vishnupriya (CA Final) (1418 Points)
26 April 2010'A' is an investing Co. whose main business is only investing the amount in other company's shares. It receives dividend from other companies after cutting down CDT. Now its turn to pay dividend to its share holders.
Is it liable to cut CDT & pay dividend to its share holders?
If so, there will be double taxation on the same income?
clarify my doubt......
CA Sanjay Jha
(ACCOUNTS MANAGER)
(914 Points)
Replied 26 April 2010
yes
CDT applicable all divedend paid including Dividend received by company.
Nicky
(Chartered Accountant)
(245 Points)
Replied 26 April 2010
Vishnu Priya,
You are pretty correct about double taxation and the same has been provided in the Income Tax under a section named 115-0(1A), but only as far as holding-subsidiary relation is concerned as under:
[(1A) The amount referred to in sub-section (1) shall be reduced by,—
(i) the amount of dividend, if any, received by the domestic company during the financial year, if—
(a) such dividend is received from its subsidiary;
(b) the subsidiary has paid tax under this section on such dividend; and
(c) the domestic company is not a subsidiary of any other company :
Provided that the same amount of dividend shall not be taken into account for reduction more than once;
CAclubindia
