Taxation of dividends shifts to shareholders, abolishing payer-level tax and imposing withholding and limited deductions under transitional rules.

Removal of Dividend Distribution Tax and return to a classical system makes dividend and income from units taxable in the hands of shareholders and unit holders at their applicable rates, removes payer-level additional tax and related exemptions, limits deductions against such income to interest expense capped at twenty per cent, reallocates taxability for business trusts and interposed vehicles to unit holders, and introduces expanded withholding obligations and transitional rules phasing out payer-level taxation.

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