Budget 2025: Will India Finally Cut the 50% Tax on Dividends?

In India, dividends are presently taxed at the recipient's applicable income tax rate, and hence, for a high-income earner, it would translate to rates as high as 42.744% due to surcharges. This heavy burden of tax necessitates a revamp in the Union Budget of 2025. According to EY India, a leading consulting firm, the basic exemption limit should increase from ₹3 lakh to ₹5 lakh with personal income tax rates reduced particularly for the more vulnerable sections so that demand might be stimulated. Assocham also cites that personal income tax rates are much higher than that of corporate tax, and the hope is to bring down personal income tax to improve compliance and economic growth. Taxpayers have much expectations from Finance Minister Nirmala Sitharaman, who is poised to present the budget on February 1, 2025. 

SOURCE: ECONOMIC TIMES, TIMES OF INDIA