Dividend tax u/s115o

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Querist : Anonymous

Querist : Anonymous (Querist)

07 August 2012 When Dividend tax paid by the Company? please give me some computation about calculating Dividend Tax

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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07 August 2012 SECTION 115-O :— TAX ON DISTRIBUTED PROFITS OF DOMESTIC COMPANIES

The Domestic Company shall, in addition to the income tax chargeable in respect of its total income, be liable to pay additional income tax on any amount declared, distributed or paid by such company by way of dividend (whether interim or otherwise), whether out of current or accumulated profits.

Such dividend distribution tax shall be payable @ 15% plus surcharge @ 5% plus education cess @ 2% plus SHES @ 1% of amount so declared, distributed or paid.

The principal officer of the domestic company and the company shall be liable to pay the tax on the dividend distribution profit within 14 days from the date of declaration or distribution or payment of any dividend, whichever is earlier

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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07 August 2012 The distributed profit on which tax is paid u/s 115-O (1) shall be exempted in the hands of share holder u/s 10(34).

The tax on distributed profits shall be payable by domestic company whether or not such profit is distributed out of current year profit or accumulated profit.

Dividend received from a foreign company is not covered by Sec.115-O and shall not be exempted in the hands of shareholders u/s 10(34). Such dividend is taxable in the hands of shareholder at the normal tax rates.

Dividend on both preference shares and equity shares shall be considered.

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