Reduction in tax rate on certain dividends received from foreign companies

     Section 115BBD of the Act was introduced as an incentive for attracting repatriation of income earned by Indian companies from investments made abroad. It provides for taxation of gross dividends received by an Indian company from a specified foreign company at the concessional rate of 15 per cent. if such dividend is included in the total income for the assessment year 2012-13 or 2013-14 or 2014-2015.

     With a view to encourage Indian companies to repatriate foreign dividends into the country, it is proposed to amend the Act to extend the benefit of lower rate of taxation without limiting it to a particular assessment year. Thus, such foreign dividends received in financial year 2014-15 and subsequent financial years shall continue to be taxed at the lower rate of 15%.

     This amendment will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent assessment years.

[Clause 37]

Concessional tax on foreign dividends extended to continue lower rate for repatriated earnings in future assessment years. Amendment extends the concessional taxation under Section 115BBD so that gross dividends received by an Indian company from specified foreign companies continue to be taxed at the lower rate of 15% for financial year 2014 15 and subsequent years, effective 1 April 2015 and applying to assessment year 2015 16 onward.