Tax introduction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013
Dividend received from an Indian company is exempt so is it that tax is deducted from dividend and then given .

Thank you

CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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08 February 2013 Section 10(34) exempts dividend referred in section 115-O

As per section 115-O, the company making dividend payments needs to pay Dividend Distribution Tax at the rate of 15%.

Once DDT is paid, dividend becomes exempt in hands of the receiver.

Also note that, if some income is exempt, there is no question of tax deduction at source.

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 so we cant actually say that dividend received from an indian company is exempt because ultimately tax is deducted and then given right?

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CA Suraj Lakhotia

CA Suraj Lakhotia (Expert)
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08 February 2013 It is not tax deduction.
When tax is deducted, you can claim credit of same while filing your returns.

As far as DDT is concerned, it is liability of the payer company to pay DDT.

Dividend received by you in your hands is exempt.

Querist : Anonymous

Querist : Anonymous (Querist)

08 February 2013 Ok Thank You