INCOME OF DIVIDEND-:
If any Indian company which has 26% or more equity shares in foreign company and received dividend from such foreign company then such dividend is taxable in hands of Indian company at the rate 15% plus surcharge and cess if applicable. In respect of such dividend no expenditure shall be allowed to Indian company.
When any resident assessee received dividend from domestic company in aggregate more than Rs. 10 lac then recipient is required to pay tax as per Sec 115 BBDA at 10% on dividend in excess of 10 lac.
In respect of above dividend income i.e. dividend in excess of 10 lac, no expenditure is allowed against such dividend which is taxable under this section.
However company has also paid Dividend Distribution Tax on such dividend which is getting taxed under this section in hands of resident assessee.
Example-: If Mr. Singh received dividend from Reliance Communication Rs. 12,00,000/-in the year in such case dividend income of Rs. 10,00,000/- is exempt in hands of Mr. Singh u/s 10(34) and excess of Rs. 10,00,000/- i.e. Rs. 2,00,000/- shall be taxable at a rate 10%. Therefore tax payable by Mr. Singh on dividend of Rs.2,00,000 would be 20,600/-(10% of 2,00,000 plus Cess )
In above example Reliance Communication Will have to pay DDT on Rs. 12,00,000/- (After grossing up) however in hands of shareholder only Rs. 2,00,000/- shall be taxable u/s 115BBDA.
Provision of Presumptive Taxation scheme under Sections 44AD, Section 44ADA and Section 44AE
Provision of Payment Advance Tax
Income Tax Provisions of Cash Transaction Limit ( Income Tax Provision 269ST)
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