Manikandan (Paid Assisstant) (54 Points)
18 November 2010An Indian Company paid Dividend to its Parent Company in USA.
We should deduct TDS based on DTAA with USA.
Should we aslo deduct Dividend Distribution Tax on the same.
If possible quote suitable example.
Kindly reply .....
CA. Anuj Gupta
(Practices in NRI Int.Tax FEMA TP FDI/FIPB & FCRA)
(7019 Points)
Replied 31 March 2011
Yes the Indian Co needs to deduct DDT on the sum being remmitted to the foreign Company.
For ex. the dividend being declared is Rs. 100 then the DDT of Rs. 16.2225(for financial year 2011-12) needs to be deducted from the same and balance Rs. 83.7775 can be remmitted to foreign company.
Foreign Company need not pay any tax on the same as the same is exempted u/s 10(34).
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