Bacha f guzdar query?

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Ca Club Member (Querist)
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20 January 2014 We have learned in Income tax that under the head Income From Other Sources Dividend income is exempt from tax, u/s 10(34) but in the example of Separate legal entity in Company Law (Companies Act 1956) we also learn that Bacha F Guzdar will be liable to pay tax on the dividend income.

My solution to this problem:
My tax teacher while teaching IFOS referred that Dividend income is taxable under IFOS but it is exempt.

Am I Correct?

Nikhil Kaushik

Nikhil Kaushik (Expert)
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21 January 2014 yes your teacher is correct...once the company has paid DDT, the said dividend income shall always be exempt in the hands of the receiver.

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