Dear Frns,
Please clairfy me in the following Doubt..
Since the Company is paying tax(Corporate tax) on the Profits and again paying DDT(Dividend distribution tax ) on the profits (these profits are already subjected to tax) while distributing to shareholders....
It seems to be that company paying tax twice on the same profits ... 1) in the form of Corporate tax 2) in the form of DDTafter paying the corporate tax on the profits..
Eg:
PBT ---------------------------------------100
Less: Tax @ 30:----------------------- 30
PAT -------------------------------------- 70 (This 70 is already subjected to tax)
DDT @ 20 (say 20%)--------------- 14 (Is it not paying the tax twice?)
profits available for Dividend-- ---------- 56
Kindly Clarify me the above one....
CAclubindia
