DTTA with USA.

This query is : Resolved

Awadhesh K. Bihari (Querist)
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22 July 2011 Dear All,

Pls. advise me what will be the tax implication in india if any dividend is declare by a WOS in USA for the indian company

Thank you

CS Awadhesh K.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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24 July 2011 The same shall be taxable in India @15% under sec 115BD which provides as under "(1) Where the total income of an assessee, being an Indian company, for the previous year relevant to the assessment year beginning on the 1st day of April, 2012 includes any income by way of dividends declared, distributed or paid by a specified foreign company, the income-tax payable shall be the aggregate of—
(a) the amount of income-tax calculated on the income by way of such dividends, at the rate of fifteen per cent; and
(b) the amount of income-tax with which the assessee would have been chargeable had its total income been reduced by the aforesaid income by way of dividends.

(2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing its income by way of dividends referred to in sub-section (1).

(3) In this section,—

(i) “dividends” shall have the same meaning as is given to “dividend” in clause (22) of section 2 but shall not include sub-clause (e) thereof;

(ii) “specified foreign company” means a foreign company in which the Indian company holds twenty-six per cent or more in nominal value of the equity share capital of the company.

Anuj
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