What is Imputed dividend? How imputed dividend is calculated?
Deena.Vanan (Grad. CWA, ACA, CS(F)) (120 Points)
07 August 2011What is Imputed dividend? How imputed dividend is calculated?
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 07 August 2011
Double taxation of dividends occurs when both a company and a shareholder pay tax on the same income. The company pays taxes on profits and subsequently distributes a dividend out of their after-tax profits. Shareholders must then pay tax on the dividend received.
The tax imputations indicate to the government that the company issuing the dividend has already paid a portion of the tax due. The shareholder is able to reduce the tax paid on the dividend by the amount of the tax imputation credits.
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