Finance Minister has hit the bull's eye, yet again. A time when the entire investor community was getting attracted towards the glorious returns from debt funds, FM has put the breaks on it by increasing the Dividend Distribution Tax (DDT) on all non-equity funds. Let's discuss dividend distribution tax, along with the nuances of new tax rate on investors. Dividend Distribution Tax (DDT) has always been controversial because of its double taxation nature. It's once again in the news, as in the Union Budget 2013 – 2014, finance minister has doubled the tax rate on dividend distributed by all non equity funds from 12.5 per cent to 25 per cent. This will reduce returns from debt funds and will motivate investors to opt for other options like corporate fixed deposits. What is Dividend Distribution Tax?