Can someone tell when TDS is done on dividends declared by an Indian Company. Is Dividend Distribution Tax connected with this in anyway?
3 Replies
CA Vikas Kumar Sharma
(CA)
(494 Points)
Replied 18 May 2013
Sec 115-O is applicable in the case of Dividend declared by the domestic Indian Company.
Dividend Income is exempted for the receiver.
CA Saurav Gupta
(CA Practice )
(32 Points)
Replied 18 May 2013
U/s 194, TDS @ 10% is required to be deducted on divident paid by indian companies.
But section 10(34) dividend paid by indian company is exempted in hands of receiver.
So there is no need to deduct tds on dividend paid to share holder.
TDS is only reqiured to be deducted only in case dividend falls under section 2(22)(e) i.e. deemed dividend.
CA Saurav Gupta
(CA Practice )
(32 Points)
Replied 18 May 2013
Sanjana,
Govt has exempted the dividend in the hands of shareholder by introducing the concept of CDT to collect tax from the company on distributed income instead of making efforts of collecting tax from a large number of shareholder.
Since, Indian companies are required to pay CDT, there s no require ment to deduct TDS.
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