• Dr Gurnam Singh Rasoolpur

This paper examines the impact of non debt tax shield on capital structure decisions through a case study of corporate sector of India by classifying the capital structure of sample companies by non debt shield. The present study, although an exploratory effort, is limited to 298 out of top 500 private sector manufacturing firms selected on the basis of sales turnover for the year 2004-2005, published in Business Today, which covers a time span of eleven years commencing from 1995-96 to 2005-06. Hence, the study reveals that with the rise in non debt tax shield ranges, the number of companies is moving from higher capital structure ranges towards lower capital structure ranges under the four broader categories of capital structure ranges during the period under study. Overall, rise in non debt tax shield results in the shrinkage of number of capital structure ranges as well as decline in the distribution of companies to the higher capital structure ranges also during the period under study. Thus, it emerges that at lower non debt tax shield, there exists higher capital structure ranges and vice-versa, which represents negative relationship between capital structure and non debt tax shield during the period under study. It shows that, firstly, higher non debt tax shields are generating higher internal resources implying less dependency of companies upon debt capital. Secondly, the companies use debt to save tax liabilities. Higher non debt tax shields also save the tax liabilities. That is why the companies are using lesser amount of debt in their capital structure.

Capital Structure, Non Debt Shield, Shrinkage

"IMPACT OF N. D. T. S. ON CAPITAL STRUCTURE DISCUSIONS: EMPIRICAL EVIDENCE FROM THE INDIAN CORPORATE SECTOR", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 3, page no.401-410, March-2018, Available :http://www.jetir.org/papers/JETIR1803335.pdf

"IMPACT OF N. D. T. S. ON CAPITAL STRUCTURE DISCUSIONS: EMPIRICAL EVIDENCE FROM THE INDIAN CORPORATE SECTOR", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 3, page no. pp401-410, March-2018, Available at : http://www.jetir.org/papers/JETIR1803335.pdf