| It's too little to make a difference to corporate India. Parent companies of the country’s top 25 listed subsidiaries will save only around Rs 150 crore on account of avoidance of double tax on dividend paid by subsidiaries.
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| Based on the data compiled by Business Standard Research Bureau, the top 25 listed subsidiaries had paid over Rs 1000 crore by way of dividend payout to their parent companies in the last financial year 2006-07.
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| Assuming that the same rate of dividend payout is earned by the parent companies, they will save Rs 132 crore as corporate dividend tax in next fiscal 2008-09.
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| The corporate sector paid a dividend of Rs 47,190 crore in 2006-07 to its shareholders and paid DDT of Rs 6,606 crore. These listed companies received dividend of Rs 7,500 crore on account of investment, however only part of such dividend is recorded as dividend from subsidiaries.
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| The FM has provided relief in the dividend distribution tax (DDT) in the Union Budget for 2008-09, allowing the parent company to set off the dividend received from its subsidiary company against dividend distributed by the parent company.
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| A parent could avail of the DDT benefit only if the dividend received has suffered DDT and the parent company is not a subsidiary of another company.
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| Many public sector undertakings like Oil & Natural Gas Corporation, Steel Authority of India, Indian Oil, State Bank of India and large conglomerates like Reliance Industries, Grasim Industries, Mahindra & Mahindra (M&M) and Tata Tea will benefit from this move.
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| These four PSUs received Rs 850 crore from their subsidiaries by way of dividend in FY 2006-07. State Bank of India received Rs 598 crore from its subsidiary banks. ONGC received Rs 100 crore dividends from Mangalore Refinery and Petrochemicals, Indian Oil Corporation received Rs 145 crore from two of its subsidiaries, Chennai Petroleum (Rs 93 crore) and Bongaigaon Refinery (Rs 52 crore).
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| Grasim Industries received Rs 24 crore from UltraTech Cement while Hindalco received Rs 1.80 crore dividends from its subsidiary, Bihar Caustic. Tata Tea received a dividend of Rs 6.98 crore from Tata Coffee while TCS received a dividend of Rs 6.20 crore from CMC.
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| Reliance Industries and M&M received more than Rs 2 crore by way of dividends from their subsidiaries, Reliance Industrial Infrastructure and Mahindra Lifespace, respectively during FY06-07. |
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