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Sinha rules out relaxation in dividend norms

The government on Saturday ruled out any relaxation of interim dividend norms and assured small investors that there would be no harassment in the process of dividend tax collection.

"There will be no relaxation," Sinha told reporters in New Delhi when asked about the minimum notice period for announcing a interim dividend as laid down in Listing Agreements of Securities and Exchange Board of India.

Coming down heavily on corporates for trying to circumvent law to avoid dividend tax, Sinha said "again they have come out in very poor light that they declared such huge dividends."

"What is the meaning of this? May be they won't declare any dividend in the next four years," he said on the sidelines of a seminar on globalisation in New Delhi.

Sinha also assured that there would be no harassment to small investors as the tax department would not ask for any tax deduction at source certificate after they get the dividends from the companies and mutual funds.

"We have not insisted on any TDS certificates. The tax would be deducted at source for those above the 10 per cent slab and a refund would be given. Those who are out of the 10 per cent income tax slab would also be refunded the tax amount," Sinha said.

The government was alarmed at the spate of interim dividend announcement by as many as 250 corporates just after the Budget announcement of a 10 per cent tax on recipients of dividends as against the previous system of imposing the tax on companies and mutual funds paying the dividends.

PTI

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