This research paper aims to analyze the impact of the abolition of dividend distribution tax on dividend payouts in India. The Indian government recently announced the removal of DDT, which was previously imposed on companies distributing dividend to their shareholder. This decision was made with the aim of promoting investment, booting economic growth and attracting more foreign direct investment. The finding of this research will provide insight on the potential effect of this policy change on different stakeholders including companies, shareholders and the overall Indian economy. It is anticipated that the removal of DDT will have positive implications for companies, as it will free up more cash flow for investment and expansion. This may also lead to an increase in dividend payouts, thereby benefiting shareholders. The study investigates the rationale behind the decision to abolish DDT the consequences for companies and investors, and the overall economic implications. This paper delves into the potential effect on Indian economy, as well as on investors, companies, and the overall market. The study aims to provide a comprehensive analysis of the implications of this policy shift and its potential consequences for various stakeholders. Through a thorough examination of relevant data and economic indicators, this research paper aim to shed light on the potential outcomes of abolishing the dividend distribution tax in India. By examining relevant literature, empirical evidence, and industry experts’ perspectives, this research endeavour’s to provide a comprehensive understanding of the effects of this tax reform.