Talebearer

DDT may be cut

There’s a buzz that the Finance Ministry is considering a proposal to revert the dividend distribution tax (DDT) to 12.5 per cent in Budget 2008-09—the DDT rate was raised from 12.5 per cent to 15 per cent in the last Budget, much to the disappointment of companies and the stock market.

The change of heart is apparently prompted by the realisation that the hike in DDT rates has not led to any significant increase in revenues for the government. There is also a feeling in North Block that higher DDT rates may have been discouraging companies from sharing wealth with investors.

— Kapil Bajaj

Tax breaks for REITs

The government is considering a SEBI proposal to provide tax breaks to real estate investment trusts (REITs)—they invest in properties, including apartments and commercial complexes, and give indirect exposure in realty to investors. To promote REITs, SEBI wants a tax treatment for them similar to mutual funds.

The government may spell out the policy for REITs in the Budget.

— Rishi Joshi