, including abolishing the DDT and a tweak in the LTCG and even in the STT. It is worth noting that domestic firms pay DDT of about 20.35 per cent (including cess and surcharge) on dividends distributed by them to the stakeholders. Also, an individual receiving Rs 10 lakh as dividend has to pay an additional tax of 10 per cent. Equity investors have to pay LTCG of 10 per cent on profits of over Rs 1 lakh. STT is p