Budget 2024 expectations: The abolition of dividend distribution tax has affected taxpayers in India. Resident shareholders are now taxed on dividends at their income tax slab rates, leading to a higher effective tax burden compared to the previous system. Such dual taxation distorts investment decisions as it incentivises companies to retain earnings rather than distribute them as dividends. To address this challenges, rationalisation of the tax treatment of dividends is crucial. Here's how Budget 2024 should address it.
