Income tax

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vijay

vijay (Querist)
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23 July 2012 please explain me tax treatment on dividends!!.......which dividend are taxable and which are not??

Sanket

Sanket (Expert)
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24 July 2012 The dividend so declared by the domestic company shall be exempt from tax in the hands of shareholders u/s 10(34) of the Income Tax Act, 1961. But this provision is not applicable to foreign company and deemed dividend.

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Guest

Guest (Expert)

24 July 2012 however dividend from co-operative banks / societies are also liable to tax

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SANYAM ARORA

SANYAM ARORA (Expert)
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24 July 2012 Agreed to the replies of Experts.

Regards

Sanyam Arora

vijay

vijay (Querist)
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24 July 2012 thank you sir....sir will you please also explain me what is a domestic company....does that mean a indian company.???

SANYAM ARORA

SANYAM ARORA (Expert)
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24 July 2012 A Domestic Co. means an Indian Co. or any other Co. with respect to its Income liable to pay Tax under I.T Act.

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Sanket

Sanket (Expert)
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24 July 2012 A Domestic Company means an Indian Company or any other company with respect to its income, liable to tax under the Income-Tax Act, has made the prescribed arrangements for the declaration and payment within India, of the dividends (including dividends on preference shares) payable out of such income.

Thus, all Indian Company are treated as Domestic Company but all Domestic Company are not Indian Company.

If a Foreign Company makes prescribed arrangements for
payment of dividends in India it shall be treated as Domestic
Company.....