« Top Headlines » Open DEMAT Account in 24 hrs  New Income Tax Act: ITR forms to be issued prior to FY28, says govt  GSTR-9C Explained: Turnover Limit, Due Date, Statement Format & How to Prepare It in Tally Prime (2025 Update)  Will Income Tax Department release new ITR forms by January 2026? Finance Ministry says this  The Government of India has strengthened MSME protection through strict payment rules, ensuring that Micro & Small Enterprises receive timely payments from buyers. Under the MSME Development Act (MSMED Act), 2006, buyers must make payments within:  ITR Refund Delays in India: Why They Happen & How to FastTrack Your Refund in 2025  ITR Refund Delay: From Bank Errors To Department Checks, 5 Big Reasons Your Refund Gets Stuck  Income Tax Slabs 2025: New Vs Old Regime; Which One Is Better For You For FY2025-26?  Seamless Integration: How Tally Prime Connects Businesses to the Digital Economy  Govt to notify new ITR forms, Income Tax Act 2025 rules by January 2026: CBDT chief  Digital Efficiency for MSMEs: The Tally Prime Advantage  5 Ways Tally Prime Reduces Cost and Boosts Productivity for Startups «  Input services and availability of credits... Foreign PE funds may come under surveillance... » I-T for differential tax on dividends February, 18th 2008 Move targeted at companies with high promoter holdings.   The income tax (I-T) department has suggested a differential system for levying dividend distribution tax on companies in its list of pre-Budget suggestions to the Central Board of Direct Taxes.   The IT department has said companies that have very high promoter holding often issue huge dividends to take advantage of the relatively low dividend distribution tax of 12.5 per cent.   The promoters of these companies, however, fix their annual salary and other perquisites at lower levels since the income tax rate is much higher at 33.6 per cent.   To plug this tax-avoidance strategy by several big companies I-T officials have suggested that instead of a flat rate dividend tax should be linked to the amount of payout based on the proportion of shareholding.   In other words, shareholders with a larger shareholding in the company should be taxed at a higher rate.   This would spare small shareholders whose annual dividend income is comparatively small from a higher tax rate, the I-T department has said.   Tax officials have also suggested restrictions on the use of carry-forward losses and depreciation in cases of demergers under section 72 of the Income Tax Act, 1961.   Officials have come across several cases of fake demergers to take advantage of the provision and set off gains against carry-forward losses to minimise taxes.   Since there are severe restrictions on the use of this provision for amalgamations, group companies often demerge the loss-making businesses of one of their loss-making companies and merge them with a profit-making company.   Thus, the profits of the company are set off against losses of the entity which is merged. There are currently no eligibility criteria for offsetting the losses of demergers against profits of other companies. Company promoters often pay themselves high dividends and understate income, says I-T department Dividend tax should be linked to the amount of payout based on the proportion of shareholding instead of a flat 12.5% Differential rates will protect small shareholders Restrictions on carry-forward losses to minimise incidence of fake demergers