Concessional Rate of Tax of 15 Percent on Dividend Received from its Foreign Subsidiary by a Company Continued for One More Year
The Finance Bill 2013-14 proposes an investment allowance at the rate of 15 per cent to a manufacturing company that invests more than Rs.100 crore in plant and machinery during the period 1.4.2013-31.3.2015. Presenting the Union Budget in the Lok Sabha, the finance minister Mr P Chidambaram said that no large economy can become truly developed without a robust manufacturing sector. He also propsed to extend the ‘Eligible Date’ for projects in the power sector to avail of the benefit under Section 80-IA of the Income Tax Act from March 31st 2013 to March 31st 2014.
Mr Chidambaram also announced that the concessional rate of tax of 15% on dividend received by an Indian company from its foreign subsidiary shall be continued for one more year. This will encourage repatriation of funds from overseas companies . Further, the Indian company shall not be liable to pay dividend distribution tax on the distribution to its shareholders of that portion of the income received from its foreign subsidiary.
Source – PIB
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