Investors without TINs to pay more AIT on dividend
Any company offering 30 per cent or more cash dividend to investors will get 10 per cent rebate on its income tax as per the Finance Bill 2014 which was passed by the parliament on Saturday. National Board of Revenue officials said that if any company declared any amount of stock or stock plus cash dividend it would not get the rebate unless the amount of cash dividend was 30 per cent or more.
The Finance Bill 2014 comes into effect on July 1.
The Finance Act 2013 has a provision that any company offering 20 per cent dividend would get 10 per cent rebate on its income tax but it was clear whether the dividend would be cash or stock.
The finance minister in his budget speech on June 5 withdrew the provision for giving any tax rebate based on dividend but he on Saturday proposed for giving 10 per cent rebate on 30 per cent cash dividend declaration.
The new finance bill also increased the tax-free dividend income to Tk 20,000 from existing Tk 10,000.
But, it also included a provision that stock investors without tax identification numbers would be charged 15 per cent advance income tax on dividend income over Tk 20,000.
The TIN holding stock investors will be charged the usual 10 per cent AIT on income over Tk 20,000.
The finance minister on Saturday also withdrew another proposal for imposing capital gain tax on share investors.
-With New Age input