WHAT IS THE TAXABILITY OF DIVIDEND RECEIVED BY PARENT COMPANY(INCORPORATED IN INDIA) FROM ITS SUBSIDIARY COMPANY(ALSO INCORPORATED IN INDIA) ?? THE SUBSIDIARY CO. HAS PAID DIVIDEND DISTRIBUTION TAX...
4 Replies
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 12 October 2011
Hi Ninad,
In this case, Subsidiary company has to pay DDT.
And if parent company declare the dividend then the amount of dividend declared by the parent company (i.e. holding more than 50 percent of capital) is likely to be reduced by the amount of dividend received from its subsidiary company for the purposes of computing DDT payable by the parent company if:
1. such dividend is received from its subsidiary.
2. the subsidiary has paid DDT on such dividend; and
3. the parent company is not a subsidiary of any other company
Ninad Pandit
(CA Final Student)
(254 Points)
Replied 12 October 2011
Hi Sanat,
so, will the dividend income recd by parent co from its subsidiary co be exempt from tax?
Ninad Pandit
(CA Final Student)
(254 Points)
Replied 12 October 2011
so, will the dividend income recd by parent co from its subsidiary co be exempt from tax? if subsidiary co has paid the DDT..
Sanat kumar
(Chartered Accountant)
(265 Points)
Replied 13 October 2011
Dividend will be exempt u/s 10(34)
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