News Karnataka
Sunday, December 04 2022

Concessional tax regime on foreign sourced dividends to be withdrawn

Concessional tax regime on foreign sourced dividends to be withdrawn
Photo Credit : IANS

New Delhi: Indian companies receiving dividend payments from their foreign-based subsidiaries will be taxed more than the current concessional tax rate of 15 per cent, the Budget document showed on Tuesday. At present, a concessional tax regime on foreign sourced dividends exists in India. This regime will be withdrawn.

“Clause 27 seeks to amend Section 115BBD of the Income-Tax Act relating to tax on certain dividends received from foreign companies,” the Finance Bill 2022-23 read.

The said section, inter-alia, provides that in case of an Indian company whose total income includes any income by way of dividends declared, distributed or paid by a foreign company, in which the said Indian company holds 26 per cent or more in nominal value of the equity share capital, such dividend income shall be taxed at the rate of 15 per cent.

As per the Budget document, a new sub-section will be inserted to remove the Concessional tax regime provision to the assessment year beginning April 1, 2023.

“This amendment will take effect from April 1, 2023 and will, accordingly, apply in relation to the assessment year 2023-2024 and the subsequent assessment years,” it said.

According to Rajat Mohan, senior partner at AMRG & Associates: “Inward repatriation in the form of dividends from foreign subsidiaries of Indian multinationals will become dearer.

“New-age startups with headquarters in India may plan to move out holding companies to international jurisdictions from where repatriation and investments are more tax efficient.”

Share this:
Support NewsKarnataka's quality independent journalism with a small contribution.

How useful was this post?

Click on a star to rate it!

Average rating 0 / 5. Vote count: 0

No votes so far! Be the first to rate this post.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Leave a Reply

Your email address will not be published. Required fields are marked *

Visit 7Jackpots and find the best online casinos in India! Play the most popular casino games for real money!

Find the best odds at 10Cric and ipl betting 2021! Signup today and get up to a 100% deposit bonus.

To get the latest news on WhatsApp