Ahmedabad: 'Ending DDT will add tax burden on HNIs'

AHMEDABAD: The Union budget announcement abolishing the dividend distribution tax (DDT), is expected to increase the tax burden on the high networth individuals (HNIs), according to eminent tax expert Mukesh Patel. Patel, along with former BJP minister, Jay Narayan Vyas; and former director of IIM Ahmedabad, Bakul Dholakia, presented the analysis of the Union Budget 2020-21 at Ahmedabad Management Association (AMA) on Sunday. Highlighting the impact on HNIs, Patel said, "By abolishing the DDT, higher tax will be collected from the HNIs. Till now, there was a fixed rate of 20% for DDT and if one's earning through dividend is greater than Rs 10 lakh, there was an additional tax of 10%. Therefore, the effective tax came to 30%. However, the same has now been increased and surcharges will continue. Those who earn an income of more than Rs 50 lakh will end up paying more taxes. Overall, it will have an adverse impact on individual taxpayers."Dholakia pointed out how the budget had little measures to curb the ongoing slowdown. "From a GDP growth rate of 8.1%, six quarters ago, we came down to 4.5%. This is a steep fall. However, clarity of vision is missing in the Budget as far as economy is concerned."Vyas said, "Shortfalls are rampant in GST and direct taxes. This is expected to hurt government spending. To revive economy, it is important that the government spends but does so strategically and judiciously."