Tax on Dividend to Non Resident

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manisha (Querist)
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08 January 2022 Dear Sir
Dividend paid by indian company to non resident...whether (FY 2021-22).

1) Liability to deduct TDS arise us 195?
2) Non resident liable to tax on it and file IT return?
3) what is process to pay or transfer dividend amt to non resident accounts
4) Need to file Form 15CA/CB or not.
5) Whether Indian Company liable for Div. Distri. Tax? if yes what is effective Rate.
6) Liability to deduct TDS at what rate if paid to Indian Shareholders.

Please revert on the same

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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08 January 2022 1 In case of a 'non-resident' shareholder, the Indian company will withhold tax on dividend income either (a) at 20% plus applicable surcharge and 4% health & education cess or (b) at a rate under the DTAA.
2 yes, if income exceed taxable limit.
3, and 4
Company has to file Form 15CA for any payments made to non-resident irrespective of the amount. In addition to this company is also required to obtain a Chartered Accountant's certificate in Form 15CB if payments to a non-resident shareholder made during the year exceeds INR 5 Lakhs.
5 No need to pay dividend distribution tax as it's taxable in the hands of share holders.
6 Any resident individual shareholder is in receipt of dividend exceeding Rs. 5,000 in a fiscal year, entire dividend will be subject to TDS @ 10%.