|
|
|
|
Articles: My Thoughts | WHY INTEREST INCOME WHOLY TAXABLE AND DIVDENDS ARE FULLY EXEMPT?
- Mr. Madhu Seshanand
| |
Kelkar committee’s recommendation of abolition dividend tax and taxing entire interest income (abolition of sec80L) is not justified. The justification may be the company already paid tax on behalf of shareholders and therefore shareholders need not be taxed again on dividends. In such case it is implied that there is no difference in the eyes of tax laws whether company pays or individual shareholder pays the tax.
When Company can pay taxes on behalf of shareholders why recoveries cannot be made directly from shareholders instead of from company? (Unlimited liability to shareholders as there is no difference whether it is received from shareholder or company by applying the same logic). But this is against the fundamental principle of Joint Stock Company. Similarly allowing company to pay taxes on behalf of shareholders is illogical.
The reason of double taxation cannot be applied in case of income from dividends .How can Company pay tax on behalf of shareholders, when it is entirely separate legal entity from shareholders? The real tragedy of recommendation is unrestricted exemption to dividend income and taxing entire interest income (abolition of sec80L) and agriculture income. Why the normal income tax slabs cannot be applied to dividend income as in the case of agriculture income? It is crystal clear rich people will certainly benefited by this exemption.
The abolition of dividends tax will clearly save the rich people from paying taxes. The income of rich people and upper middle class (who can take risk by investing in shares) by way of dividends are not taxable without any limit but agriculture income is taxable. What an anomaly? Government should consider seriously these anomalies before accepting the recommendation of abolition of dividend tax.
B.M.SESHANAND
Email:seshanand2002@yahoo.com
| Read 8 Comment(s) posted so far on this Article!
| |
|
|
|
 |
| Advertisements |
|
|
|
|
| Advertisements |
|
