§ MR. BAILLIE COCHRANEasked Mr. Chancellor of the Exchequer, What is the right Income Tax to deduct in respect of dividends and interest for the half-year ending 30th June; and, why the East India Railway Company and the Bombay, Baroda, and Central Indian Railway Company have deducted 6d. in the pound; on the other hand, the London, Brighton, and South Coast, the Great Eastern, and some other companies have deducted 5d. in the pound?
§ THE CHANCELLOR OF THE EXCHEQUERSir, there are two rules on the subject—one applicable to Government stock, the other to the dividends of joint-stock companies. With regard to joint-stock companies, income tax is deducted from dividends according to the period of the year when they accrue; that is, the old income tax being payable up to the 5th of April, and the new income tax from that time, joint-stock companies ought to deduct in the present year 4d. per pound up to the 5th of April and 6d. per pound from that period, as the dividend covers both periods. But the rule as to Government guaranteed stock is this—the dividends are by the Act declared to belong to the quarter in which they are paid, and holders of stock will pay income tax according to the period of the year in which the payment falls. In the present year the holders of stock on which dividends become due after the 5th of April will pay 6d. in the pound for the whole period.