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DDT rate as per section.115-O

sandesh devare (3 Points)

30 July 2019

what is normal rate of Dividend Distribution Tax as per section.115-O?

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CS M Pota (Company Secreatary) (3186 Points)
Replied 30 July 2019

I think DDA will not be applicable to dividend distribution Tax because it is not decuted from the dividend but it is paid by the dividen declaring Company so it is a Company's responsibility and liability.

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sandesh devare (3 Points)
Replied 30 July 2019

how much percentage company deducted from dividend as DDT ?

Suresh Thiyagarajan (Student) (3986 Points)
Replied 30 July 2019

1. According to sec 115-O dividend declared by the domestic company will be taxable @ 15%.
2. But DDT is paid on grossed-up amount which effectively comes to 17.647 % (15%/85%) which is nothing but the grossed-up amount on the above 15%.
3. Adding up surcharge @ 12% and education cess @ 4%, the effective final rate of dividend that needs to be applied to the amount distributed to the shareholder comes to 20.56%.
4. From the introduction of grossing up the concept on dividend this confusion exists. Otherwise its a straight forward computation just like other taxes.
Please correct me if the above solution has an alternative view.

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