Dividend distribution tax

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rajesh (Querist)
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08 April 2013 Dear All,

One Pvt. Ltd. Company has declared final dividend for the financial year 2012-13 in the Board Meeting held on 5-04-2013 i.e. in the year 2013-14. My question is what rate of DDT is applicable to company( rate applicable for the year 2012-13 or 2013-14).

Thanks

Rajesh

SANJAY TALATI

SANJAY TALATI (Expert)
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09 April 2013 The Domestic Companies are requirec to pay the Dividend Distribution Tax u/s 115 - O on the amount of dividend declared, distributed or paid by it.

The tax on distributed profit shall be paid within 14 days from the date of -

a. declaration of any dividend
b. distribution of any dividend; or
c. payment of any dividend whichever is the earliest.

The provisions of the Finance Bill will come into effect w.e.f. 01/04 except in certain specific provisions where the provisions proposed in the budget will be effective from any other date usually 01/06.

In your case, the earliest point will be the date of declaration of dividend by the Board of Directors at their meeting held on 05/04/2013. Hence, DDT will as applicable for AY 2014-15.