Calculation of dividend distribution tax

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Querist : Anonymous

Querist : Anonymous (Querist)

24 February 2014 Hi,

I usually calculate the Dividend Tax as below,

Dividend Amt : 100000
Dividend Tax @ 16.995%: 16995
Net Dividend to pay : 83004

Now one of my senior colleague confronts that the calculation should happen on the transfer amount as below.

Dividend to pay : 85475
Div Tax to pay @ 16.995 on above amt: 14526
Total dividend on Books: Rs. 100001/-.

He refers the billing calculations like ST / VAT for example. I could think this as wrong, but could not represent. Could anyone help me out on a correct calculation. Thanks.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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05 March 2014 Dividend distribution tax is to be paid OVER and ABOVE the amount of dividend.

It CANNOT be reduced from the dividend.

Dividend amount will be Rs. 1,00,000
CDT will be 16,995

You have to pay Rs. 1 lakh to the shareholders and Rs. 16,995 to the Govt.

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