The government's decision to put forward the Income Tax (Amendment) Bill 2021 has become a hot debate among financial experts, as the government aims to generate Rs 70 to Rs 140 billion through these amendments.
As per Topline Securities in its report, among the major amendments made in the bill, the government amendment in the removal of relief on Inter-Corporate dividend (103C) will result to have 5-7% impact on the profitability of holding companies like Engro Corp, International Industries (INIL), Kohinoor Textile (KTML), among others.
Secondly, the addition of a clause pertaining to IPPs (132C) under which the government intends to discontinue exemptions granted to IPPs who wish to get a Letter of Intent after Jun-2021. The expert believes that the discontinuation of exemption will not impact existing IPPs or those will have already obtained a Letter of Intent from the government like Lucky Energy, Thal Nova, Thar Energy amongst others.
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