The Budget 2022 has tried to explain the intended meaning, bring parity, and combat tax evasion in a variety of ways. One such method is called Dividend Stripping.
Dividend stripping was used by the investors to evade taxes by recording a loss to offset capital gains income and earning tax-free dividends. To deter dividend stripping, the finance minister implemented Section 94(7) of the Income Tax Act in Budget 2022. Furthermore, the DDT (Dividend Distribution Tax) was discontinued, requiring shareholders to pay tax on dividend income.
You can read more about Dividend Stripping here -
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